What is the best way to create long-term wealth?
As Airbnb hosts, we can leverage our expertise running a short-term rental business to acquire properties of our own.
But what does it look like to buy a STR property? How, exactly, do you finance a purchase like that?
Juan Carlos Morales is the serial entrepreneur and Airbnb investor behind Capital Jetset, a beachfront vacation rental company out of San Juan, Puerto Rico. He leveraged the rental arbitrage model to start his business and has since added management units and purchased properties of his own to build a portfolio of 30 STR units.
On this episode of Get Paid for Your Pad, Juan Carlos joins me to explain what differentiates a business owner from a manager and describe how he built a team of 13 employees to run Capital Jetset.
He shares his unique approach to rental arbitrage, challenging us to get creative and negotiate deals that are beneficial for both sides—you and the property owner.
Listen in for Juan Carlos’ insight on why it’s a good idea to buy STR properties and learn how to finance YOUR first Airbnb property in the ownership model!
Topics Covered
How Juan Carlos got into Airbnb by mistake
- Listed spare room on Airbnb when roommate moved out
- Tried listing whole place, 3 months booked in 1 night
What differentiates a business owner from a manager
- Doesn’t impact daily operations if business owner absent
- Manager’s absence causes problem
Juan Carlos’ team of 13 employees
- General manager
- Assistant to GM
- Host manager
- Housekeeping supervisors
- In-house cleaners
- Handymen
The breakdown of Juan Carlos’ hybrid business model
- 85% rental arbitrage
- 10% management
- 5% ownership
Juan Carlos’ unique approach to rental arbitrage
- Target properties sitting empty for months/years
- Offer to invest $10K and renovate unit himself
- Ask for market rent + rent abatement period
Juan Carlos’ advice on starting a STR arbitrage business
- Don’t be afraid to invest your money
- Be creative and propose deal beneficial to both sides
- Build trust with property owner over time
Why Juan Carlos decided to start buying properties
- Owners have power to raise rent
- Property values increase over time
How Juan Carlos benefits from owning STR properties
- Net worth tripled, banks take him more seriously now
- Control over business affords more stability
How Juan Carlos financed the first Airbnbs he purchased
- Leveraged existing relationship to negotiate owner financing
- Brought in third-party appraiser to justify offer
Juan Carlos’ plans for the future of his STR business
- Continue to grow, create wealth and help people
- Buy building and small hotel, develop boutique hotel
Connect with Juan Carlos
Resources
The 4-Hour Workweek: Escape 9-5, Live Anywhere and Join the New Rich by Timothy Ferriss
The E Myth: Why Most Businesses Don’t Work and What to Do About It by Michael Gerber
Legends X 90-Day STR Accelerator
Email jasper@getpaidforyourpad.com
Sponsor
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