How to Scale After Buying Your First Airbnb Through Co-Hosting and BRRRR+STRs
Introduction
Are you a young investor looking to generate cash flow? In this blog post, we will explore the strategy of scaling your real estate portfolio after purchasing your first Airbnb property through co-hosting and the BRRRR+STRs method. Our featured guest, Patryk Swietek, shares his insights and experiences on how he successfully scaled his portfolio and achieved financial success in the short-term rental market.
Patryk emphasizes the importance of custom links and targeting a specific audience to maximize bookings. He shares how he created a romantic getaway for couples in Joshua Tree, deviating from the typical design style of the area. With the success of his first property, Patryk plans to expand by building a new luxury two-bedroom property on the adjacent land.
Key Takeaways:
Scaling in real estate through cohosting and BRRRR+STRs can generate significant cash flow.
Acquiring properties in one market allows for easier management and increased opportunities. Even low-performing properties can be turned around with reinvestment and updates. Honing in on your target audience is crucial for success in cohosting and short-term rentals.
Building relationships with real estate agents and vendors can lead to off-market deals and cost savings. Utilizing lifestyle influencer images can help potential guests visualize themselves in the space.
Leveraging data and experience in a specific market can help make informed investment decisions. Investing in design and luxury finishes can significantly increase rental rates and profitability.
Success in real estate requires dedication, taking risks, and pursuing what you love. Building a portfolio of properties and acquiring management companies can lead to long-term success in the industry.
The Benefits of Co-Hosting and BRRRR+STRs
Patryk Swietek, a seasoned real estate investor, emphasizes the advantages of co-hosting and the BRRRR+STRs method. By co-hosting, you can split the investment costs of a boutique hotel among multiple investors, allowing you to gain equity and generate cash flow. With the BRRRR+STRs strategy, you can stack properties that generate a net income of $1,000 to $5,000 per month. For example, if you invest $700,000 in a property, it can be appraised at $1,000,000 to $1,100,000, resulting in a significant profit.
Overcoming Market Challenges
When faced with market challenges, Patryk advises struggling investors to focus on building relationships and networking within their target market. By establishing connections with real estate agents and other industry professionals, you can gain access to off-market deals and valuable insights. Patryk's success in the Joshua Tree area is a testament to the power of doubling down on one market and leveraging the benefits of a strong local presence.
Patryk's Real Estate Journey
Patryk's real estate journey began with the purchase of his first property in the Smoky Mountains of Tennessee. Despite facing job instability and getting fired from three jobs in one year, Patryk took a leap of faith and invested all his savings into a short-term rental property. This initial investment proved to be a turning point in his career, as the property appreciated from $306,000 to $465,000 in just a year and a half.
The Move to Joshua Tree
Motivated by the desire to expand my real estate portfolio, I decided to sell my Smoky Mountains property and focus on the Joshua Tree market. Teaming up with my business partner, Josh, we saw great potential in this area for short-term rentals. We believed that by implementing the co-hosting and BRRRR+STRs strategy, we could scale our portfolio and achieve financial success.
Implementing Co-Hosting and BRRRR+STRs
To begin our journey in Joshua Tree, we started by co-hosting properties with other investors. This allowed us to split the investment costs and minimize our risk. By pooling our resources together, we were able to purchase a boutique hotel and convert it into multiple short-term rental units. This not only increased our cash flow but also gave us the opportunity to generate equity in the property.
With the BRRRR+STRs method, we focused on acquiring properties that had the potential to generate a net income of $1,000 to $5,000 per month. By renovating and improving these properties, we were able to increase their value and attract more guests. This strategy allowed us to quickly scale our portfolio and generate a significant profit.
Overcoming Challenges and Building Relationships
Like any investment journey, we faced our fair share of challenges along the way. The Joshua Tree market was competitive, and finding off-market deals was not easy. However, we learned the importance of building relationships and networking within our target market. By connecting with local real estate agents and other industry professionals, we gained access to valuable insights and off-market opportunities.
One piece of advice I would give to struggling investors is to never underestimate the power of networking. Attend local real estate events, join online forums, and reach out to experienced investors in your area. Building relationships can open doors to new opportunities and help you overcome market challenges.
The Results and Future Plans
Through our dedication and hard work, we were able to scale our real estate portfolio in Joshua Tree. Our properties consistently generate a net income of $5,000 to $10,000 per month, allowing us to achieve financial success in the short-term rental market. The properties we acquired through co-hosting and the BRRRR+STRs method have appreciated significantly, giving us the option to sell and reinvest in new opportunities.
The Power of Custom Links and Targeting Your Audience
Patryk starts by highlighting the significance of custom links in his Airbnb listings. He personally remembers and writes out all his custom links, allowing him to easily track and manage his listings. By creating custom links, Patryk is able to tailor his listings to specific audiences, such as couples looking for a romantic getaway. While some may argue that this limits the number of potential guests, Patryk believes that honing in on a specific audience is crucial for success.
