Banking and Finances for Airbnb Hosts (Ep577 )

In this episode of “Get Paid for Your Pad,” I had the pleasure of chatting with Saad Dar, the head of business development at Baselane, the first-ever Airbnb bank. During our conversation, we delved into the unique banking services and tools Baselane offers to Airbnb hosts and real estate investors.

Baselane was created to address the frustrations that arise from managing multiple tools and accounts for property management and finances. Their goal is to simplify and streamline the entire process, providing an all-in-one platform designed specifically for real estate investors. At the heart of their offering is a business checking account tailored to the needs of hosts.

One of the standout features Baselane offers is the ability to create virtual accounts and virtual debit cards. This functionality allows hosts to easily track revenue, expenses, and profits for each of their Airbnb units. Additionally, virtual debit cards can be assigned to property managers or vendors, streamlining payment processes and simplifying bookkeeping.

What sets Baselane apart is their commitment to customer-centricity. They offer webinars, customer success support, and educational resources to ensure a smooth onboarding experience. Baselane is not just a bank; they also provide property insurance and have plans to introduce lending and other financial products in the future.

During our conversation, Saad mentioned a special offer for listeners. By signing up through a specific link provided in the podcast episode, users can claim a $300 signup bonus when opening a Baselane bank account. To be eligible for this bonus, you'll need to deposit a minimum of $500, use the debit card, and collect rent or payments from Airbnb or other platforms within the first 90 days.

Overall, Baselane empowers Airbnb hosts and real estate investors by providing them with a tailored banking solution and essential financial tools. The combination of simplified bookkeeping, virtual accounts, and attractive benefits makes it an appealing option for those looking to efficiently manage their property portfolios.

Jasper Ribbers:
What's up, everybody? Welcome back to Get Paid for Your Pad. It's very early in the morning here in San Diego, but I'm still very, very pumped because I think this is the first we're talking to Saad Dar. He's the head of business development at Baselame, which is the very first Airbnb bank. Yes, you heard that right. A bank specifically designed for Airbnb hosts. That sounds absolutely amazing. Saad, I'm so excited to learn more about what you guys are doing. Welcome to the show.

Saad Dar:
Thank you so much. I'm very excited to be here, Jasper.

Jasper Ribbers:
Awesome, and give us a bit more detail, give us some background on a bank for Airbnb. That sounds crazy.

Saad Dar:
Yeah, so basically the story of Baseline and the way that the co-founder started is that they themselves owned some properties long-term and short-term, and they realized how disaggregated and frustrating it was to use so many different types of tools out there just to manage your properties. In the banking side, you might have a couple of business accounts, you might have some credit cards. then you might have a different tool for bookkeeping, Excel, tracking the numbers maybe, that different tools for using the Airbnb platform and the calendar and the messaging and all of that. And so much more that we're not even talking about, deal analysis tools and all of that. And I think basically Baselane was formed to one, make it all simple and try to bring a lot of that into one platform. So an all in one type platform. but really to focus in on the finances, that being the core because the finances are really important. And the way that we go to market with that is we created a business checking account that is built for real estate investors. And this isn't in the FinTech space, it's in the verticalized banking segment, if you will. And the idea is that, some people ask us like, why are you starting with a bank? It's because everything that you do related to your Airbnb and short-term rental properties or even long-term rental properties starts with a bank account and money movement in and out of that bank account. So we have built a business checking account that is tailored only to real estate investors. And then we've built other tools, um, and products and services that basically complement that. So one of the most important things is the accounting bookkeeping reporting. And so we've built our own software. that is directly integrated with our bank so you can understand how you're doing today, tomorrow, and on an ongoing basis. And in addition to that, we also cater to the long-term rentals, so we also have online rent collection and more property management tools for that as well.

Jasper Ribbers:
That's amazing. So you're saying that if I was to use your bank, I don't need QuickBooks anymore. I can just literally do all of my bookkeeping and accounting inside of BaseLane.

