Turning rental arbitration into a seven-figure business, as detailed by Chi Ta
Short-term leasing is not exactly a new strategy in the accommodation services industry. Many people would unofficially set up their rented accommodation for re-rent while traveling, as a way to save time and have someone take care of their house.
Airbnb is one of the best platforms to run a short term rental arbitrage business because it is available in over 200 countries and regions, and mainly because there are very few places in the world. where people don’t specifically search for Airbnbs.
While many hosts would simply sublet their own leased spaces whenever the need arose, Chi Ta aimed at an overview of the transformation of rental arbitration into a kind of conglomerate. Born and raised to Vietnamese parents in San Francisco, Ta encouraged several entrepreneurial inclinations as a child. He had always been eager to challenge the difficult life sponsored by the extreme poverty in which he had grown up.
Following her father’s advice to work uphill, Ta got a job at Starbucks at the age of 16. Six years later, he had risen through the ranks to become deputy director. Life was simple and beautiful, but he reassessed his goals when young real estate moguls began to frequent his workplace.
These guys were coming over for coffee and I realized they were about my age, but they seemed to be on top of the world”, Ta remembers. “They drove Porsches, Lamborghinis and Land Rovers. That’s what every young man wants. I had no idea what a mortgage was, but I went to the office a day after my shift and told them I wanted a job. I left Starbucks immediately after.
Ta delved into business with these guys and was posted in telemarketing as a newbie. This was in 2008, at a time when the global financial crisis was at an all time high and people were extremely careful about their finances. He made 800 phone calls a day and still couldn’t get enough funds for his basic interview. Eventually, the company declared bankruptcy.
A drop from the top
Most of the staff had to find other means of subsistence, but Ta and a few others were retained as loan officers. He could have moved on then, but at the most difficult moment in financial history, he decided to learn all he could about the business from his superiors.
“Over time, with repetition and practice, I finally made my first fence,” Said Ta. “Soon after, I took out three loans, and later got about 10 to 15 loans per month. From that point on, I adopted the honey badger mentality and continued to work with sheer tenacity. I brushed aside the rejection because I knew if I wasn’t working I wasn’t going to eat and I told myself I would never starve again.
Ta worked hard to realize his visions and two years later started the Senior Advantage Association, a reverse mortgage brokerage firm that managed massive operations in San Francisco and the Philippines. The income quickly reached millions of dollars, Ta was leading a great life, and everything seemed perfect.
Until it doesn’t.
The qualification procedures and criteria for reverse mortgages were revised by the Ministry of Housing and Urban Development in 2017, and it was only a matter of time before Ta’s business collapsed completely. .
However, when one door closed, an entire door opened. When he found himself in a dire financial situation, Ta moved into a three-bedroom apartment to cut costs. Eventually, as things weren’t improving, he packed his things and decided to sublet his rental while spending time with his parents.
Two weeks after re-renting his house to Airbnb guests, he received $ 2,500 in platform fees. A light bulb came into Ta’s mind as he realized that he could actually earn enough to cover his rent in a month.
I didn’t know if it would work, but I extrapolated the data and saw that if two weeks made me $ 2,500, a month would cost $ 5,000 ”. Explained you. “The rent was $ 3,900 which would make me a profit of $ 1,000.
Work hard and smart
Ta thought that if he could make such a decent profit from an apartment, he could start a full-fledged business if several houses were available to him for relocation. However, he didn’t have enough money to settle down with the owners and furnish the apartments, and that became the next hurdle he had to overcome.
“The only thing people respect is cash in the bank,” he said. “This is the only way they can rent a house from you. I didn’t have any cash in the bank. So I applied for a bunch of credit cards and got about $ 250,000 in lines of credit – personal and business. I cashed them all through manufactured expenses. “
Once he had the funds ready to go, he partnered with some landlords, received their consent to run a relocation business, and immediately got down to furnishing the spaces to standards. Once everything was sorted out, Ta started renting the first properties on Airbnb. He learned how to optimize his listings for better visibility on the platform, and in no time the return on investment began to be felt.
As he learned more about the inner workings of the business, he continued to increase the number of his properties until he reached thirty by the end of 2018 – twenty-eight to San-Francisco and two in Bali, Indonesia. As the year ended, Ta had exponentially multiplied his income from the first $ 2,500 to $ 2.4 million. As his business strategies evolved, he also began to co-host properties with owners to achieve reduced customer payments.
It details a useful overview of its growth process.
“With my system, it all starts with finding areas where people already operate Airbnbs and finding a property that can make you at least $ 2,000 a month after all spending,” You said.
As a beginner, you can use a software tool like AirDNA to do this research. A major hurdle for most relocation aspirants is figuring out how much money to invest safely when starting a winning property. When I first started it usually cost me between $ 20,000 and $ 25,000 to fix a single property, which includes the first month’s rent, security deposit, and some incredibly sexy furniture. Don’t go with all that Craigslist stuff like everyone else does and make your ad look like a garage sale. Go for tasteful furniture, pay attention to detail and you will have a winning property.
While managing his growing conglomerate, Ta also runs BNB University, an online masterclass platform that offers rental arbitrage enthusiasts a wide range of resources to start and support their businesses, no matter what scale they wish to operate – from versatile hosts like him or just learning owners to work in complete safety.
“I wanted to share my experience so that when people want to take the Airbnb journey, it shortens their learning curve and helps them avoid the costly mistakes I made,” Said Ta. “I feel like I am now well balanced to the point where I can take anyone in the world and help them build an Airbnb business that will thrive.”
Posted on May 29, 2021