Creating a Romantic Getaway for Couples
Patryk goes on to describe his first Airbnb property, a cute and romantic one-bedroom cottage in Joshua Tree. He hired a talented designer who incorporated natural elements to give the space a Joshua Tree vibe. Despite the older style of the interior, the property has been well-received by guests. The appraisal for the property came back at $560,000, with Patryk's total investment at $440,000.
Expanding with a New Luxury Build
Patryk reveals his plans for expansion by building a new luxury two-bedroom property on the adjacent land. He already has all the construction documents ready and expects the project to cost around $700,000. With the success of his current property, Patryk is confident that the new build will be appraised at $1 million to $1.1 million. The income generated from the first property will be used to fund the new build, making it a profitable investment.
Managing the Mortgage and Increasing Bookings
When asked about the mortgage on his first property, Patryk admits that he doesn't remember the exact amount but mentions that it is at a higher rate. However, with the success of his Airbnb business, he is confident that he will be able to manage the mortgage payments without any issues. Patryk also shares his strategy for increasing bookings, which involves partnering with lifestyle influencers to create stunning images of his properties. He believes that these images, combined with his custom links and targeted audience, will attract more guests and ultimately lead to higher profits.
Partnering with Management Companies and Reinvesting in the Business
To further scale his Airbnb business, Patryk plans to partner with management companies to handle the day-to-day operations of his properties. He believes that by outsourcing tasks such as cleaning, maintenance, and guest communication, he will have more time to focus on expanding his portfolio. Additionally, Patryk emphasizes the importance of reinvesting in the business. He plans to use the profits from his current property to not only fund the construction of the new luxury build but also to refresh and update his existing properties. By constantly reinvesting and staying ahead of the competition, Patryk is confident that he will continue to make money and grow his Airbnb empire.
The Future of Patryk's Airbnb Business
Looking ahead, Patryk envisions a future where his Airbnb business is thriving and he has multiple properties in various locations. He plans to continue targeting specific audiences and creating unique experiences for his guests. Patryk also expresses his desire to incorporate luxury finishes and amenities into his properties, as he believes that this will attract higher-paying guests and allow him to demand higher rates. With his determination, strategic mindset, and passion for hospitality, Patryk is well on his way to achieving his goals and becoming a successful Airbnb host.
The Key Factors for Success in the Airbnb Market
1. Pricing
Pricing is crucial when it comes to attracting guests to your Airbnb. Patryk emphasizes the importance of finding the right price point for your property. Whether you are overpriced, underpriced, or not priced correctly, it can have a significant impact on your bookings. To optimize your pricing strategy, consider consulting with experts or conducting market research to ensure you are charging a competitive rate.
2. Marketing
Marketing plays a vital role in attracting guests to your Airbnb listing. Patryk advises owners to focus on creating appealing photos and a well-written listing description. Additionally, understanding how your property ranks in the Airbnb algorithm is essential. Are you on page one or buried on page ten? By optimizing your marketing efforts, you can increase your visibility and attract more potential guests.
3. Product Improvement
The product itself, your Airbnb property, is another crucial factor in its success. Patryk suggests that sometimes a property may simply be lacking in quality or amenities. If this is the case, consider making improvements to enhance the guest experience. However, it's important to note that one thing you can't change is the location of your property. If you are in a less desirable location, you may need to make the best of it by focusing on other aspects such as pricing and marketing.
4. Location
When it comes to the location of your Airbnb property, Patryk advises making the best decision based on what you have. While you can't change the location, you can still optimize other factors to attract guests and make your property successful. For example, if your property is in a less desirable location, you can focus on offering competitive pricing, exceptional marketing, and a high-quality product to make up for it.
5. Property Management
After purchasing a property management company, Patryk was able to streamline his operations and ensure consistent cash flow. He emphasizes the importance of having systems in place to effectively manage multiple properties and handle client inquiries. Additionally, Patryk highlights the significance of conducting thorough due diligence when considering property acquisitions, including negotiation and analyzing potential returns on investment. By implementing these strategies, Patryk was able to successfully scale his Airbnb business and achieve financial success in the real estate market.
The Importance of Systems and Vetting Clients
According to Patryk, there is no cap on scaling your Airbnb business. However, as you grow, it becomes crucial to have systems in place to handle the increasing workload. Patryk emphasizes that the marginal amount of work for each client decreases as you take on more leads. This allows them to focus on quality clients who are easy to work with and share the same vision.
To ensure they have the right clients, Patryk and his team prioritize vetting potential clients. They look for clients who align with their values and are on the same page as them. This helps create a positive working relationship and ensures a smooth experience for both parties.
