On Episode #4 of Real Estate Talk w/ Randy Stedwell we are bringing on Nick Bastianelli, we will be talking about the state of the market and his business on the Short term Rental space like Air BnB.
Nick Bastianelli is a real estate broker and investor. He is a 2 time ICON award recipient and founder of @TheBastianelliTeam at eXp Realty. He has personally sold over 50mm in real estate since entering the industry 4.5 years ago. He also has amassed a portfolio of 20 STR since he began investing in March 2022 with many more units under contract to purchase and a goal to have 100 units by 7/31 of this year.
@NickBastianelli and @TheBastianelliTeam on IG, FB, TIkTok and YouTube
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Hey everyone how's it going sorry we're running a little bit late here had a few
issues that I had to get resolved I'm just getting set up over here all right let's get this here volume down Okay so
welcome to episode four of real estate talk with Randy Stedwell and happy to bring you guys and announce this guy named Nick Bastianelli awesome guy I actually met him for the very first time a few weeks ago at his event and I asked him to come on
here to talk about I everything that we're about to talk about he's a agent
you know he he does short-term rentals he does some long-term rentals I
believe uh we're gonna get into all of that and what he thinks the state of the market is and where we should be going
so uh without further A do I want to bring up Nick Bastianelli how you doing
Nick what's up Randy doing great man how are you I'm doing awesome by the way
your event was awesome so thanks I appreciate it really really happy to be
there so but yeah so tell tell me Tell the
audience a little bit more about you and uh so I know we had a
little bit of a bio for you and we got that in the description if you want to read that by all means by just a little
just a little brief summary of who you are what you do and kind of go from there yeah so I'm Nick Bastille I'm a
local real estate broker here in southeast Michigan so I live in Northville grew up in Novi
I own my wife and I opened gyms uh when we're pretty young so as 23
she was 19 I think we made the LLC and she turned 20 reopened so anyway it's been an entrepreneurial my whole life uh
ran those jams was totally not planning on getting in real estate at all um I just had a mentor uh a mentor kind
of in life and in business um for a long time who owned a boutique Brokerage in downtown Rochester
um I had a lot of respect for him and um he had a you know a great I think he
still does I'm sure he still does yeah um a life that that I admired um and so yeah he owned that brokerage
and he asked me to come work for him and I was pretty hesitant this conversation was it went on for a long period of time
uh and then he offered to basically like cover the cost I think he covered the cost of my course for sure and maybe the
test as well and so I figured out let's go for it yeah so that was cool so I got into real estate and then
that snowballed we ended up selling our gyms or prepping our games for sale pretty quickly selling them I went full
time in real estate stacked as much cash as I could on the side and then started buying a bunch of
short-term rentals within the last like 10 months so yeah that's awesome that's
awesome so uh that actually kind of you know talks a little bit about how you
got into real estate as well so you know what were your fears about
getting into real estate so did you have any oh yeah I know I totally did I was super
apprehensive um the gyms were super fulfilling but they just we they weren't like super
financially rewarding for us I started really young we didn't know I think about it all the time I wonder
how I would do in this business nowadays the only one I know now but yeah I was pretty apprehensive to
get in real estate because I was like I really enjoyed the stuff we were doing
and you know although I'm very entrepreneurial um I have a lot of friends who have
really wonderful jobs and and so I thought man I'm gonna go from running
these games and being fully responsible for my income and benefits and health care to jumping into a brand new
industry real estate where it's 100 commission and I still got to do my health care and benefits so my kids were
really young I was super apprehensive dude I I really didn't I did not pay any
attention real estate for like the first at least five months that I had a license and then a good one yeah I did I
literally did nothing at all and then I had a good buddy of mine belonging one over again who asked me to help him buy
his first house uh so I'm very grateful that Nick trusted me to do that and that
was really it so that first option yeah that was super apprehensive dude yeah yeah so that's awesome because the thing
is is that there's a lot of newbies out there a lot of newbies in this group that we do and we reach out that you
know they're they're afraid to make that leap and I'm not sitting here saying quit your job and and go get into real
estate no I'm not saying that do everything methodically like I fully believe in you know
testing things to make sure that they work before you jump full-heartedly in it you know
that's me that's my methodical brain going
and so I always believe in that but dude I'm gonna tell you if if I had a
like I have a wife but if I had kids as well and little ones and they're there
so do that oh my God I mean I do dude
it's Gotta helping I mean we were like totally not we were not making any money so like I did have a very long flow
level of success I needed to achieve in order to be doing better than I was financially before I am the big thing
for us is because it was so we were it was very fulfilling it was so nice for our kids to be in a gym every day like
building their own you know like whatever obstacle course and stuff so yeah yeah it was it was a risk man I get
I'm in the same boat as you right like you know a lot of people call IM people every week about becoming a real estate
agent and I'm really transparent with them about you know what it takes to be successful in the industry and I
understand that people have families and they can't you know all just like go all in on day one so you know you gotta do
what you gotta do but it's been one I mean it literally is absolutely changed
our lives for the better so I definitely think it's worth a shot and and that's the great thing because
the thing is is that you gotta at least love what you're doing if you don't like what you're doing there's no point of
doing it okay yeah so great especially real estate right it's challenging we have to have tough
conversations there's a good amount of money involved it's not always comfortable there's a lot of acting
which must be taken on a very regular basis in order to be successful so yeah you gotta like it somewhat for sure exactly no 100 so with that being said
like what was your so you said your your first five months that you you basically
made nothing right and it wasn't totally yeah so it wasn't until you know you got
your first now after after you got your first paycheck from doing those first
deals like how did that feel incredible that was it man that was the that was the light not getting the
license I got licensed in June June something like June 18th of 2018 2018.