Saad Dar:
Yeah, that's right. So, you know, my background, actually, my first job out of college was in accounting. I'm a former CPA. That was like the first third of my career. And I'm very familiar with QuickBooks because I actually used to help small businesses integrated for their businesses. But the challenge with QuickBooks is that it's not, you know, really set up for real estate. And I don't know too much about the current form of QuickBooks, but as a real estate investor myself, I know… one of the important metrics for my real estate investments. For example, simple things like net cash flow or net operating income, for example, very simple metrics. And setting something up like that in a third party software that's not designed for real estate is very cumbersome, also very expensive and time consuming. And the average person, I am an accountant, but the average person is not in accounting, they don't know accounting. And so our idea was to create something that's very simple and easy to use. and you can automate as much of it as possible. So for example, we allow for you to connect your existing accounts and external accounts through a third party provider called Plaid, so you can auto import all your transactions, right? That goes into a master ledger. There you can just do something we call one click categorization. And it's super simple and easy. Now we've built some really cool things where if you're using baseline banking, We'll automate some of those categorizations for you. That's the benefit of using baseline banking. For example, if you got rental income coming in, we'll automate that and already tag it as rent. You can set up rules. So if you have, let's say, eight or 10 Airbnb units, and you want to be able to track the income and expenses separately, our bank has something called virtual accounts, which is a new concept. And think of it like envelopes within a main account. You can create many different virtual accounts. and you can purpose each of those virtual accounts, let's say for a specific Airbnb unit, collect the money directly from Airbnb into that virtual account and set up rules so all the inflows and outflows are automatically tagged to that property. So your bookkeeping is kind of getting done for you while you're out having fun or investing in other properties. And so that's the concept of like integrating the two and really making it super easy and simple and automating as much as we can so that you're actually getting your bookkeeping and accounting done so you can see how you're performing.

Jasper Ribbers:
So you're saying you can create a separate virtual account for each of the Airbnb units. Can we also create virtual cards, virtual debit cards?

Saad Dar:
Yeah, you can. So this is a really cool concept because normally real estate investors don't have access to this kind of product, right? Typically, the idea of virtual cards was more on the corporate side with corporate spend cards, for example, and hasn't really been brought to market for small businesses or real estate businesses. And so what you can do on Baseline is you do get a physical debit card with your business checking account, of course, but you can also create these virtual… cards that are basically virtual debit cards. They have their own unique account numbers, expiration date, et cetera. And you can use it for anything. And so the really cool thing is in Baseline, you can set rules on the monthly limits for that card. Let's say it's two, three, $400. You can pre-configure rules on how you want to categorize expenses for that card. So very common thing with Airbnb that might happen is you need to replenish supplies. Just an example. You want to get some more linens or soaps or coffee or whatever that is. Now what I've done is I give that virtual card and I share that information with my property manager. My property manager can then use it, load it into their digital phone wallet and order things with it, for example. So I automated it and I step out of the equation. And all I do is I log into BaseLane and I check what's going on and all of the activity related to that virtual card. is already pre-tagged as a, let's say supplies, as the expense in this case, and the unit because I've already pre-configured it. So my bookkeeping is done. And I can see every single transaction and how the money was spent, right? From there's a lot more you can do on the accounting side, but that's essentially how a virtual card works. And you can open many different types of virtual cards. Some people use it to give it to like their… Property managers, some use it to give it to a vendor like a cleaner and pay the cleaner that way, right? Cause they want instant payment. Others use it for themselves because they want to control their spending. Sometimes we overspend on our units because we think we, you know, we can justify it. But maybe, you know, you want to create a budget and stay within that budget. So these kinds of virtual cars can help you do that.

Jasper Ribbers:
Yeah, no, super, super useful. I love the virtual cards. One of the banks that we use has virtual cards, and I use it all the time. So I see a lot of advantages here, because number one, being able to separate everything out per property and have a virtual card per property is going to make it super easy to understand, like, hey, how much revenue is there? What are the expenses? What's the profit? And that's something that's really important to know. I talked to quite a lot of property managers. It's hard to find somebody who has a clear understanding of, hey, how much profit are you actually making? What are your expenses per unit average? All those numbers, and they are really important to know, especially now that the marketplace is getting more competitive. So we've got to really be on top of our numbers, especially also if we want to work with investors or at some point maybe sell your company. or even getting loaned, it's really important to have those numbers down. So I definitely see some great advantage there.

