Michael Sjogren – Company Owner of Short Term Rental Secrets at STRSecrets.com, talks to Neil Henderson and Brittany Henderson, the hosts of The Road to Family Freedom podcast. He has built a portfolio of short-term rentals of over $100,000 a year in cash flow. He is also educating people on how to do it themselves over STRSecrets.com. Learn how a past family crisis became the catalyst to get involved in real estate, and ultimately maximizing his Airbnb rental opportunities.
Good thing I got you here.
Recording, right? Okay. All right, again.
Neil Henderson 0:21
Greetings friends and families. I’m Neil.
Brittany Henderson 0:23
And I’m Brittany,
Neil Henderson 0:23
you’re listening to the road to family freedom podcast. Our guest today has built a portfolio of short term rentals generating over $100,000 a year in cash flow. He’s also educating people on how to do it themselves over str secrets.com. Michael Shogun Welcome to the road to family freedom.
Mike Sjogren 0:39
Thanks for having me, guys. I’m excited to be here.
Neil Henderson 0:41
Yeah, we’re excited to have you. So I’ve read a little bit about your story. And I know that you sat down at one point and you wrote down a five year vision plan for where you wanted to be. And one of those included a chalet up on a mountain. Can you tell us that story? Yeah, absolutely. So
Mike Sjogren 1:03
this was probably four years ago, roughly. And I was in a mastermind group. And one thing that they asked us to do, and we joined is to write out our five year vision in vivid detail, and I had never really done that exercise before. And I blown it off for a few months. And then finally, I sat down and asked myself, okay, what, what does my ideal life look like five years from now. And the first line that I just started writing out was, my wife and I are sitting out on the deck of our mountain said chalet playing with our son knows the first line. And then I went through and I had a bunch of other stuff. And Fast Forward 18 months later, we purchased that chalet at the top of the mountain up in the White Mountains. And quite frankly, I hadn’t put too much time into actually putting the pieces together the universe, whatever you believe in, just kind of pulled it together through this unique real estate strategy and say, sad day, we’ve just been full steam with short term rentals. So it’s been a fun journey.
Neil Henderson 2:04
So let’s do I want to dig into that. That first deal a little bit more because I think that’s so important. So many people struggle with getting past that first deal. How did you how did you find it?
Mike Sjogren 2:19
Sure. I found it just on Zillow, literally just on Zillow.
Neil Henderson 2:24
So it was it was rental ready. It wasn’t a rehab. You didn’t have to do a lot of rehab on it. Oh, it
Mike Sjogren 2:30
was disgusting. I definitely I renovated the entire property. I I looked at it on Zillow and the views. There’s 180 degree views of mountains, like right out the window. So I just saw massive potential in the property. I mean, it had green carpets plaid couches, like it was it was nasty, like 1980 style everything in the place that had never been renovated. And it had just flooded actually. So it definitely it definitely needed some work. You know, we we put all that new flooring in, had it painted, had the trim painted all new furniture, on the bathrooms, you know, soup to nuts. painted the cabinets just to keep it a little more on the cheap, I guess replacing all the cabinets but put some new hardware on it and it looked great. And yeah, it definitely needed some work, though. Yeah.
Neil Henderson 3:23
Can we dig into some of the numbers like what what you were able to acquire for what it costs you to to rehab it?
Mike Sjogren 3:30
Yeah, absolutely. So we purchase a property for 177,000. Put about 25,000 into it to renovate it and furnish it. It’s a two bed, two bath, 1200 square foot condo style chalet. And yeah, I would say now that we’ve gotten our numbers tighter, and we’ve done a bunch of properties for to bed, you’re looking at roughly 10,000 furnish it. So about 15,000 of that went into the renovation, and then the rest was in furnishings.
Neil Henderson 4:01
So it typically takes you about 5000 a room to furnish a short term rental property now.
Mike Sjogren 4:07
I would say a two bedroom is 10 grand, I would say a one bedroom is probably closer to between seven and eight. Gotcha. So if you add an extra bedroom, yeah, yeah, exactly. You’re adding basically a bed and some decor and that other bedroom, but that’s
Brittany Henderson 4:22
spending a lot more on like the kitchen, or Well, we’re talking about furnishing.
Mike Sjogren 4:28
Yeah, but you still need all the plates, silverware, towels, linens, you know, all that fun stuff that goes into it. Yeah.