and then my first sale closed like I don't remember November 30th or something so it was actually like five
and a half months wow okay yeah so I don't know when we started seeing houses
that was probably a month or two but anyways yeah really transparently and I was
on a 50 50 split with a big cap you know for those people who are familiar with like the sale side
and I still showed up to close I think the house was 224 or something like that I showed up to close I was
only getting paid 50 of it and I still looked at that and thought holy
dude right this is why I mean I worked really hard for that very hard for that
first deal but even so I was making 400 a week transitioning to getting a
paycheck for a couple Grand and it's just like this is it we gotta do it we gotta go all in
yeah and that's weird you're only making 400 a week and you own the gyms yeah I owned two of them uh yeah
honestly probably my wife and I were each making 400 a week I think our best
year we made like 52 combined or something wow okay it was not a lot like people thought we were like owning props
again and you know my my whole life has been very important to me to be good and like
prioritize relationships over right I always prioritize relationships over cash or income and so we had staff who
fully operated our one location in Ferndale and they were awesome one on a salary and then another woman who's
awesome you know just per class like 10.99 right and then our other gym had full staff too so you know we weren't
like coaching all day but yeah I mean I think that would probably is going to be mind-blowing first if anybody knows me
that was my best year yeah so that was uh so your first deal I
mean that's more sort of a proof of concept than anything else it really didn't matter about the money it was
more even even though it was a lot of money for you because it was cool yeah but hey I was more about proof of I'm on
the right track right yes totally yeah it was wild man it was very cool so
when did you get into rentals and figure out the short term versus the long term
versus the Midterm and so on yeah so I we had racked up a pretty good
amount of personal debt from running like building out those games and stuff and so when I got into real estate I got
that first paycheck and thought okay there's a lot of potential here so my wife and I started talking about closing down those like prepping the gyms for
sale really like getting them off the books so that I can get into real estate full-time as quickly as possible but
that was a I mean I guess it's probably important for your audience in particular that took time right so I was running
two gyms with two infants I had to prep them slowly taper off
and then man I totally lost my train I thought there what was the thing you used to ask
me oh how did I get in rentals okay so what I knew is like okay I have this debt which I have to take care of and be
a responsible adult right this is like dragging me and my family down so what I did is I decided to go all in and focus
on one thing which was real estate sales and real estate sales only right I know this thing just paid me three thousand
dollars and that is the biggest paycheck I've ever seen other than whatever selling it probably yeah or something
and so I thought okay I'm only focusing on real estate sales and I'm pretty entrepreneurial so it's easy it
was really easy at that point in my life to have like shiny abject syndrome but all I did is think every day I'm only
focusing on real estate sales this is paying me and it doesn't cost me anything other than time and effort
which is all I really have been so I worked really hard and I started
off by paying myself like really low I can't remember what was I think I started by taking every paycheck 20 to
debt 20 to Investments 20 to taxes
and then maybe I probably started living off 40 expenses right okay and then
right so I'm saving oh and then 20 yeah like pre-saving for Investments essentially yeah yeah so whatever I
probably start at 40 I worked my way down to 20 and so our family you know I'm paying off 20 dad every time
pre-saving for taxes all these things are getting taken care of my life is not
changing that much in the way that I live and I'm starting to like accumulate some cash right that's going down right
going up and I start I knew from the beginning that real estate investment was wildly interesting to me so I I
thought that was the end game like I thought this is where you really want to go if you want to get wealthy long term
right I knew that I was in the rap race and like on the hamster wheel of commissions and I couldn't do it forever
so I read every single free ebook that Bigger Pockets had I bought a ton of
their books I listened to every freaking podcast they had all day and really
all I was doing is just stacking money and learning as much as I could for the day where I felt like I had
gotten rid of enough debt you know that I was personally comfortable participating in investment
real estate so how long did that take you from when
okay we'll we'll go with some you got your first deal because it was five
months after yeah yep so until you started like okay I'm
gonna buy this house for a short-term rental okay so the first investment thing I did
I did like live-in flips like I'd buy them and fix them up I did my first flip that I didn't live in
I think that we closed on that December of 2021 that was like a test run with my business partner who I do all my
investment stuff with Austin cook great guy okay I should have him on here he's awesome
and then we bought our first home in Traverse City I think we closed March 31st 2022 so
that was 10 months ago almost exactly I think okay yep
and so obviously it's gone fast because now we have 20. yeah so March 31st that person had 60
days occupancy so we had to wait we got occupancy whatever march to April April to May so maybe June 1st or something we
were up there like just doing stuff like building out the furniture we saw a second one like in the same subdivision
go up for sale we went there on our lunch break from building the furniture gave him a crappy offer we got really
lucky because it was an out-of-state investor from Florida who needed to 1031
she owned a single family house it was a newer construction single family and she's trying to get into a big
commercial deal so she needed her Cash Quick yeah so she just she didn't even counter
she just accepted our offer in 2021 during all the crazy bid Wars 25
Panda asked we were like what just happened dude so that was that surely
that was that that was in the Traverse City area you said right yeah at both we're in Traverse City
I was just learning all day honestly legitimately I was learning all the
stuff that people were doing on Tick Tock I was trying to watch people who were in short-term rental space and pieced together the software they used
because I know I'm I'm very active in real estate sales and I thought there's no way I can add
another job to my life I'm still thinking I need to focus on what pays me so I need as much software and systems
in place to make this easier so I just started like taking like oh I like this person's idea I like this person's idea