Saad Dar:
Absolutely. Yeah, we you know, the way I talk about that is like from the banking perspective We're not just thinking about the bank right like that's the starting point. That's where the that's your financial center That's where everything happens, but it's really about simplifying the entire like end-to-end financial workflow of For not for hosts, but also for property managers as well So that you know where you stand at any given time, right? That's really important. And like you said it could be that sometimes I'll ask even myself, how do we do the last three months? Just log into BaseLane and I'll take a look and there you go. As long as I've categorized everything and I set up the right rules, I can instantly provision that. Normally what's happening is most new customers that we see coming in, they might've been using Excel, but laziness sets in, they're very busy, right? You've got maybe a day job, you're trying to manage all these rentals. For property managers, they don't even have a tool that can create these type of financial reports necessarily. for real estate investors that they manage for. And so all of this allows you to easily understand where you stand on any given day.

Jasper Ribbers:
You guys have, is it easy to set this all up? Do you guys have education and videos that people can watch to understand how do we categorize everything and how do we set up these different accounts?

Saad Dar:
Yeah, absolutely. So we definitely invest a lot in and we really care about, you know, being customer centric and helping everybody on board. So there's a couple of ways. I mean, once you sign up, we have a series of webinars that we've launched recently that allow you to watch like depth, in depth product walkthroughs and demos of how to set things up. We have a customer success team that will offer you onboarding help if you need it. So An example is that sometimes just getting set up is complicated because you might have a complicated structure. You know, just this morning somebody asked me, one of the customers asked one of our customer success reps like, how do we, you know, I have a investment property where I have my LLC and the partner has their LLC and we own it together. So how should we set this up? Complicated situation. It's not, there's not one clear-cut answer. So we definitely have our customer success team that helps with those types of questions and give you some guidance on how you might be able to set it up. And then others might have questions on, hey, like I'm just getting started. I have one or two or three Airbnb's. I've never really done bookkeeping. Like I need help with categorization or with understanding what this report means. We will be able to help you there. So you can reach out through the support channel or through our customer success team and we help onboard you that way.

Jasper Ribbers:
Yeah, because that's important because a lot of times, like you said, there's so many tools these days that we could use to manage our Airbnbs. But at the end of the day, it gets complicated too. So

Saad Dar:
Oh yeah.

Jasper Ribbers:
another question, I'm just looking at your website and I see there's quite a few other advantages outside of the whole Airbnb side. But first of all, what caught my attention was I see there's a 4.25% interest rate that you guys provide.

Saad Dar:
That's right. So yeah, I think for us, it's really important to give value back to our customers and to make sure, you know, we're helping them scale their portfolios. And at this time, based on where the market rates are, we're able to, you know, actually do that by giving a very high, very attractive APY back. And so what that means is there's two things in there. One is on any dollar deposited into any of a base laid bank accounts. you'll earn today 4.25% APY. And then if you're using our debit card, you'll earn 1% cash back. And then in the real estate category specifically, let's say like a Home Depot, you'll earn up to 5% cash back. There's some specific provisions on more detailed cash, but that's generally the reward. And we've seen like customers really appreciate that because we're giving that value back to them and allowing them to really like focus on like scaling their business.

Jasper Ribbers:
So to get the interest rate, do you have to lock your money for a certain amount of time? Because I look at one of the banks we use is Chase and we don't get any interest, but we can get some interest, but then we have to lock the money up for at least

Saad Dar:
Yeah.

Jasper Ribbers:
three months, I think.

Saad Dar:
No, so Baseline, it's a checking account and not a savings account. So you don't have to, there are no minimum requirements and there's no lockup amount to get that API. We may be introducing more tiered API structure soon in the near future because we have some investors that deposit much larger amounts, hundreds of thousands of dollars, for example. And we want to also kind of incentivize them and give them… for that. So we will have more tiered APY structures in the near future, but yeah, we're not necessarily requiring a specific dollar amount to activate these APY tiers.

Jasper Ribbers:
So I'm going through some other items here. I see there's no monthly service fees, no overdraft fees, no ACH transfer fees. Because when I use my bank chase, I feel like I have to pay a fee for everything. I also see there's no minimum deposit or balance. It only takes a few minutes to open up the bank account. There's a whole list of… you know, of advantages that I see here. Uh, it almost, so where my mind goes, like I see so many positives here. Uh, you know, I'm thinking like, how is it possible that you guys are able to do this and where I can't chase or, you know, bank of America do this.

