95. Mastering Financial Freedom Through Real Estate: Rich Monroe's Journey from House Flipping to Short-Term Rental Success

We serve as a hub for connecting with fellow members during our sessions so you can share successes , ask questions and keep the momentum going .

It's for those who want to invest and be able to achieve financial freedom earlier . And tonight , leigh Baudenay are joined by an awesome guest .

We're joined by Rich Monroe , who's an Airbnb ambassador , community leader , with over 20 years of experience flipping distressed properties , helping rehab those all around the metro and putting those back together over 400 properties that he's done .

He's also the managing member of Diamond Edge Properties , which is a company that helps to manage over 75 short-term rentals across Georgia and Florida . He's the president of Amstrakh , which we'll get into what that acronym means and what they're doing around Atlanta a little bit later and all around . Awesome guy , rich , thank you for joining us tonight .

You know both of you are young guys . This is back in the early 90s when the buying and selling of debt was something that was really just starting . You know they had the failed banks in the late 80s and the resolution trust corporation came in and started buying up all the debt .

So basically my industry that I got started in was in the secondary market of consumer loans , mostly auto loans and some mortgages , but not as much , and basically very similar to real estate .

We would buy , you know , this delinquent debt for pennies on the dollar , typically looking to make two or three times our money over three or four years , right , and so we would farm these out to collection agencies and basically try to collect mostly credit card debt , but all types of consumer loans . And so that industry was great .

You know I was with a large corporation , senior VP 8000 employees . Right after 9-11 , except in 2001 , I branched out and started my own company doing the same type of business buying and selling debt and collecting on debt and then 08 rolled around with the recession and basically shut that entire space down right .

So the creation of the CFPB Consumer Financial Protection Bureau and basically making banks be a lot more conservative you know , rightfully so after the mortgage crisis , they stopped selling debt and so I kind of saw the writing on the wall and started buying tax liens , which is obviously very similar to the industry I was in , and so it was something I was

accustomed to doing , right .

So we got pretty aggressive and started in Georgia and in Maryland and we bought about 350 properties through tax lien investing and , through that process , really got an introduction to real estate and also started doing rehabs on higher level properties here in the Atlanta area , and so , as you guys know , even today foreclosures are very competitive and typically get

bid up to pretty high numbers , and so we navigated in the $350,000 , $400,000 or higher mortgages where there wasn't that much competition , and so we would pick up these you know , usually higher end homes put in about $100,000 in a rehab and then flip them out as well as my tax lien business , and so that's really how I got started in the real estate in the

beginning .

And so all across the United States , if you don't pay your property taxes , basically they auction that off to other investors in a similar format that they would have a foreclosure home . These investments typically will have first lien or superior lien position , so it doesn't matter if there's a mortgage on the property .

You're basically inheriting the same rights as that county or city government . And in each state is very different , right ? So some states you have to bid the interest rate down to win it . Other states you have to bid up the amount that's owed up in order to win it .

And Georgia , you know you might start out with a delinquent property tax of $5,000 , it might get bid up to $50,000 . And the two exits on it are there's a 12 month redemption period .

So the person that's got that was the original owner or anyone that has lien position on that property has 12 months to redeem that investment from you or that tax lien from you plus a 20% penalty right . So as an investor , you can make your $50,000 investment . You can make 20% .

It actually goes up the year after another 10% if they take too long to redeem it . So it could be as much as 30% , and then ultimately , if no one wants to protect their rights , you end up being able to take the property right . So it's a lengthy process .

You have to go through a quiet title action but ultimately you can strategically go after properties with the intent of trying to basically pick them up . There's a lot of institutional investors that do this as well , and they're all .

They just want to return , they don't want the property , and so there's a strategic way to kind of go about it so that you are ending up , you know , with the property . We typically , on a lot of those , we wholesale them to other investors . We had a low enough cost basis in those .

Some of them we kept and converted into long-term rentals , and that's kind of what got us started with kind of building up a portfolio .

When did you first learn about short term rentals and what was your first one like ?