me and Austin are bouncing off each other all day and we just basically cobbled together the system of software
programs we could buy to basically like run it for us so that those were the first two yeah we're
we'reabouts in uh Traverse City was that at Andrew Christine actually asked that so yeah so we're like just uh Grand
Traverse Bay we're like two miles outside of downtown basically oh okay yeah awesome yes so we got lucky
they introduced some like serious restrictions I don't even know if they're allowing short-term rentals anymore we got basically what
happened is like two weeks before we were set to close on the second one yes Austin has a good friend who lives
in Traverse City who called him and was like basically Austin call your mortgage broker and have them
close as fast as possible that it's going before the city that they're
trying to like ban short-term rentals because there's getting to be too many so I called my mortgage program was like
we we I don't care what fees I have to pay I don't give a what happens we
need to close this immediately yeah we turned in the application the day
you there
I don't know if I lost him or not or if it's just me
okay looks like I might have lost him might have them back
just a minute let's see if he comes back
so you just text me uh hold on he's coming right he should
be coming right back in give me one second sorry yeah it looks like it's him
so all right hopefully he should be coming back yeah
he left the studio he should be coming back in now so this is a great time to
say anybody who is listening puts your questions in the chat just before he comes in
I will get them in here I you know Andrew by the way thank you for coming
contributing to the chat I it is a lottery system and he's grandfathered in
on that that's awesome and let's
hold on he's should be coming back and
uh
okay hey so sorry what happened yeah I'm here can you hear me yep yep okay I can hear
you now so yeah so that no that's perfectly fine
we've had it done before so so so where we left off was it was
just before you you're you said your mortgage broker and like hey let's get
all these I don't care what error fees you know we need to close yeah yeah it's it's yeah so I called him and
was like Hey the things will be done immediately we closed and long story short we got approved like I don't know what it was but it was somewhere around
a week before those restrictions took place so I don't know if you can even do
that in Traverse City proper anymore but we got grandfathered in and as long as we don't let our criminal license laps
were okay so yeah okay so you do have to so you do have to have a license in
order to do that yeah so what exactly consists of yeah so anybody who wants to do
short-term rentals they should be working with a real estate agent or broker who's like familiar with
short-term rentals because there are a lot of places who restrict or ban them all together
so you need to like you personally need to take the responsibility any City you're looking in you need to personally
call the city or Township and see if they allow them like some places like Nashville I
don't know what the deal is we're we were looking all over the U.S before we decided buying Traverse
I think Nashville has like really shutting them down hard so you had to go outside of Nashville there's a lot of
places with restrictions so I think it's different everywhere we just had to like turn in a bunch of information basically
pay a fee gotcha and all sorts of it yeah it was it was simple but we had to do it
the government's got to get their cut yeah for sure I I think what it what it
is is the uh the lobbyists from the hotels are are pushing hard so against
that I agree with you yeah totally we're totally cutting another market share for sure so yeah so
I believe it was yes Andrew again he said East Bay township has been nuts uh
people who bought for short-term rentals are ending up ending up stuck with a
300K plus property properties they can only rent for 1600 a month for long term
it's crazy oh I believe it yeah we're technically in East Bay township to be honest oh really I'm just so grateful
that didn't happen to us yeah so on that can you can you run across
how do you run your numbers for short-term rental versus uh long term and how do you figure out
the the price uh the the offer price yeah so uh there are so many caveats to
this I guess the first really important thing for people is I like to have multiple exit strategies on every deal
right okay so uh even if I know I'm a Rockstar terminal I want to have like
additional options so I guess that's the first note that's a personal thing but I think it's a good thing for everybody to
do I knew that even with this first Traverse City house if I couldn't short-term rent it then I would still
like to go there with my family so that made me feel really good but to get back to like basic to
answering your specific question yep I do is I'll pull up a property and then what I'm going to do is I will
whatever figure you know if it's listed on the market or if it's off Mark you know if it's off Market I'm gonna figure out the purchase price
and then I'm gonna go into air DNA or BMV account I use air DNA
and because I'm a real estate I'm a real estate broker I have access to that for free through that okay so here it's
usually a paid service for most people you might be able to find a Bigger Pockets link where you get it cheap but I'm going to take the perks price I'm
going to take the link to the house I'm going to go to air DNA I'm going to type that exact address into air DNA on my
bedroom some bathrooms in and it's going to spit out basically like comps okay so it's going to say hey this house is
projected to make 59 000 a year based on these houses around it so I like that
it's actual data being scraped off of airbn Airbnb I feel good about that right so it's not just like an hour I
mean it's an algorithm projecting but it's using actual numbers and then basically what I'm gonna do
is I'll divide that you know across 12 months right so I
know I'm not going to have even occupancy where I live I'm we're in Michigan it's going to be very cyclical prop probably about 68 occupancy but I'm
trying to get just an idea on a monthly basis so they just say it's 60k so we
can have an easy math problem I know that's an average of five grand gross per month I'll go into Zillow I'll do
the scroll down to the mortgage calculator for me we put 25 down on those things
you could talk to your mortgage broker whoever that is I think you all should call Brick Financial because they're amazing but
you might be able to get your first one on a second home loan which is ten percent whatever it is whatever your down
payment is I'm plugging into that mortgage calculator and getting an estimate from Zillow so let's just make it easy and call it 2500. cool
yep the other important thing that everybody should know here is I am estimating future taxes as well because
it's non-homesteaded so I guess look up Michigan property tax estimator I put in
the city I put in the school district the SUV is going to be half of the
purchase price 12 300K the SUV whatever 20 or they says values 150.