Building a Strong Team
In addition to having systems in place, Patryk highlights the importance of having a strong team to support the growth of your Airbnb business. He mentions hiring a Chief Operating Officer (COO) whose sole responsibility is to handle systems and operations. This allows Patryk and his team to focus on other aspects of the business, such as sales.
Patryk believes in finding the right match for each role within the team. While he loves sales, his COO excels at building systems. This complementary skill set ensures that each team member can focus on their strengths and contribute to the overall success of the business.
Expanding Through Acquisitions
Patryk's strategy for scaling his Airbnb business involves acquiring other management companies. He shares his experience of buying out a second management company through a contract buyout. This approach allows them to select the contracts they want and integrate them seamlessly into their existing systems.
The process of acquiring a management company involves ensuring that the contracts are assignable. If they are not, the new owners need to get the clients to sign again. Patryk emphasizes the importance of due diligence before signing any contracts to avoid potential liabilities.
Becoming a Major Player in the Market
To become a major player in the Airbnb market, Patryk emphasizes the importance of staying flexible and adapting to the ever-changing market conditions. He believes that being open to new opportunities and constantly evaluating the business model is crucial for long-term success. Patryk also mentions the significance of focusing on the top three revenue-generating properties to maximize profits and streamline operations.
How To Start Generating Revenues From Your Properties
1. Financing
In terms of financing, Patryk suggests being strategic and exploring different options to fund the growth of your Airbnb business. He mentions that using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy can be a great way to acquire new properties and generate additional income. By refinancing the property after renovations, you can pull out the equity and use it to fund future acquisitions.
2. Expenses
When it comes to expenses, Patryk advises keeping a close eye on the numbers and constantly evaluating the return on investment for each property. This includes monitoring the net revenue, growth margins, and overall profitability. By analyzing the data, you can identify areas where expenses can be reduced or optimized to increase the bottom line.
3. Networking
Patryk also stresses the importance of building strong relationships with local vendors and service providers. This includes having reliable cleaning crews, maintenance teams, and contractors who can quickly address any issues that may arise. By having a solid network of professionals, you can ensure that your properties are well-maintained and provide a positive experience for your guests.
4. Social Media
In terms of marketing and guest acquisition, Patryk suggests leveraging social media platforms and online travel agencies to reach a wider audience. He emphasizes the importance of having professional photos and well-written descriptions to attract potential guests. Additionally, he recommends implementing a pricing strategy that takes into account market demand, seasonality, and competitor analysis to maximize occupancy rates and revenue.
5. Diversify Strategies
As your Airbnb business continues to grow, Patryk advises staying in growth mode and constantly seeking new opportunities for expansion. This may involve exploring different markets, diversifying your property portfolio, or even venturing into other short-term rental platforms. By staying proactive and adaptable, you can position yourself as a major player in the Airbnb market and continue to scale your business successfully.
Meeting Like-Minded Individuals at Conferences
Attending conferences and masterminds can be a great way to network and learn from others in the industry. Patryk Swietek, a successful Airbnb host, shares his favorite interactions from these events. One of his best experiences was meeting Matt McCall Stillman, a client of his and a close friend. They instantly connected and formed a strong bond based on their shared energy and passion for the business. Another memorable encounter was at the STR wealth conference, where Patryk met a seasoned host who casually mentioned owning an impressive number of rental properties. Little did Patryk know, this person was the founder of a property management software company that he had criticized in the past. Despite the initial awkwardness, they ended up having a great conversation and Patryk learned valuable insights from him.
Taking Action and Learning from Mistakes
When asked about advice for someone looking to get started in Airbnb in 2024, Patryk emphasizes the importance of taking action. He shares that he didn't have much knowledge about management companies or how to manage properties remotely when he first started. However, he didn't let that stop him from diving in and learning along the way. Patryk believes that inaction is more costly than making mistakes because it prevents growth and progress. He encourages aspiring hosts to focus on solving the immediate problems they encounter and not get overwhelmed by thinking too far ahead.
The Benefits of Buying Property Management Companies
Patryk explains why he prefers buying property management companies over boutique hotels. He highlights the faster cash flow and the ability to stack multiple properties that generate consistent monthly income. While boutique hotels may offer equity buildup and the opportunity to split investments among investors, Patryk's focus is on generating immediate cash flow. He also mentions the vast number of vacation rentals in the market, with only a small percentage being managed by the top players. This presents opportunities for individuals like Patryk to acquire individual contracts or entire companies and consolidate the market.
The Importance of Laser Focus
In a conversation with Josh, Patryk reflects on the difference in his mindset now compared to before. He acknowledges that he used to have a scattered focus, trying to do too many things at once. However, he has now developed a laser focus on buying and selling properties by implementing the BRRRR+STRs strategy and focusing on one project at a time.