Brittany Henderson 4:36
Yeah. How hard was it to figure out sort of what you needed. I mean, we have our short term rental, but it’s basically a room in a bathroom. So it has like a microwave and a small refrigerator and a coffee bar. There’s there’s not much else as far as like, you know, normal Bedroom Bathroom needs like, how do you guys decide how much to put in a kitchen because I’ve seen you know, we’ve gone to a few different Airbnb, some of them are really stocked and then others are kind of like you couldn’t you couldn’t cook in the kitchen even if you wanted to, which sort of sucks because I think that’s kind of what a lot of people want out of a rental, a short term rental that has a kitchen, at least in my world, but I follow a lot of food bloggers.
Mike Sjogren 5:22
Yes. So first things first, I always recommend folks whatever strategy you’re going to go with whether it’s short term rentals, multifamily, whatever real estate stocks, you name it, get educated first. So I just found some people through my mastermind group that were already doing this. And I was like, let me let me learn from them and see how their operation was going. Right. So I got I got a little bit of a baseline. And then we figured out all right, well, who do we actually want to serve? Right, like who’s our ideal target market for this property. And in this case, it was families like us, right, were in between four major ski resorts. And then in the summer, were right behind the place called story land, which is like the Disney World of New Hampshire. So it’s perfect for you know, young, young families or couples going away for a weekend. So we were like, Okay, well, what would we want in here? And that’s evolved over time. Right? So initially, we had the basic pots and pans. You know, my wife’s an interior designer, so she handled all that. But then over time, right, it was like, Oh, be nice. We had a blender to make smoothies in the morning. Right? So we had a blender in that property. And, you know, oh, it’d be nice if we had like a toaster. That worked. Because whatever, we tried to keep the one that was there, you know, so you kind of add stuff over time. soaps, shampoos, lotions, makeup remover wipes, because people, ladies love to destroy my white towels. So we got makeup remover wipes. So all these little things that you kind of learn along the way. But you can, I always like to think of it as there’s three different levels, right? You can be the Walmart, the target of the Nordstrom of your market. And we like to play in that, that target space, like we like to be that upper upper target. So, you know, we don’t have quartz countertops or anything like that. But we do have nice new flooring. You know, comfortable. Everything’s brand new, like nothing in there secondhand and everything ties in. Usually, you look at that Walmart property that half the kitchen doesn’t function. You know, it looks like it was furnished out of a yard sale. It’s just, you know, it doesn’t really tie together. Yeah, you’re attracting a certain demographic.
Brittany Henderson 7:22
Yeah, you want you want the moms where target is our sanctuary.
Mike Sjogren 7:28
Target is deadly.
Neil Henderson 7:31
For your wants to go to Target every day.
Brittany Henderson 7:34
Yeah, yeah, he’s gotten a taste of the buying ache is worse than than I think I am.
Neil Henderson 7:42
So I’m the numbers guy. So I want to dig in a little bit more on that. So you were all in for a little over 200,000? Correct? Yes. Did you? Did you buy a cash? Or did you put a loan on it?
Mike Sjogren 7:57
Now we put a loan on it. So I took a loan out of my 401k. So I’ll backtrack real quick, right? So I like many folks, I heard the traditional advice, right? Go to school, get good grades, get a good job, put 10% in 401k, and you’re going to be fine when you’re 65, or whatever, right? So I went to school got good grades, I became an accountant and a CPA and all that work to me made a decent salary. And I kept putting money in a 401k. And it wasn’t really doing much. And it was just sitting there. And then I started learning about the power real estate, like I’m sure a lot of these folks are learning from you guys and reading books and everything else. And I was like, all right, I want to get in the game. But I didn’t have a lot of liquid cash. But I had a decent chunk in my 401k. So I took a loan out for 40,000 from that. And then I put the renovation on a credit card. And that was pretty much it. So I was all in my cash, all in cash on cash was about 65,000 in cash between the 401k. And then the credit cards. And the rest we got along for about 140,000 to get that property.
Brittany Henderson 8:59
Did you guys, unlike the credit cards, you do like zero interest for a while and then it goes back right away?
Mike Sjogren 9:06
Yeah, so we did. It was I think it was almost two years, 18 months or 24 months, no interest. And I was confident that we’d be able to pay that down pretty quickly. So side note,
Brittany Henderson 9:17
to do that with travel money travel. Do you get point?
Mike Sjogren 9:21
Oh, I did not. And a friend of mine is big in the travel hacking. So recently, I’ve been learning a lot from him. Because I have family that live all over the place. I want to see them more often. And he was giving me some strategies to maximize that out.
Neil Henderson 9:38
From my experience, it’s tough. We don’t typically you’re not gonna get points on the cash advance stuff like that when you do zero interest. And with a lot of those zero interest cards, you’re not going to get that detour. Right. So what and what do the numbers What did the those numbers look like maybe in the first six months for For Bookings and things like that, and what gave you the confidence that this is going to work I’m putting in $65,000 in loan money. I mean, it’s money, you have to pay back, what gave you the confidence that you know what this is going to work.