and that'll give me updated taxes so just make sure you have updated taxes in that mortgage calculator for Zillow all
right yeah and that's actually even whether you purchase a new house or short-term rental you need to do that
and I think that's where a lot of people make the mistakes with running their numbers is they don't take an account
the updated taxes tax you know so it
because you could I think a lot of Acres yeah no yeah the pre the thing is is the previous owner could have owned it for
50 years and they're paying a thousand dollars in tax and and when you buy it it's going to go up it's gonna be
uncapped and it's going to go up to six grand attack in taxes who knows you know totally so yeah
I don't want to interrupt you go ahead yep no that's okay that's all right so say my average which I know I'm
not going to get every month but average capacity or five grand gross all right and I know with with updated taxes and I
know with like landlord insurance right not regular Insurance landlord Insurance you say I'm 2500 bucks online per month
that's principal interest taxes Insurance all that stuff right um now the next thing I'm going to do
it depends how hard you want a stress test to do I try to break every deal honestly uh pretty aggressively
primarily purchase it but then the next thing I'll do is I'll add you know whatever 10
of you can add 10 of your gross or your repayment whichever you want so say 500
bucks I'll think of as capex right so Capital expenses I'm pre-planning for a broken furnace in AC now I'm at three
grand yep right uh I don't have to account for vacancy like I would on a long-term rental because that's already
built in to the gross number but yeah what else am I missing here oh
then I need to put in software right I use a ton of software on our stuff so I don't have to do it personally I don't remember what that is we'll get
caught 300 bucks a month so now I'm at 3 300 bucks a month same at five grand gross minus that 3300
I now average 1700 right I'm sure I missed something in there yep but yeah that's I mean generally
speaking how do we go about it okay awesome and so what do you how do
you come across so when you come across a property do you say okay my multiple
strategies are the short-term rental do I do I do you account for the long term as well or just for a midterm rental
yeah totally so what I would like on a single family home I would look at
traditionally I would look at short long term and now I have a friend who's like the midterm midterm rail master so
that's like a new thing for me to be learning the last few months it's pretty intuitive previously I would just do
short and long term on single family because those are things that makes most sense for me and I'd just run those two models
essentially and then at the end of the day I also wanna to own a thing in a place that I like because that not
everybody has to do that right I just
you know
so yes which is what I thought I would do it's difficult to for me to want to
go these places because like now I'm not making Revenue in those times but yeah I mean personally I mean I have a lot of
friends who are like dude I don't give a where I buy investment properties as long as long as they produce enough cash and I'm to some degree in that camp
but like you know especially on single family stuff like I kind of want like it you know yeah so yeah I would go short
term run it that way long term what's my worst case scenario and then I'd look at like hey if I gotta flip it or not
really flip it but say I have to sell it you know what's the worst case scenario if I can accept the worst case scenario
then I'm down gotcha okay yep that's awesome
so and then you with the purchase price you just make sure that you can
you what what kind of return are you looking for for say the worst case
scenario or a long term or a short term or are you looking for a couple hundred bucks uh for the worst case scenario are
you looking uh to best case scenario a couple Grand I mean what sure what is
the profit yeah so yeah that's a great question for long-term rentals I don't own any
long-term rentals personally my my business partner Austin has a whole portfolio of those before we started doing short-term together I'm sure I'll
own long-term rentals like apartments are appealing so if I was looking at long term I'd want 100 bucks per door minimum
short term I don't really have a number in mind to be honest uh they make a lot of money so I haven't really had
to I haven't really had to ask established a loan number because I'm pretty
satisfied with the ones we purchased I think I'd want to at least make a grand per month on that those like minimum
there is you know especially if you're not utilizing all the software systems we're using like that could end up being
a lot of work and so I would want to I would want to be rewarded well right like you gotta turn over the property
every time somebody goes and if you're not paying a professional cleaning company and do it like that's hours of
work so I don't really have a number but I guess I definitely would I would want a
grand at least per door there gotcha okay so uh Gary Corbin actually asked
lots of good info what is midterm rentals and I guess we didn't really cover that
too much so everybody knows what short-term rentals is everybody knows what long-term rentals are what is short
midterm rentals yeah so I should have thought people are asking this all the
time right for clients and stuff in real estate sales I think if short-term rentals is everything under 30 days I
don't let anybody go past 29th days on my short-term rentals because I'm kind of paranoid and I don't want them to
have tenant rights because I don't want to go through the process of evicting them so I think short-term rental is 30 days and under right for me it's 29 days
and under so I have a day a buffer I think if midterm is anything between 30 days so one month and 12 months less
than that I think of as a midterm rental and then I think of long-term rentals as 12 plus months right midterm rentals are
not typically close to 12 months right there are a lot of times yeah two three four six months this is typically travel
nurses travel medical people in general this could be uh whatever Insurance like
a lot of like fire damage water damaged houses insurance will pay for somebody stay there
other midterm rentals are professional athletes um all sorts of stuff like that so yeah
okay that helps awesome yeah so that that really helps a lot of people out there and corporate
rentals you know but keep in mind it very follows the rules with short-term
rentals where it's still fully furnished so that's why you totally ask for the higher number you know for a normal
long-term rental that's looking for sixteen hundred bucks a midterm rental you're probably looking at you know 26
to 3 600 bucks you know a month yeah am I off a little bit I mean is it
close no no I I no I think that's totally accurate yep and then like short-term rentals for me like in a
worst case they're usually like I mean a worst case scenario they're double long-term rent like they're
usually like four times somewhere in the two to four acts of like long term right so gotcha yes it's a very vague General
number it all depends on the area right you know it does totally yeah it's hit
and miss you know you go downtown Detroit and you might have some there but you know you go on the outskirts I
unless you're close to Royal Oak who knows how many there and I haven't really looked at the market for
short-term rentals here in our local area so I don't know dude there's so many it's wild yeah
and it's because of good hospitals like people okay hospitals right so the
typical it's wild people typically think of short-term rentals as only vacation stuff
which is probably the bulk of it right like it's nice to have one in a vacation area but also like for short
midterm rentals getting close to like uh good hospitals is like a big deal so
yeah like Royal Oakwood or Corridor uh gorilla Ferndale that area there are a
lot of short-term rentals dude so many yeah
yeah they do yeah oh nice cool yeah I grew up off Spencer Street in Ferndale
no kidding dude we owned a gym at uh that's where our second Gym was oh nice