Saad Dar:
Yeah, that's a great question. I think basically our business model is inherently fundamentally different than like the larger banks and institutions. Again, we're focused on giving value back to the customer, but obviously we still have to be sustainable and make money. So today our business model does, we do earn on deposits, even though we give a lot of that value back to the users through the APY, we do earn through the use of debit card interchange fees, for example. But really our business model is getting built around the all in one service. And one of the core things is as we scale our banking, we'll offer more products that are banking related so we'll be able to make money that way. Some of the other things that we've thought about and we started to offer you might have seen is like property insurance, for example, or lending and other financial products that real estate investors, hosts or property managers might be needing. We're starting to integrate those into the platform today. So for example, we have a very strong partnership with OB, which is a, um, digital insurance broker. And we have a partnership where, you know, if our customers are, uh, utilizing OB and saving money and getting quotes and binding policies, we'll also earn from that, for example. So our, our thesis is to really provide that core value of the core platform through our banking. Obviously, we want to grow deposits and have more people on the platform using our accounts and debit cards, but also be able to offer these other valuable products like the insurance and lending, et cetera, that help us monetize.

Jasper Ribbers:
Let's talk about the safety and risk. Are deposits insured?

Saad Dar:
Yes, so all our deposits are per entity are insured up to $250,000 FDIC. So yeah, we get that question a lot, as you can imagine, especially after some of the recent you know, banking banks being shut down and things like that. But yeah, at the entity level, each depository account is insured up to $250,000.

Jasper Ribbers:
What are any other security and privacy topics that you can share?

Saad Dar:
Yeah, absolutely. Look, as a bank, right, because at the core, we're a bank. We take security very seriously. That's the number one priority. So the simple way to say it without getting too technical is that we have bank grade security and the levels of encryption that we have are bank grade. What you might expect at other banks as well. We don't like to talk about it too openly, obviously, for security reasons as well, because you don't want to talk about how exactly it works. But yeah. We take security and data privacy very seriously, as you can imagine. Our whole company is built on that premise. And yeah, it would be like any other banking institution that you see out there today.

Jasper Ribbers:
Got it. How long have you guys been around for?

Saad Dar:
We launched our beta product about two, two and a half years ago. And, uh, I think we've been in the, we've been in the market for about a three years overall, but we launched our beta product about two, two and a half years ago and our banking product launched in, uh, I believe March of, uh, 2022. So it's been a little bit of about, about a year and a half.

Jasper Ribbers:
Were you guys initially focused on Airbnb or short-term rental hosts or was it more like general real estate?

Saad Dar:
Our approach to the market was actually general and open because we want to serve landlords and real estate investors of all types and sizes. We noticed though that there was a segment that was growing within our customer base naturally that ended up being Airbnb investors as well. And myself, the co-founders, they have short-term rental properties. We also use a platform for Airbnb management of our units. One thing I'll say is we're very customer centric. We love getting customer feedback. We're obsessed with customer feedback. We're very fortunate to be able to get a lot of it. And we've created these channels like our customer success channel, for example, our support team, where customer council, where we have different ways of getting deep insight from the customers. And so, yeah, we've seen lots of Airbnb hosts and I think a large majority of… Airbnb investors are direct hosts, you know, in terms of like market share, come onto the platform on the banking side and start using it that way because they see the all in one play. And so, yeah, we've generally been focused on the broader market, but now that we're seeing that there's this traction, we've started to invest in more of the Airbnb type features as well. So one of the things that we're working on, just to give you a little preview of the roadmap as an example, and this is more for, you know, this segment, the Airbnb and property manager segment, hosts and property managers, is as you set up the banking, and I talked to you about those virtual accounts, we're working on setting up something that'll allow you to automate or do rule-based transfers between accounts or outside of accounts. So for example, let's say you get paid $3,000 from one Airbnb booking. Now, where does that money go? So with Airbnb, you could send it into one baseline account, let's say all the, the entire $3,000, and then you'll be able to set rules, so you can send it to different virtual accounts, for example, or different external accounts, for example. So if you're a host, it's useful because if you're following like the profit first methodology or something like that, you can then allocate that $3,000 into different buckets, automatically, more rule-based. If you're a property manager managing portfolios for hosts, you can use that and then route money to the owner, for example, as well. So that's something that we see probably coming in the next, I would say, three to four months. Something like that.