You're told you're doing well if you're , you know , netting 200 to 300 bucks per unit per month as a net income and so you've got to get up a whole lot of properties to get up . You know , to some of our goals that we all have as our monthly revenue goal and so this was about nine years ago .

We started and when I say we , my wife's in the business as well . So she's a partner . She does a lot of our staging on our rehab . She works with our contractors and picks out the finishes and things like that , and in our short-term mail business she manages our cleaning operation . Then she also does all the staging for our properties .

But , and so we looked at trying to develop , you know , a long-term rental portfolio and Very quickly , even though a lot of them we had property managers managing it we quickly got burnt out from having to evict people right before the holidays , having to rehab that property again , and that's a painful thing to do .

If you , if you rehab it to begin with , and you had someone in there for six months to a year and they just start tearing up stuff . So yeah , and then you look at at the numbers at the end of the year or would have you , and it's like , where are we making money ? How , I'm just banging my head up against the wall , right .

And so I looked at the short-term rental model and it was like a light bulb moment for me . You know , it's simple math . You can make two to three times the revenue , property stays in much better shape and you don't have the headaches of chasing people down collecting . You know the rents , right . And so we made a conscious decision to shift our business .

At the time , we were probably also doing about seven to eight rehabs a year , which is also a friggin job , right . I mean , you got to manage the contractors . You got to the financial stress of not closing on time and then having your hard money loan come do and everything that's involved with that is just , you got to keep the pipeline turning .

So so for me it was like a pivot moment . I said you know what that's . I want to kind of focus on growing something that's gonna , you know , make our lives a little bit , you know , more quality , a little bit more passive , have the flexibility . You know my wife and I have three boys .

We have Recently now we have eight grandchildren and so we want to be able to enjoy , you know , family time . So we make we shifted gears and we said look where I'm only gonna do short-term rentals . I'm still doing rehabs , but it's only if I'm gonna keep it as a short-term rental .

I'm gonna , even though I had some rental properties at the time , we kind of liquidated anything that didn't fit the short-term rental model .

We converted some of the long terms over the short term and then really the beginnings of this and a lot of folks get started this way with rental arbitrage is really how we kind of grew and scaled it quickly in the beginning , right , and so you know we had a clean slate .

A lot of our rental properties were in Savannah , augusta and Macon , and so I was looking around the Atlanta market as far as where would be the best place to kind of get a business started and really grow a short-term business .

And we looked at at the heat map , right , you always you don't want to reinvent the wheel , you want to look at where all the activity is where we're the high occupancies , where are the high revenue .

And so , you know , I kind of gravitated to that Virginia Highlands , pond City Market Area , walkable to a lot of the restaurants and the bars , the Atlanta Belt Line and just really up and coming .

I targeted kind of these midsize multifamily buildings , 20 units or less , and Very quickly went from one unit , our first one bedroom , we ended up doing two other units in that same building was an eight unit building .

The owner , within a few months , had a few other buildings a few blocks away in the same neighborhood and Started enjoying , you know , the properties being a much better shape , no issues with the rent getting paid on time , and so ultimately we had full access to their expiration on their long-term rentals to convert them over .

And so , you know , within a six month period we went from one unit to maybe 12 , with just a couple relationships , right , and so it's a little bit of a different mindset because , you know , as an investor , a lot of folks are hung up on owning property and equity , so it's a little bit of a mindset shift but ultimately what you're doing is investing in that

monthly net cash flow , right , and so for before you know it , with 10 properties , you could very easily be at 10 to 15,000 a month in revenue , which can allow you to take a deep breath as an investor and say you know what that's gonna come in consistently . I can kind of take a step back and figure out strategically what I want to do .

I'll still do rehabs here and there , I'll still wholesale here and there , but you know , ultimately the bills are gonna get paid every month , right .

And so that allowed us to then open up One of the things I love about this industry and I know , I know me that you've got rental properties I think Leibon does as well but ultimately , once you kind of get this thing started and you build your process and your operation , you can you can grow very quickly , right , because it's not gonna be too much of a

strain on what you're doing , whether you have 10 units or 70 units . And so what we did was we opened it up to managing other investors properties as well , besides some of the properties we were rehabbing . And so you know , all through COVID I think we ended up at our peak .