what was the name of it it was rise Athletics well we had Rice Athletics in
Farmington Hills and then rise Athletics Ferndale was that location gotcha yeah awesome
yeah I grew up over there off of Hilton so very cool yeah and
yeah I seen it when it was not so the
way it is now to where it came to so yeah it's come a long way
it has for sure but I yeah so kind of
understand that and I think that's where the the housing prices over there just kind of like skyrocketed not only
because of that but I mean obviously because the value too but it's really crazy so one thing I
want to bring up here as well is I think you do something great that not a lot of
other people with short-term rentals do and I think you actually
everybody wants to do it themselves okay like I'm gonna try and do it myself I'm gonna you know do this do this or I'm
gonna hire somebody I'm gonna hire a property manager to do this I'm gonna hired one thing that I've noticed with when I
came to your event is that you actually set up automation systems
okay and setting up automation systems where you're basically hands off
the whole thing just all you do is buy the property you stay you get it ready and then you put it into your automation
system uh where it goes to the three sites and uh and then if one of them
books it the other ones can't it goes into a central calendar and if I've seen any of this wrong
please let me know no you are you're doing good yeah you know yeah you want me to explain it
briefly I can yeah please do I think okay where everybody's gonna get the value here it's this automation
system that that you're doing sure okay so basically what we do is all
right so people ask me all this is an important note there's going to be people watching this today and everybody
asking this every time I talk about short term when I was like what if there's a change in Airbnb or like what if the short-term rental market gets
oversaturated what if the short-term rental market evaporates all right so it's a wonderful question and one I
thought a lot about before I got involved but I operate our short-term rentals like a business I am not
operating at like a mountain pack like you know it's just like a business for me this thing makes me money and it's
important and so I dedicate time to like systematizing it and making it a professional repeatable preferable
experience just like I do in real estate sales so we prep our homes with nice furniture
step one we get professional photos step two please don't skip 300 photos because
you're gonna like when I think of trying to not I'm okay so I'm thinking I'm
Gonna Save 300 on Pro photos that's literally one night like one extra night so get the emperor
photos then we build out with every single home or every unit gets Airbnb Expedia
booking uh Airbnb VRBO Expedia and booking.com okay so every unit is on
four places all right and none of I don't have to pay to be a part of any of them I mean they're gonna take some of
my the money that I make but I don't have to pay them money per month all right which is cool I think all of those
are gonna blend into a multi-calendor okay so just like you said I can't get double booked so many books me on VRBO
it's no longer available in the other places right uh then we prep all of our homes
we use Smart locks so we put a smart deadbolt on and then we go a step further because
Austin and I live you know off me and my wife were four hours and 10 minutes
Austin's 10 minutes for me so he's four hours 15 minutes or whatever so we had smart dad bolts and then we
put what's called a passage door handle on the actual door handle on the front doors
we do that because there's no wait there's no lock they can't lock
themselves out yeah right so we Smart Lock passage door handle then we go a
third step further and we put a lock box like old school lock box on there too all right so the multi-calendar we have
built out so that the multi-calendar generates a code
for this specific gas sends it to them I don't remember what it is three hours beforehand
and that code only begins to work on that Smart Lock 15 minutes before their
check-in their check-in is at 4 pm and it dies 15 minutes after they're
checked out which is 10 am right so we don't have to manually create codes every day we don't have to
do that it's automatically done because we built it in the system yeah right and if there's any issue they
can call us and I don't have to worry about sending somebody over there I can say here's the lockbox code or here's
the master code for the deadbolt right I don't tell them it's the master code I say oh let me generate a backup code for
you yep no backup code what else I have built out automated
messaging I think there's nine messages in emails something like that from a second somebody books throughout their
entire life cycle with us until after they leave so every question they could ever have is already answered there's a
link to our house rules check in check out I'm so sorry we're not flexible on checking our checkouts
because we have a professional cleaning service you know so the house is actually clean and so all the automated
messages go on their own we don't have to do that we have Smart Pricing software
integrated with the multi-canitor so people are always like do you have to update the prices every day no I've
never updated I don't do that at all Smart Pricing does it for me and it does it based off of other houses nearby
and so the next question is well don't you have to jack it up for the Cherry Festival when it's crazy I will explain
to say it's already built in because everybody else is going to get picked up booked up faster too so like is it
automatically going to be increased I don't have to do anything God what else we have a clean great
cleaning lady she's the best and uh she has our calendar so she doesn't have to
ask us when to clean she has her own cleaning code so I can see on the log when she goes in and out of the house
okay she just Auto I mean there's no I mean she's just hired she goes when
somebody checks out without telling us and then she just builds our account and that's it
I think I covered it all there man but so how many different how many different
pieces of software are you using for this automation okay multi-counter Smart Lock
Smart Pricing software the automated messages are part of the multi calendar so that's not separate so I guess if you
include the cleaner for things but the cleaners it's really just three pieces of software I think maybe four
not a ton pretty easy yeah that's awesome and then uh it is
awesome and pretty much all we have to do is like if somebody steps outside of the
normal like the met the stuff that our messages and emails right so something weird happens like say the battery died
on the deadbolt is a perfect example of something which may occur than that personal cost but it's really
just a couple phone calls and texts a week actually honestly that's awesome so
Andrew said what software do you use to manage your channels we kind of just answered that
so now you're sending these off to Airbnb VRBO and what other ones
media and booking.com but honestly yeah so those are the four but honestly
like that I'm not like a huge fan of those two I would like Airbnb would be my
highest priority right they get a lot of like plaque online but still I think they I don't know I haven't looked
um plus percent of our traffic is from there that's the highest priority for sure then VRBO and then
expediambooking.com or just like why not have them for us okay so what's the software that you use
to actually push out your listing to um all those all those four
host away just look up multi-calenders and figure out the one that you like the best yeah but most away is the multi
calendar that I use awesome and so you so when there are maintenance
issues and things like that your does your cleaning lady tell you or like for instance a battery dies on
the deadbolt like how does that all like do you call a maintenance guy
what is the procedure for that yeah so this is the usually the next big
question is like what happens when the house needs repaired like how do you know it needs repaired and the easy answer is a guest either a guest is
going to tell me or the cleaner is going to tell me because there's somebody there all the time and so uh this totally happens this has