The Focus on Scaling
During the interview, Patryk emphasizes the importance of scaling in the short-term rental business. He believes that scaling allows for increased profitability and efficiency. Patryk mentions that he has expanded his business by acquiring property management companies, which has enabled him to manage a larger number of properties. By scaling his operations, Patryk has been able to streamline his processes and increase his revenue.
The Role of Marketing and Full Production
Patryk and the interviewer, Josh, discuss the role of marketing and full production in scaling their businesses. Josh mentions that he is focusing on building a marketing company and offering full production services, such as live filming sessions. He plans to charge more for these services, as they require a higher level of expertise. Patryk agrees with this approach and mentions that he is also leaning towards ads in the investing space and using a CRM platform like Go High Level to streamline his operations and increase scalability.
The Benefits of Go High Level
Patryk reveals that he uses Go High Level for his property management business. He explains that he primarily uses it for management purposes, such as sending automated messages to potential clients. However, Josh suggests that Patryk should utilize more features of Go High Level, such as auto-booking calendars and lead generation. Josh advises Patryk to scrape the contact information of property owners from Airbnb and create a drip campaign to engage with them. This strategy can help Patryk expand his business and attract new clients.
The Power of Video Content and SEO
Patryk shares his success with video content and SEO in attracting potential clients. He mentions that he creates videos about Joshua Tree and the real estate market, targeting potential property owners before they even obtain their permits. By providing valuable information and establishing himself as an expert, Patryk has been able to attract a steady stream of clients who are interested in investing in short-term rentals in Joshua Tree.
Patryk also emphasizes the importance of SEO in his marketing strategy. He explains that by optimizing his website and blog posts with relevant keywords, he has been able to rank higher in search engine results. This increased visibility has not only brought more traffic to his website but has also helped him establish credibility and authority in the industry.
Utilizing Social Media and Online Communities
Patryk and Josh discuss the power of social media and online communities in scaling their businesses. Patryk mentions that he actively participates in Facebook groups and forums related to real estate investing and short-term rentals. By sharing his knowledge and expertise, he has been able to build a strong network of like-minded individuals who have become valuable resources and potential clients.
Furthermore, Patryk has also created a YouTube channel where he shares tips, insights, and behind-the-scenes footage of his short-term rental properties. This not only helps him attract potential clients but also allows him to showcase the unique features and experiences that his properties offer. By leveraging the power of social media and online communities, Patryk has been able to expand his reach and attract a wider audience.
The Importance of a Drip Campaign and Lead Magnets
Josh suggests that Patryk should consider implementing a drip campaign and lead magnets to further engage with potential clients. A drip campaign is a series of automated emails or texts that are sent to leads over a period of time. This allows Patryk to stay top-of-mind with potential clients and nurture them until they are ready to make a booking.
To attract leads, Patryk can offer lead magnets, such as free guides or checklists, that provide valuable information to potential clients. By offering these resources in exchange for their contact information, Patryk can build a database of hot leads that he can then engage with through his drip campaign. This strategy not only helps him build relationships with potential clients but also increases the likelihood of converting them into long-term clients
Conclusion
In conclusion, scaling after buying your first Airbnb through cohosting and BRRRR+STRs can be a lucrative strategy for generating cashflow, especially for young investors. By strategically acquiring properties in a specific market and leveraging property management company acquisitions, you can maximize the benefits of owning and managing short-term rentals.
This approach allows for increased efficiency, access to off-market deals, and the ability to capitalize on the full ecosystem of resources and connections within the market. If you're struggling in the market, consider following this advice to scale your Airbnb business and achieve long-term success.
Scaling your Airbnb business after buying your first property can be achieved through cohosting and implementing the BRRRR+STRs strategy. It is important to create custom links and listings to target your specific audience, such as couples looking for a romantic getaway.
Hiring a skilled designer can enhance the appeal of your property, incorporating natural elements and unique design elements. Reinvesting in low-performing properties and refreshing them can lead to increased profitability. By utilizing lifestyle influencer images and effectively managing bookings, you can maximize occupancy rates and generate significant income. Consider expanding your business by acquiring management companies and investing in luxury finishes to attract high-paying guests.
Scaling in the Airbnb market requires careful consideration of three key factors: pricing, marketing, and the quality of your property.
These elements can greatly impact the success of your rental. Location plays a crucial role in attracting guests and maximizing profits. While buying a property management company can provide cash flow and operational benefits, it is important to conduct thorough due diligence and negotiate the deal wisely to avoid overpaying and encountering unforeseen challenges. By implementing effective systems and acquiring new clients strategically, you can successfully scale your Airbnb business and achieve long-term success in the market.