We were probably at around 75 properties total Right before the Super Bowl down in Tampa a few years ago we expanded down to the Tampa Florida market and so we had about 20 properties down there that were all four and five bedroom homes that we managed for another investor that was doing rental arbitrage , and so this was run a lot of charge on four or five

bedroom homes instead of one bedroom apartments , which again is definitely a thing . It's not just apartments that you can do this with . It actually works Actually more lucrative with larger properties as well , and so I like the diversity of the three different I call them the three different strategies and short-term rentals .

And Again , the beauty of it is you can fold it all up into the same operation , right , so you're not making any drastic adjustments or changes . Everything gets followed into the same process and systems to run your guest communications , your cleaning operation , your back office . It's all kind of systemized around the same operation and rich .

And if you're able to really just get Become an awesome person at one of them , put the 10,000 hours in , put the systems in place . All of a sudden your cost start to come down , it gets a lot easier and you can expand to different markets .

But earlier on you were talking about some of the heartpangs that Personally been through , and I know a lot of other investors and you look at the long-term rentals , right , that's the scariest thing is when somebody's actually checking out that's been there for a couple years . You're like , hey , what am I gonna get back ?

Is all that cash flow gonna go back into putting that property together ? Yeah , and then , when you look at the eviction process , that's definitely one that we've talked about some horror stories on here , and we're gonna have to bring you back at some point to to talk about horror stories with some of the other investors that we brought on .

But there's the short-term rental game . There's a couple things you want to cover here , because you are uniquely qualified to help a lot of individuals in our network . First and foremost , arbitrage you mentioned that was a way that you grew your portfolio . Is arbitrage still doable in 2024 ?

They're not going to understand it , but you just move on to the next one and so , ultimately , the very first one we did one of the first ones we did in Virginia Highlands that I mentioned .

This was a family-owned property and it was the daughter that was managing the properties , and so she bought the building with one of the units already up as a short-term rental and she basically thought she could do it on her own , even though she was mainly doing long-term rental property management .

And so one of the reasons she really engaged with us very quickly is she got even on one property her trying to do the guest communications and kind of handle the bookings and manage the cleaners .

She quickly realized it's just too much work , and so a lot of people that own property , whether it's one property or multiple , like we talked about earlier , there's a lot of investors .

They want to be very passive , they don't want to have to deal with day-to-day stuff , and so at its peak , we were managing probably 6,000 to 7,000 guest stays per year , and so you really need to have your shit together when you're managing that kind of volume .

And so why would somebody just hand over their property and allow you to pay market rent and you're going to be able to do short-term rentals and make higher revenue ?

The answer to that is that people just don't have the bandwidth to do what's necessary to be successful , and even more so now , post-covid , it's required for you to really run this like a business , or you're just not going to be able to get the occupancy and the ADRs where they need to be to be successful .

Now this other piece is one that I was excited to cover with you , selfishly because of the properties that we manage , but also I know that there's going to be a lot of questions on this once we open it up to the audience and that's about the Atlanta short-term rental ordinance .

So I've been trying to keep my team up to date with that piece , but you are uniquely qualified to tell us a little bit about the history of it , where we are now and where you think it will go . We're not going to hold you to it , but where you think it would go .

And before we even jump into that , I just want to relate to everybody else on the line that we actually have the president of Amstrak on the call right now . Would you mind explaining what Amstrak is and then talk about the Atlanta ordinance ?

It is a nonprofit group that we got help from VRMA and rent responsibly some of the national short-term rental advocacy groups that basically help local cities and counties that are battling these ordinances get things situated and kind of get started .

And so you know , as you could probably tell when I made the decision nine years ago to be all in with short-term rentals , I'm not the type of person that just does things , you know , nilly-willy , so I'm kind of all in . This is my livelihood .

At the time that that thing was passed on March 2021 , which basically said you can only get a legal license if you have a primary residence in the city of Atlanta . You can do that property plus one additional .

At the time that that got voted in , I had 32 different properties in Atlanta which I wasn't even able to make application for a legal license right . So I've had unfortunately or fortunately I've had prior experience with legislative . In my past life in the consumer finance space .