happened countless times I don't even know how many times since the first one went up and I think the first one went live uh end of June the second one went
live July 4th something like that I don't even know how many times six times I'd just guess close right many we just
I mean I do the exact same thing a normal property manager would do is I just call a local person who is licensed
in whatever it is so I have a favorite company that does Plumbing Heating
Cooling and all handyman services they're properly licensed in Traverse City I literally have a tab with them
like I have an open line of credit and I just call them and book it for a day
that nobody's there and that's that I mean so same thing any problem manager do awesome so as far as the cleaning
when do they come in and is it like a normal hotel where you check out 11 and then the cleaning lady comes in and then
you can check in at three for the next person things like that that's a yeah so
that's exactly what happened so we this is another great question that pops up a lot I think a lot of people this is a
great this is an important area where a lot of people have a really hard time establishing and maintaining boundaries
with their people we're really clear in all of our emails and messages that like hey this is our checkout time our checkout
time is 10 A.M they get that that's the first message they receive along with the house rules our check-in time is 4
P.M it's said multiple times in the messaging before they ever get there so we don't have a huge issue with people
on this but every once in a while somebody will ask you know can I check in early or can I check out late at
which point in time I say hey look like I would love to do that I'm so sorry but we regularly have people you checking
out in the morning and somebody checking in at night we only have that six hour window from ten to four and we pay a
professional cleaning company who literally like actually sanitizes and cleans the whole house
I can't eat into it I am so sorry if it's an issue you know like we're probably not the place for you but we
just want to make sure we have a repeatable incredibly clean home for you so we can't let you stay late but I
promise it's going to be really clean when you get there yeah that's awesome and that's our massive thing around it you know it's
ten and four we're like we don't deviate at all yep that's awesome so
the thing I actually liked about so the book The booking.com and
Expedia the thing I like that you go to those is because you get those people
that don't normally go through have never done Airbnb or VRBO you know yeah
um and for me I've actually never done an Airbnb um I rented oh cool I I've actually
rented a place in Milan when I was there for vacation okay and okay I I did it through booking.com
and then I've come to find out it's actually an Airbnb like it's but I do oh
my gosh you know I I yeah it was a whole
apartment you know I had to check in like it was a one bedroom little little flat or whatever but yeah it was crazy
yeah dude that's nuts yeah so I I think that's awesome right we have that we
have those for that exact reason the traffic is less but it's not a reason to not have time right it's great exactly
that's cool yeah so with that you know what is you know going
forward what is your plan for the future I mean how many do you have right now and what are you trying to get to and
are you trying to break into different markets yeah totally okay so when I originally
started I was looking all over the US for places that worked for this and I
just love uh I love Northern Michigan and I know this area really well right
so there's probably cooler spots but the numbers are great for me and I know all
up north like I've been going up there my whole life so expanding another markets dude I'm
told really open to it I have I have buddies who buy all over the place
who make my portfolio they have thousands of doors right
but yeah so I have two short-term rentals that I own 50 50 with Austin and
then we syndicated a whole hotel so it's a 15 in a hotel three single families on site so that's 18 units so that's how I
got to 20. my goal is to have 100 units by my birthday which is July 31st
obviously this year so I have whatever seven or I have six months to get 80
more which sounds like a lot but I have seven under contracts set to close by the end of February and I should have
a 26 unit under contract I hope right in the morning I don't know we'll see I
mean commercial negotiations are long we're verbally agreed a 26 unit that I
can at least make 28 Maybe 29. so yeah that's where we're at right now and
that's where we're trying to go I did not plan yeah whoever just said they'll find
me some deals hit me up I did not plan to be a short-term rental guy I really want a shitload of apartments for
anybody who's willing to look for deals with me I will bring you in bring me all the apartments you can find I will also
look at like ends and non-branded Hotel I don't want anything to do with
like you know uh Big Brand hotels that's not not my job yeah so that that's
awesome so the guy who said that they'll find you some deals his name is Andrew casting he lives up in the Traverse City area
maybe a little bit nice but he's an awesome guy I work with him I I've worked with him a couple times but
he comes down here every so often so great guy to work with yeah hit me up getting deals so
and then I Larry Shepard asks what's your cash flow after expenses with what
you have now oh man okay so current I'll give you
current I'm not and then I'll tell you what proforma is yeah yeah okay so this is where this is where we could get all
like I can make it sound mind-blowing and be so sick for tick tock right but I'm gonna tell you the
real deal okay so real deal let's talk about the the two single
families those will probably gross 90 comfortably each okay so we'll just
call it 90 each 1980 probably 90k each
all right okay and uh we'll we'll just call it a 50 expense ratio
but then you know we got to reduce by debt so worst case out personally owning
50 just my part pull a grand net per month but what I really do I don't even
track that because I use that money I don't like pay myself because I use that
to buy other deals right gotcha yep so what you just assume 50 operate fifty
percent you know operating expenses there uh
the hotel I found out because it's syndicated I
can't share exact numbers but anyways it's okay the grossest it grosses
a lot previously it grossed about a half mil
we can operate off 50 they were not operating at 50 expense ratios lower so you know low 200s and that is we'll
increase it a lot so we'll grow it to you actually maybe I
can because it's a case study I don't know how far this coaches is recorded but we'll increase our gross income to a
lot really high 800s yeah off that property and again 50 expense ratio so I own
six personally my LLC because we syndicated it and had to do a lot of
stuff to make that deal work for all of us I personally had 16 of that one property
right got you also known's another 16 we have two more GP partners and then we
have a coach LPS right private investors who invested with us and so in that
syndication how much did you raise for that did you put any of your own money
I did yes yep so there's 50k now refundable EMD
there so me and Austin covered that we covered all due diligence we were probably all in 90 95 or something like
that I would say probably 95 should be safe uh we raised 1.34 mil okay uh which
includes all of our renovation and design budget so all new furniture all of that stuff
so I think that answers all of your questions yeah so and then one thing I
want to ask was how did you come across doing this indication real quick
like sure I mean everybody like oh yeah syndication but there's
I mean lawyer fees there's thousands of dollars I mean I I've heard somebody's son you
know spend almost 100 Grand on just the lawyer paperwork you know
yeah that would be extreme that person would and that I have no idea how you get there our attorney fee specifically
on that one deal okay so the important thing to know is right you have more than one outside person particip one