Jasper Ribbers:
Nice, sweet. Any other things that you guys are working on that you have in the pipeline?

Saad Dar:
Yeah, there's lots. Like I said, there's a combination of long-term and short-term rental work that we're doing. Generally, though, we are revamping our accounting and reporting. So our transaction ledger is getting a facelift, an improvement in UI, UX. Again, very focused on customer feedback and using that feedback to prioritize our roadmap. We've added things like receipt upload recently. So now you can not only tag transactions, but do receipt upload. In the, I would say generally next six months or so on the accounting bookkeeping side, we'll do more automation like auto categorize as well as more reporting. So those are coming. And I think with the combination of this ability to transfer, which is really kind of like budgeting and allocation of funds, super exciting, with more of this automation on the reporting and the bookkeeping, that's gonna be really powerful. not only for our good host, but maybe property managers as well.

Jasper Ribbers:
You guys are completely online bank, right? You don't have like a fancy like office buildings and well, I'm sure you have an office somewhere,

Saad Dar:
Yeah.

Jasper Ribbers:
but you don't have like physical locations where people can just walk into the bank.

Saad Dar:
That's right, we are a digital only bank. And yeah, but we do offer, you know, we do have a partnership where you can access a wide network of ATMs if you need to. So that's available. It's on our website. You can find out more about that, but yes, we're a little fully digital.

Jasper Ribbers:
forget sometimes that they're still physical cash.

Saad Dar:
That's right. It's still out there. I mean, you know, like, yeah, I think generally speaking, cash and checks are still a pretty decent chart size of payments today. Not just in real estate, not within real estate, I guess less so probably on in the in the short term rental space because a lot of that is digitized through like a platform like Airbnb. You know, customers are paying through a credit card or some account and then they the money gets transferred to the landlord or the owner. But yeah. cash and checks still not going away.

Jasper Ribbers:
Yeah, I just went to Mexico for a couple days. And yeah, it's just funny. There's still places where you can only pay with cash. And it's starting to become a bit rare. But.

Saad Dar:
Yeah, with this, we've offered mobile check deposit, for example. So if you have a check you want to do deposit on, you can deposit that like any other mobile check deposit. And like I said, we have access to about, I think, 55,000 plus network of ATMs nationwide in case you want to withdraw funds through an ATM.

Jasper Ribbers:
Right. Let's talk about the sign up process. I'm trying to open a bank account now here with Bank of California, just a personal account. And just taking so much time and so much documents and I have proof of address and I just moved so I didn't have anything. And I keep going back to the office there, to the bank and telling them like, hey, what's going on? When do I get my bank you know, that's like kind of like making the process take longer. But what's how does how does the signup process work? And I saw on your website, it only takes a few minutes. That sounds pretty incredible to me.

Saad Dar:
Yeah. So if you're signing up for a Baseline account, just creating an account is free. You can use a couple. We just need a few pieces of information to set up your Baseline account. Then you can apply for a Baseline bank account. That also is a very short application. I mean, generally speaking, bank applications will be pretty similar because there are specific, you know, KYC type requirements that everybody has to follow. But yeah, we can. approve you within a few minutes. And so a large part of our percentage of our applications get approved instantly. If you are, let's say you have some sort of a complication, for example, like if you're applying with an LLC and you're missing the EIN number, as an example, right? And you don't have proof of EIN, we will push that. You may get a follow-up from our banking and compliance team. And once the documents are provided, we're pretty quick. We can turn it around in a few hours. Our priority is to get you open, approved as fast as possible, and funded in all your way. And so our entire tech stack of services are set up to do that.

Jasper Ribbers:
Well, I think I might call Bank of California and tell them to not worry about it because

Saad Dar:
Ha ha ha!

Jasper Ribbers:
I'm kind of tired of going over there. And then I know you're offering an incentive for the people that are listening to this podcast

Saad Dar:
Yes.

Jasper Ribbers:
if they sign up now.