I was very active on Capitol Hill and with attorney generals and kind of crafting laws around helping that space . So we very quickly rallied a number of folks that are very slimmer to me that had multiple properties in Atlanta . Some of them are owners , some of them are managers that have the same issue that I had where we couldn't make that application .

So we have right now we have 10 other board members of Amstrakh that we formed very early on and we very quickly raised about $70,000 as a legal fund to basically hire an attorney , wilson Dubow , who have already had experience battling jurisdictions in Georgia that were very prohibitive with short-term rentals .

And essentially we had to and this is probably shortly after they voted this in about six months or so after we sent a letter to the city of Atlanta and basically said we feel very strongly that we all have property rights and this ordinance is definitely going to be a detriment to our membership and we're going to be forced to file a grandfathering lawsuit in

the event that we cannot get something resolved . We definitely prefer to not go down that road . We'd be happy to work out an alternative , long story short , that got the council members and the city planning and the legal department's attention and the mayor's office's attention to basically have a seat at the table with Amstrakh representatives .

We also hired a local lobbyist that has a lot of relationships with the council members and we've been participating along the way with .

Last summer they had a hearing where we brought about 40 of our members to basically bear witness to their hearing on the positive things that short-term rentals bring to the economy and all the things that we all know are true , instead of those one-off different horror stories that you hear about the parties that are thrown and things like that .

So we've been successful with them . City of Atlanta essentially delaying the enforcement date . This has probably happened four or five times since this thing was enacted to allow us time to negotiate , renegotiate essentially what the current rule and current ordinance is . Now they're obviously with government nothing moves fast .

We have made some traction shortly after that hearing that was last June , by meeting with Marcy Overstreet who at the time was the chairperson for the community development . She now , beginning part of this year , that's kind of changed . Westmoreland and Jason Winston are now the co-chairs of that committee .

So we are in the process right now of having a meeting with those folks to talk about rewriting the ordinance and kind of reframing it and then defining what the enforcement date would be . We've already , throughout this process , come to understand a couple of things that haven't been formally publicly made available on the City of Atlanta's website .

However , we're comfortable saying from Amster's perspective that , based on what we've proposed , we already understand that they are agreeing , or they will be agreeing , to strip away the primary residency requirement Not wholly on our efforts , although we did have something to do with it but they were looking at what happened in New Orleans not too long ago , where there

was a Supreme Court ruling that basically deemed it unconstitutional for a local jurisdiction to require somebody to be a resident to get a local license to do short term mail . So obviously they looked at that , even though it's a separate district , and so I'm pretty confident that's going to come off of there .

So I live in Buford , I don't live in Atlanta , so that's not going to be an issue for anyone that doesn't live in the city that has short term mental . Short term mental is there .

The other thing that we have been proposing is , instead of this , plus one cap or kind of limiting the number of units , we're looking at proposing more of a global cap , and we've been working pretty closely as well with Airbnb's and VRBO's policy teams and their lobbyists and kind of somewhat been in lockstep with the logic in terms of where we want to end up

with this , and so conceptually similar to Savannah . They have a 20% global cap . In the historic district in Savannah we might have any more than 20% of the properties doing short term metals , and so we're looking at a similar concept here in Atlanta .

We feel pretty good that it's going to be a reasonable amount , that right now the 11,000 or so listings that are active in Atlanta represent about 3% of the housing units , and so we're going to have potentially a number that makes sense to give us room to grow , and we feel that that's going to be a better proposal .

Now it is also going to involve agreeing to caps on multifamily , so anything above a four unit building will have different caps depending on the size of the building , and so I think that makes sense as well .

But there are some instances , as you guys are probably aware , of buildings like Peachtree Towers and Landmark that have 90% plus of those units doing short term metals . So there'll be some exceptions to that as well , as anytime there's a condo association that's allowing it , that kind of circumvents the local jurisdictions anyway .

So so that ultimately , I think the end game here is hopefully a much more investor friendly . You know , passage of this ordinance once it's once they start enforcing it . The last and final , and probably the most important piece of this is that we also feel pretty confident that they will be agreeing to grandfathering rights . And so what does that mean ?