person two entities is a JV beyond that you're in a different area we have 13
LPS so now we aren't being overseen by the FCC which means we because we're we
want to be legit we want to do this legally and do it really great protect our people the best of our ability so we
don't cut Corners we hire an SEC attorney our SEC attorney prepared all
of the documents the SEC filing the operating agreement subscriber agreement the PPM all that stuff I think our
attorney fee on that it was like 12 600 or something which I
find okay pretty normal that was talked to a bunches the attorneys and the norm
the norm is like 12 5 to 15 per deal so you have to take that into account and
you're to go back to your question of where did I learn this me and Austin were on our way driving
from Traverse City back down seven Metro Detroit you know Norco and Plymouth we are listening to real estate podcasts
as we do we heard a guy named Tim Bratz I don't even remember whose podcast he was on Tim Bratz is on there and we were
like holy this guy is cool like he went from zero to whatever he got over 4
000 units and I don't whatever five years or something and he had this course going on called commercial empire
which was like a grand in like a week or two so we're like dude we'll you know
absolutely I'm a huge uh believer in investing in your brain and you know
right bats an excellent use of funds so we signed up and that's where we
learned syndication and so we leaned on them very heavily uh a great you know
we're part of that Mastermind still Tim is awesome his whole crew you know very well at this point in time you know we
had his guy who does all acquisitions underwrote that deal for us before we ever wanted her contract we got his
Blessing he said absolutely this is a great deal I've double checked it looks good go get it then we have their
on-site legal counsel look it over you know and so they hooked us up with like
you know tons of referrals their staff looked at it and then they gave us outside referrals to help us process it
through so you know well that yeah yeah so that that Mastermind right I
think that we're like grandfather or something I think we paid 12.50 a month to be part of that but that I mean think
about it this one deal
for my whole life for my whole life and so when people say stuff to me like
it's crazy that you spend 12.50 a month on one Mastermind I'm just like is it though like is it actually crazy because
I wasn't doing anything this before and now I get to talk to people all the time
who literally actually have many thousands of units and so I just got in
the right rooms right like you know going around here being part of a 20-year portfolio sounds
really great or maybe it doesn't I don't know but it sounds like a decent amount and then I go there and I'm just like
this is I am I need so many more you know what I mean yeah it's just so it to
me it does sound crazy it to me it does sound crazy if you're not going to take action if
you're going to take action totally then it's 100 a no-brainer you know it's
so doable yeah yeah I mean that's the thing right you just gotta get around people who are doing
what you think is crazy on a regular basis you know like this is so annoying
normal for them like 26 or 28 unit deals like small for them like really small like a lot of them are just buying
hundreds of units at a time and giant portfolios new construction stuff that cost tens or 100 million plus and so
there's us we're like oh yeah this one's two five and they're like cool do you need any help you know most definitely
and I love that so I love that and and that's where you start meet people you build those relationships and you know
what on the next deal they need some money coming in hey can I get a portion of that and ride their coattails you
know uh yeah and you learn from that deal so that you can be the head of the next one and so you know so are you guys
managing this this project or somebody yeah okay no yeah yeah so here's how yeah so
we set it up me and Austin are basically set up as like the the asset managers essentially so we're both very familiar
and very comfortable with like construction and renovation so my idea has been in the construction industry
like my whole life in some capacity he builds a ton I did some construction for
a couple years like during college I just love that stuff Austin you know they own a
Building Company his dad's been a builder and developer for whatever ever forever 35 four years probably has
developed we should ask them 4 000 Lots I think it's probably safe and insane
right so what happens is that's me and Austin's job is I got the deal under contract negotiated the whole way
through processed all the paperwork right got us to the Finish Line me and
Austin put together the SEC filing and the offering together we presented it we raised funds we brought in a good friend
named Rafa Loza who's the bomb he runs the same model we do in short-term rentals so we brought him in gave him in
some Equity so that he is the property manager right once we closed all me and
Austin had to do I shouldn't say oh because it's still a lot we oversee all of the renovation
that's all us all right so we need to make sure that is all smooth we stay within budget get it done on time
and then we become then we sit back into the app that manager position where we are overseeing the bookkeeper the CPA
and Rafa who's doing property management and we make sure that quarterly distributions are given out to our LP
investors on a timely basis right so gotcha that's how it's set up for that deal
but we can do whatever you want and like I mean yeah however you want that that's awesome all right so you
know the property manager is he going to be a us on-site every day property manager
no so he lives in California yep so we met Rafa in that same group I told you
about Tim bratz's Group which is called Legacy wealth if anybody wants to get involved with it hit me up I'll give you
a cool little referral code there but we met Rafa at one of those
events I think it was in Dallas and he was
crushing in that short term for me and your system is really similar to ours except your 80 gazillion units
he's running our Arbitrage model I don't remember how
many units he had back then but it was probably 50 plus and then
he had a whole staff of va so we were very impressed with how he operated and
so when we got the band under contract I me and Austin called a bunch of the
people in Legacy Family that that Mastermind and we're like hey do you know Rafa people knew Rafa well we
should do a deal with Rapha like would you trust raffle with your money would you try scrap of managing your property yep and they all unanimously said yes so
that's how he's going to be involved in the deal he is remote but we do because it's 18 units there's gonna be a lot of
cleaning it's gonna be slammed spring summer and early fall we do have a lady on site who cleans and kind of like sees
the property full-time okay that's awesome so awesome so
real quick how can the community here help you with your future endeavors and
then how can we they get a hold of you in order to help you out Okay cool so the uh you can find me on
all social media tick tock tick tock Instagram Facebook YouTube at Nick
bastinelli or at the best finale team so that's how you can find me my
phone number is everywhere on the internet and then how you
can help me I would like to see as many deals as possible I'm happy to bring
people in if you however you want if you bring the deal I'll make sure there's a way that you are compensated but I am
looking you know primarily for apartment complexes I will also look at Self
Storage triple net and ends you know the bigger the better I ever know yeah no
cap on bugs yet Michigan would be cool but you can send me stuff wherever we underwrite
really quickly so send me anything you think is a deal that's for sure send them all got you Nick at basketball team
is the email yeah Nick at best finale teams uh Team yep
yep I'll put it in this little chat box here yeah there we go and then at our rice Denali
at the fast finale team there you go you got it all
it's in private chat but I'm I'm copying it over to the regular chat here so cool
but yeah so we can do let's see here uh continuing to do
