520: $47k/Month in Rent, 0 Doors Owned | Rookie Takeover w/ Rafael Loza

Episode • Oct 19, 2021 • 52m

The hosts look and sound a little different today. There are no beards and we haven’t heard one metaphor containing jiu-jitsu lingo... That’s because Ashley Kehr and Tony Robinson, hosts of the Real Estate Rookie Podcast have taken over the BiggerPockets Real Estate Podcast! Ashley and Tony regularly talk about how rookies can get their first (or next) deal, but today they’re combining expertise to talk about something more controversial: rental arbitrage.

Rental arbitrage is a form of subletting that allows long-term tenants to make massive cash flow off of short-term rentals. Someone who’s done this to an extreme is Rafael Loza. Rafael was working the night shift as his W2 job when he found out about short-term rental arbitrage. He sat on the idea for a few months, but ultimately tried out the concept on an apartment. This one apartment took home a massive profit, allowing him to quit his job and scale to fourteen units in just nine months.

Now, Rafael has twenty-four active units, all grossing thousands of dollars a month in rent for him. Back in March of 2020, Rafael was projected to bring in forty-seven thousand dollars in revenue in one month alone. But, the pandemic hit, forcing him to pivot, switch strategies, and take advantage of the flourishing short-term rental market. He has his sights set on ownership, but now he’s simply raking in the short-term stacks.

In This Episode We Cover:

Rental arbitrage and why it’s a low-cost way to get into real estate investing

Short-term cash flow vs long-term appreciation and combining the two

The startup costs it takes to create an arbitrage empire

How to pitch landlords on using their properties for short-term rentals

Negotiating leases and adding a subletting clause to any lease you undertake

Pivoting when your business hits a wall and combing back stronger

And So Much More!

Links from the Show

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