So when they draw the line in the sand , let's say we all get a clear understanding of the new rules and we all have to kind of make application , and let's say , I don't know , let's say August is the deadline for that to happen .

As long as you are already up and running , running a short term rental as of that line in the sand , you should be able to continue to do so , even if some of the other requirements are restricted from doing that . And so what does that mean as an investor ?

A lot of us and me to your point , a lot of people haven't really gotten to know exactly what's been going on here . All they see is what was voted in on March 2021 . And so a lot of people have been holding off and kind of slowing down and kind of sitting back to see what happens .

But ultimately you're better off , you know , pursuing your opportunities in the meantime because , essentially , once this thing gets finalized , if you're already up and running , you're going to be in a better spot than if you're not .

Because of the work that you've been doing , I've been joining a couple of the meetings that you host to give updates and what you just went through was this is something that people are going to need to rewind back and listen to again to really thoroughly understand the history right .

A lot of these courts , a lot of these cities are looking at what happened with other cities and you know you mentioned the New Orleans case . That's a huge one . That's not too far away .

So Atlanta wants to make sure that whatever they pass is going to allow us to kind of move steadily so they can collect the income , not have a lot of disturbances , things that nature , but they can also kind of partner with B&B .

And we can't thank you and the Amstrak community enough for the work that you guys have done and for mobilizing so quickly , because it truly is giving us a path forward and it's exciting .

We have the structure based on how many units you have , so obviously , if you've got a lot of units , then your membership dues are going to be a little bit higher . If you've got one to four units , it's going to be in the $100 per year range . So go to amstrakorg and join , because we also do in-person meetings .

We have another one coming up in March where we're going to be doing an update to the members , and we also do virtual meetings , and we've got some other things planned for this year as well that are going to be more meaningful events that kind of help us all deal with what we're dealing with . Right , we're about to get into the peak season .

Well , what are some of the events and things that are coming into town we should be aware of ? And so we're going to try to put in some content .

That's not necessarily talking about what's going on in Atlanta , but helping us all kind of do better in our businesses as well and to kind of that point in , kind of us supporting each other , community matter and everything like that .

They've made a recent change to their platform that used to require kind of a monthly subscription fee based on the zip code or the city Atlanta might be 150 bucks where Marietta might be 30 bucks , so it was based on population .

So they've changed away from that model to where now it's a $25 starting point per month and you've got full access to not only Atlanta or Georgia but the entire United States as well as the entire world .

And so when you go on vacation and you're kind of poking around which we do quite a bit and look at other opportunities , you've got that same tool that you can use . Now I always caution folks . I mean it's a good starting point .

It gets you a good indication of what's going on in different markets and helps out with targeting what markets you want to go after . But when you do a deeper dive , there's multiple other things that you can do as well .

I have a Facebook group called BNB Investing Group where we do a lot of networking there and kind of masterminding and we talk about different strategies . I actually do a weekly Facebook Live I have one coming up tomorrow , just like you guys are doing a weekly podcast .

I do a weekly Facebook Live at five o'clock Eastern and the focus there is kind of like what we're doing here . We just interview experienced investors that are specific to short-term rentals . In real estate . There's so many different niches .

It's the same thing in short-term rentals , right , we have folks that only focus on arbitrage , that only focus on management , maybe acquisitions , and we've got people that do container homes , tiny homes , luxury tents , yurts . So I do a lot of different interviews with a lot of different strategic folks across the United States .

We talk about their experience , how they got started , and we can kind of all learn from that . So if you're an investor that's just starting to kind of figure this out , it's a good group to be a part of , for sure .

If you already know about short-term rentals and you're kind of ready to get started and kind of grow a scalable business , and so through that Facebook group and Facebook Messenger you can reach out to me directly and I usually like to schedule like a quick 10-minute call just to kind of get a good understanding of what your goals are , your objectives , where you're

trying to get to , and if I feel that our program might be a good fit for you , then we'll do a deeper dive Zoom meeting after that , you know , usually , or I can recommend that you kind of continue , you know , joining and checking out what we're doing in the group , stay tuned , or there's other different resources that I can refer you to , depending on kind

of what you again strategically , because we're typically only going to work with folks that are ready to take action , that have specific goals , that are ready to generate revenue , and you know they know they want to do 20 , 30 , 40 , 50,000 a month in revenue over the next 12 months and they're ready to take action .