that but so what primarily so you're do you do you own homes in the local Metro Detroit
area yeah so I nope it's my primary just your primary
yeah okay yeah so I'm like very not opposed to owning stuff that I don't I actually for me uh this is the thing I
was like really thinking about and concerned about in like early before I actually got involved in real estate
Investments like when I first got involved in real estate and sales I'm reading all these books and all these podcasts and I think man I got to be
close to the things I own and now I actually don't I actually don't want to
be close at all because I think people fall into the Trap of that doing stuff on their own
which allows you to not operate it like a system like a business or you know put
processes in place so I know that I'm forced to treat it well and treat it
like a business and set up all the stuff that I should to make it run to the best of its ability if I can't drive to it
you know in seven minutes and I love that and that's one thing that I think is
really interesting about your system is that you're doing the automation
I think the Automation and you treat it like a business and the way it is that's going to help you expand the fact
that you did that early on is 100 help help you grow for the
future uh long term so yeah my my day job I work in the
automotive industry and we do testing some automation so I I 100 I understand
that so yeah yeah so even like uh so I would love you know I we have short-term
rentals we're getting to be known for that sort of thing which is cool but even like on apartments I would do the
exact same thing like I'm totally not nervous to be really far away from those I would prefer it I would still have multiple layers so you know right now
we would have a property manager for like apart for those people who are doing apartments or even single family I
would have a property manager and then for us in the apartment world we would have an asset manager which for now is
me and Austin but eventually as we scale up we'll hire an asset manager who will come in and so there will be multiple
layers of oversight on all these properties always because we just want to make sure they're really well taken care of
that's awesome so Larry Shepard asked uh what's your
underwriting process for properties out of state determine what you want to invest there and when do you when when
you get a deal sent to you oh sorry okay cool investor when you get
a deal sent to yeah yeah so
it depends on the asset but let's just say like you know Apartments because they're easy uh basically what I would
do is I'd be trying to get on the phone with somebody who operates in that market no you're not on the phone maybe it's Facebook it's probably actually
going to be Facebook in my commercial group and I'll figure out what those PR like properties in that area
of that asset class let's just use Apartments I'm just going to make somebody make some place up like say let's say apartments in Lake Georgia I
try and get in contact with somebody who's like a very active apartment investor in Georgia or if I don't know anybody then I could
call Commercial uh commercial real estate brokers in Georgia in that area
and all I'm trying to do is I'm figuring out the cap rate that
those are trading at right for like a nice renovated updated place I'm always looking for light value add and like C
plus and above areas okay so I don't want like war zone stuff or total gut like I gotta start from like framed you
know apartment or something but I'm just figuring out a cap rate and then I'm just running it through a calculator essentially I mean commercial properties
are pretty easy to do like napkin numbers on
so yeah just utilize that cap rate to figure out what my offer is at that
point in time you know if I know the value out I'll Reduce by that but there's a gazillion calculators out
there like we have you know a Legacy Family calculator from Nick Burton I mean just look up like underwriting
calculator for apartments and you'll find a bunch online who's that other guy invest with Ace I think has a good calculator David two
pin I don't know if I'm saying his name right he has a calculator so we utilize
those but I think you should also be able to you know honestly you need to be able to evaluate the numbers yourself
yep so when I look at a property first all I'm asking right off the bat is like
hey what needs to be done this property you know like have the kitchens and bathrooms been updated so I can get a
ballpark renovation number per room and then I asked for a net operating income
and that's literally all I need right so do you want me to actually I mean I can do one if you guys want a simple one
yeah that'd be great 90 seconds Okay cool so let me see if I can map this out
real quick so let's just say somebody tells I'm just
gonna make it up so it's really easy for us right let's just say I don't even care about the units let's just say
somebody tells me their net operating income on an apartment complex this
exactly the same for short-term rounds or short term or like a 10 has a 100K
net operating income all right now I know that let's use Apartments
okay say they're trading at six and a half cap I'm dividing by .065 that's six and
a half percent now I know my Max allowable offer 1.538 say I know there's 100K in
renovation whatever now I'm at 1.438 is my offer on that thing right one two
four three eight million yes yes okay yeah so you just keep going you
know like just get really like go online and watch YouTubes on like how to use
not operating income to figure out an offer it's pretty easy so it was like
it's confusing when you start or I mean it was for me but then you just yeah it's just like anything right it's like
evaluating a flip or like a long-term rental or a single family like wholesale deal the more you do it the better it is
so I just make you know a goal for myself of maybe evaluating like two properties per day until I get really
comfortable and can just do it right off the bat gotcha okay so yeah Andrew Andrew uh
casting says super easy value equals noi divide by cap rate
exactly yeah totally yeah so 100 uh or value times cap rate equals
projected noi so you know yeah just look up I mean look up that
whatever look up the math problems online those are yeah it's it's pretty simple I love commercial because it's
literally just a math problem like you know single family we're having to pull comps same city same school
district usually within a mile same style of home but commercial is literally just a math problem like if I
increase that operating income by x amount then the value of the property goes up back and I really like that
gotcha okay awesome so so we already got people how I can
get a hold of you and yep you know if they want to get anything is there any
last words that you want to reach out to anybody to you know if they
come across anything they can get a hold of you and or anything like that yeah yeah so you guys contact me
248-826-1533 that goes like right through my CRM so I'll be able to like save your number in there and not lose
it which is great emails you know where to find me on social media I mean legitimately send me any
commercial deal that you actually think is please don't sell me stuff that's like you already know not going to work out but if it's a cool
deal send it along we will check it out we'll find a way to get you involved if you send it to us
awesome so great awesome I'm glad to have you I really appreciate you
spending the time with me and coming on here and adding value to everybody here hopefully you can at least get one deal
out of it so I would love it that would be great thanks again for everything yeah
not a problem at all so and again anybody out there who is watching this whether you're on YouTube
or on my Facebook Channel please uh connect with Nick get a hold of them
send him deals and go from there that way we can all do deals together so all
right let's do it up thanks Randy I appreciate it time no problem thank you for your time I
really appreciate it everyone have a great day and thank you for showing up for another episode of real estate talk
with randy stedwell this is episode four in the books have a good day
bye everybody thanks.