Saad Dar:
That's right, so yeah, for your audience, we did create a special offer. So anybody that goes and signs up for a Baseline Bank account creates their account with us. There's a $300 signup bonus. There's some specific terms and conditions that apply, so you can take a look. But yeah, you can go to baseline.com slash pad, P-A-D, or I believe you're gonna be adding a link to the description. that they can follow. So as long as everybody follows that link and goes to that specific page, be sure to do that. You'll be able to earn your $300 signup bonus for your Airbnb bank.

Jasper Ribbers:
Awesome. Is there a timeline limit on that?

Saad Dar:
There is usually a time limit. Again, depending on when you go there, it will make it clear what the time limit is. But usually, it does expire within roughly 30 days, typically. But for this case, we're going to keep it open. Obviously, this is for our partnership. Just like your audience here, we wanted to give a special bonus. So we know it's coming from you. And we know this traffic is, you know, from a specific place so we're going to keep that open.

Jasper Ribbers:
Awesome. Yeah, so we created a link, getpaidforyourpad.com slash bank. So if you just literally type in getpaidforyourpad.com slash bank, you'll be redirected to a specific landing page where you can claim your $300 bonus. There's a couple of conditions. You have to deposit a minimum of $500, use the debit card, and then you have like 90 days to do that, and then also collect. some rent or payments from Airbnb or whatever platform you use within the first 90 days in order to get that $300. So pretty simple conditions. So yeah, getpaytorypad.com slash bank is how you can get access to this bonus. Yeah, I'm really thinking about I might just sign up right after this podcast. I mean, is there any reason for me to go with a traditional bank? I just don't really see any positives.

Saad Dar:
Yeah, look, I think, like I said before, everything that Airbnb investors do, at the core, your financial hub is your bank account. And so it starts there. And I think starting there, creating a bank account that is only purpose is to serve your investment portfolio and then setting up the right accounts and then starting to track the numbers, it's all unified and built for investors. There's no noise, there's no extra things, there's nothing confusing. You don't need to be an accountant. We offer really high or very attractive 4.25% APY, 5% cash back. So yeah, and we talked about virtual accounts and cards that you can really optimize your financial workflow with. So I'd love for you to sign up and yeah, we'll onboard you and maybe we can come back later in a few months to see how it's going.

Jasper Ribbers:
Yeah, yeah, 100%. Well, I'm excited about that. Sweet, is there anything else that we haven't talked about that you want to mention before we wrap it up?

Saad Dar:
No, I think we covered most things. I would just highlight again that I think, for me, having the numbers is really important for many reasons. One is I want to know how I'm performing. In this market, you made a really good point. Things are getting tighter, right? Insurance is more expensive, taxes have gone up, there's inflation with regular supplies and services. So we definitely see that there's a downward pressure on net operating income. because of all these things. And not to mention now, lending is also very expensive, rates are at an all time high. In the last 20 years, these are the highest rates we've had. So keeping all these things in mind, if there were any time to focus on your budget, your numbers, and how your units are performing, this is it. And we think that we've built a really strong and powerful tool with Baseline, our bank, and our accounting and bookkeeping reporting to help you do that. And it's free, right? You know, we're not charging you any money for you to get in there and start managing a portfolio. So we really urge people to look into it and start taking command of your numbers.

Jasper Ribbers:
Awesome. Sweet. Well, again, getpaidforyourpath.com slash bank is the link if you want to take it, if you want to open an account and be eligible for that $300. Well, this is awesome, man. I appreciate you jumping on here. Sounds like you've got an amazing product. I'm really pumped to try it out actually and take advantage of all those benefits and just… Just being able to open a bank account within a few minutes sounds amazing to me right now. So.

Saad Dar:
Yeah, sometimes it's just that. And then the other time it's like a lot more. But no, we're super excited. And thank you so much for having us on. And we're looking forward to having you as a customer as well.

Jasper Ribbers:
Awesome. Thanks a lot, Saad. I'm sure we'll have you back maybe in the next six months or so as you guys are developing more tools specifically for Airbnb hosts. And to the listeners, hope you enjoyed this podcast. It's pretty, I'm pretty excited about it. The bank for Airbnb hosts, that's pretty amazing. So I hope you enjoyed this. Have a great weekend. And we'll be back next week, of course. So see you then.

Saad Dar:
All right, thank you