And those are typically the folks that we will bring on to our program , because we typically want to limit the number of folks that we bring on to because we do . I'm doing a lot of one-on-one coaching . If you join our program , we're also doing weekly group coaching calls as well , and then you know .

So the main objective is when we're starting with you is that first 90 days we ultimately want to get you up and running , generating revenue on that first property , and then we kind of lay the groundwork to be scalable and rinse and repeat and kind of go from there .

And so that's kind of the main focus and , just like we talked about the strategies earlier on , that's really the starting point . What strategy do you want to focus on for that first property in the first 90 days ? And so management is a good , easy way to get started . You don't need a whole lot of money .

You can actually make revenue by doing the market analysis for people that are looking to try to do short term rentals , and so we walk folks through how to do that and basically we provide you with all the agreements we use with our clients and you know we kind of provide that support and that foundation to help folks that are ready to grow .

There's going to be many that listen in the future , but to those that are online , please feel free to join via the chat function and or the join live to ask any questions to rich .

What are your thoughts on you know investing overseas and kind of vacation countries and have you seen people succeed ?

You can do that in other countries too , right , and so I was actually born in Guyana , I grew up in Jamaica , my wife's from Trinidad , so I've got kind of a lot of ties to the Caribbean , and so we already have a two bedroom condo in Montego Bay .

A friend of mine has a five bedroom house that's about an hour and a half outside of Kingston , on the south side of the island that we are about to manage , and so all those tools we talked about earlier too , and the same thing you would do for , you know , analyzing a property in Lawrenceville , georgia , it's the same process in in the grill of Jamaica or

Port of Spain , trinidad , right . So so , yeah , I think ultimately and we've got other folks that are doing this internationally I've done my Facebook live interviews with people that are doing well in Puerto Rico and in Europe as well , and so Australia , you know . So this is just , this is a global phenomenon .

It's not just something that you can focus on in the States and , again , I think it lends itself to to that power that you're going to basically instill . Once you master this thing , ultimately , you can do it anywhere in the world .

My question is what is what is like an initial investment that this person need to come with on day one ?

I have a client that recently started that just wants to generate 2500 a month initially as net cash flow . So I was kind of using that number as loosely as an example , but but your question is spot on .

So essentially , you know , when you start out , whether you're doing now this is only if you're doing acquisitions , if you're buying a property , or if you're doing rental arbitrage , or if you already own an existing rental property you want to do this with . Maybe you have a basement apartment .

So ultimately there are startup expenses that you are going to have to to do in the beginning to do this right . And again , you know we , we like to say , run this like a business and you want to be competitive , you want to get quality items and so to do it right , on a one bedroom , you're going to be in that $8000 to $9000 range .

On a three or four bedroom , you're going to be in that 25 to 35000 range , you know , to make sure you're off to a good start . Now that includes everything electronics , television , electronic locks , outdoor cameras , all the towels and linens and things . So that's your upfront investment .

But with rental arbitrage specifically , you're typically going to , you know , get that return on investment , usually within an eight month window eight to nine months for the most part , and if you're not , then it's a deal you shouldn't be doing , right , because your numbers are going to be too tight .

So usually that's going to be kind of the plan you and it's like I said with the rental arbitrage is a little bit of a different mindset , because you're going to take nine grand , you're going to put it down on a unit with the expectation after eight months it'll be spitting off anywhere from 800 to 1500 a month in revenue . As an example , on larger homes .

That net revenue would be higher , of course , and so that's really kind of the starting point , understanding , and so as you build your business and add more units you can kind of back into well , if my goal is 12,000 a month in revenue , then how many units do I need to get to to that 12,000 a month in revenue number ?

Right Now , that only applies to rental , arbitrage and acquisitions , right ?

So if you are managing a property for an investor , basically those upfront expenses are coming out of the investor , not out of , not out of you as the manager , right , you're coming to them with the expertise of running the market analysis , being able to set the property up and get everything set up for them and manage the entire process for them for a 25%

management fee , right ? So long term rentals usually 10% . Short term rentals usually about 20 to 25% .

And so when you start looking at numbers , a lot of the four and five bedroom houses that are doing $6,000 , $7,000 a month in gross revenue , you know you're you're potentially going to be in a pretty good spot just on one property to be in that 1,500 to 2,000 a month in revenue as manager , right ?

And so that doesn't require any kind of you know , meaningful startup money . There's still marketing involved and prospecting in the beginning , but you can get started with that right away and , as part of what we've worked with some of our clients on in the beginning , to gain traction and add a lot of units that way as well .

You've mentioned management opportunities in that realm as well , and I'm wondering , for someone who's starting off and still doesn't have a lot of like a lot , a lot of properties or an established business , that you could go to home or another investor and convince them like , hey , I've done this 10 times already in the past and I have my track record how would

you , how would you , go into that business as a , as a beginner ?

You know over those years , and so it doesn't have to be me . There's other mentors out there that can help you .

But that's one way to kind of start from scratch and not without having that direct experience , you can kind of go into that umbrella when you're prospecting and let them know that you're a part of a mentor mentorship organization that's got multiple properties experience and a lot of times even with rental arbitrage .

That's one of the things that some of our clients use as well is our experience with a lot of master leases too .

I wanted to selfishly ask , especially because you're so you know , uniquely positioned to answer , if there's been any talks or if you know of any kind of movement surrounding legislation or like laws in surrounding counties of Atlanta .

I know I'm in College Park , karim , I know you're in East Point or maybe Haithill , but I know , specifically for College Park , there are kind of whispers of short term rentals and they've said Airbnb specifically being illegal and I wanted to . I want to get more info on that from someone .

I'm still trying to poke the right person to see who can tell me more about that , cause it was at the bottom of a newsletter . They were like hey , by the way , airbnb is illegal . You know that money you're making like , yeah , you can't do that , so I wanted to right , just like a little footnote at the bottom , like your whole business is a fraud .

So I wanted to ask if you if there's any combo at all of any surrounding county legislation surrounding that .

I mean , I think we on purpose in the beginning when we set up Amstrak , one of the reasons we named it Atlanta Metro short-term rail alliance is because we ultimately , once we're done with Atlanta you know that's where we're doing the heavy lifting right now we're going to be having coverage on the Metro and so you know , before the Atlanta ordinance I was the

board member of Stra-Waga , which was a wide , a statewide short-term rail association . You know that we did lobbying efforts . So I've done state legislative stuff . I participated on state hearings at the Capitol on the study they did on short-term rentals there's actually another bill that I'll give you guys an update on .

That's going to be pending here shortly as well but so all the surrounding counties and cities I've probably been at some of their hearings Forsyth County , unfortunately , with the nonsense they did up there , you're basically you're not able to do anything with a short-term rental unless it's agriculturally zoned and you still have to get a conditional use permit , which

is just a bunch of hoops to jump through , you know . So it might as well technically be not allowed , but I've actually been able to get licenses in Forsyth County , so it's not impossible . But , to answer your question specifically , college Park and East Point both , unfortunately , have adopted this primary residency concept .

I think College Park is a little bit more stricter than East Point to the extent where the only way and don't forget , guys , this is how Airbnb got started as a home sharing company , right ?

So the whole concept of Airbnb and a lot of their lobbying efforts there's no mistake that every single major city across the United States has adopted this primary residency thing , right ? Washington DC , new York , san Francisco , you know , chicago is because they kind of default to this .

We started out with you being able to rent your couch or one of your rooms , and so College Park has that kind of restrictive requirement where , yes , you can do short-term rentals , but it's your primary residence and you have to physically be in that home when you host guests that come in , right .

And so I look at these types of restrictive things as opportunities , because you can still definitely look at different options in the surrounding areas that don't have that restrictive requirement . Now , obviously , there are folks out there that are doing short-term rentals , no matter what you do . Orlando is another tough one , believe it or not .

That has the primary residency requirement and you have to actually have , you have to be in the property . So what happened ? Kissimmee has 17,000 listings , right , it's 20 minutes away from Disney and they have a short-term rental ordinance . It's very reasonable .

You get a license , they keep track of if you get any complaints , and then you get suspended if you have an issue . So I like navigating in pockets where there are problems and you can still kind of solve for that in terms of being able to still see where the opportunities are .

So I got a couple of Marietta and then also like the decaders of the world right , where there's not really anything in place but to your point , atlanta is kind of that stopping ground and most of the other counties I would assume would kind of follow suit based on what happens here . Hopefully .

So because I had the failed arbitrage last year , you guys probably remember I talked about it pretty extensively and I was just wondering , because one thing you had mentioned was going from one to 12 arbitrages in like six months and I wanted to ask how you did that and how many people you had on your team at that time when you made that happen .

And just like , what was that ? Like right , like I mean , how did you realistically , you know , I guess , yeah , just kind of walk us through that .

That's a job in itself , managing people that don't show up to work , and you know I used to try to stay away from , you know , developing this large staff right . So , on purpose , everything we do is kind of outsourced to independent contractors , although we typically try to treat them more like strategic partners .

We pay them well , so they get our attention and they tend to , you know , get started with us , like the cleaning team I have , in Atlanta , got started with our very first unit nine years ago , right , and so we do the same thing when we onboard units .

You can put in each compartment each task and basically have that task handled by , in most cases , an outside vendor , whether it's a handyman or if it's a staging company or what have you . And so you obviously are gonna be required to spend the time to oversee everything .

But you know , when you set up eight units in 45 days , everything has to be done on a schedule and on a plan and with dedicated . You know the roles and responsibilities of folks and so again I say this , I've said it a couple of times already to run it like a business , you've gotta basically have the ability to have the mindset to cover those expenses .

I'm not doing myself any good . I know how to install a Yale internet lock very quickly , but if I'm setting up eight units my time is better spent than me being the one to set up those eight locks right . So I'm happy to pay my handyman that's on our team , you know , 20 bucks a lock to get it done right , as an example .

And so when you those of you that are already doing rental arbitrage for a period of time recognize this , it only takes a couple of landlord owner relationships to really have your growth catapult . You know they immediately see the benefit within the first month or two of working with you how well the property is , stay in shape .

They get that ACH wire on time every month with the rent . Meanwhile they're still chasing around their tenants trying to collect money from them , and you know they're getting problems with people smoking weed and all kinds of other stuff .

So very quickly they'll want to convert as many units with you as you can take on , right , and so when those opportunities come up , you want to be able to execute , and so everything that we do and everything that we have in our operations is around that in mind , because you know those eight units may not be available for me to casually do that over the

next three or four months . It's an opportunity now and I want to be able to execute on it . So it's not . I'm not trying to throw roses at it and say it's easy , right , but there's a way to do it so that you can kind of manage the process instead of you being the one doing a lot of the heavy lifting and Rich thank you .

You just got to start taking steps right , start taking steps toward what you want this to look like in the future , and you can always adjust along the way and you're going to get better right and as you continue to grow , better systems come out and you can always adjust along the way so that our systems come out and your processes get better .

You don't start off on day one at least I assume you don't with a big organization , with people , you don't hand your band all over the place and they would go out of state , but you can grow to that .

But you got to start where you're going to end up and so you know I kind of position it that and I get pushed back from a lot of our clients . You're like , well , that's expensive , that's going to cost this , why don't we just wait ? No , you got . If you're going to go to one unit , to 20 in the next six months , then this is what's required .

You don't want to be here six months from now doing your own price optimization and spending , you know , four hours a day figuring out what events come into town on Friday . Right , I mean , all that stuff has to be automated from step one , from the first listing , and then it makes it a much easier process for you to scale that business from there .

And we're going to put all the contact info into the show notes of this podcast , both on YouTube as well as in the Apple podcast , and we'll kind of take it from there . But , rich , thank you .

But , you know , I really appreciate you guys having me today and this has been fun . Thanks a lot . No , thank you .