Mike Sjogren 10:22
At that point I was let me let me step back real quick. And just tell you a quick background story about my son first and then we’ll we’ll get into why we did this right. So I was working a nine to five, pretty much, you know, salaried employee making as much as I could with that job. And then I bought into the whole, you gotta grind thing, you need a side hustle. So I built a side hustle up, was making an extra two to three grand a month on the side doing photography On nights and weekends. But at that point, I was completely tapped out like there were no hours left, right, I was working, you know, call it eight to six, and then coming home editing photos till 2am. And then I was gone all weekend photographing new properties. And I was it was working, I was making money. But I wasn’t seeing my wife, I wasn’t seeing my son. And one day we woke up. And he had a rare condition called interstitial lung disease. So basically, when he was sleeping, he needed to be on oxygen. And one day we were driving in the car and he passed out. We didn’t have oxygen with us, and we couldn’t wake them up. And so now I’m flying down the highway going about 110 in my jeep trying to meet an ambulance halfway to Boston Children’s Hospital, not able to wake him up. And then finally the ambulance got there, they were able to revive him. And, you know, we followed them along into the hospital. And I just remember sitting in the hospital, were there for probably three weeks at that point. And all of a sudden, like, the thought came, like, Okay, I’m making good money, I want to focus on my son right now. But if I don’t go back to work, the money is stopping right now. And these medical expenses are piling up fast. And I remember saying to myself, like, how crummy is that, that I’m worried about money instead of hundred percent focusing on my son. And I, at that point, I was like, I’m going to find a way to make money without trading my time come hell or high water when I get out of here, like when I was confident that we were going to get through the whole situation with my son. But from that point, it was like the epiphany that like, money doesn’t mean anything if you don’t have your time. It just clicked for me. I was like I had heard it before. And it sounded cliche. And I was like, Yeah, yeah, whatever. But in that moment, I would have given every piece of asset that I owned, just to spend time with my son, you know what I mean? And just to make sure that he pulled through that. So that was kind of the catalyst that got me looking into real estate and trying to figure out, Okay, how can I, how can I make passive income without trading my time for money. So when we when we move forward with this, Shelley, it was kind of twofold was a celebration of him. outgrowing this disease that he had and no longer needing to be on oxygen, then to it was to Neil’s point, running numbers, and being confident that this, this would work based on these numbers, right. I’m a CPA by trade. So I’m, I’m running numbers left and right. And just looking at it, I’m like, I know this is going to work, just I just had a feeling that it was going to work. And so for the first two months or so, I grossly under charge what I do now, because I wanted to get as many people through there as possible to get as many reviews as possible to hit super hosts as fast as possible. So for those of you that aren’t familiar with this business, particularly say on Airbnb, quite frankly, any platform, if you’re looking at properties, and they all look fairly the same, but one person has 105 star reviews, and one has five five star reviews, you’re most likely going to book with the person with more reviews, right? It’s it’s a review based business. So I knew that and I wanted to get as many people through there as possible. And then I got that little logo, you know, super host after about six weeks, just because we thought so many people through there. And by keeping our rates low, I was able to cover my costs, you know, at least breakeven, those that first month or two. And then it was off to the races. And since then we’ve met it anywhere from about 1200 to 1500 a month after all expenses on that one property. So doing the math out it’s roughly between a 20 and 30% cash on cash return every year so far. So
Neil Henderson 14:24
well, one, thank you for sharing that story about her son. But you know it,
Brittany Henderson 14:31
it hits home.
Neil Henderson 14:34
And then is so he has grown out of that.
Mike Sjogren 14:40
Yes, we were very fortunate it took about 18 months, doctors not really being able to give us a clear answer on what was going on. And they put the poor guy through endless tests. And finally I said, we’re done testing, like, I know he’s gonna help grow this. And I don’t know if you’re familiar with the book thinking grow rich. But the the first and the first story they talked about in that book is the author son was born without ears and Doctor said that he was never going to be able to hear. And every day he just instilled the belief in his son that he was going to be able to hear one day, and I held on to that story for dear life, you know, for that 18 month window, that was pretty scary. And I didn’t know how he was going to outgrow it. But all of a sudden, one night, we put him down, put his oxygen monitor on, I flipped it on. And he was perfect and did not need oxygen after that day again. And it was literally a miracle. But it was just following that that story to the tee of just instilling that belief in not even a little bit my son, but I mean, he was young, but more so my wife, my family, everybody else, like we don’t need negativity, we need positivity, he’s going to outgrow this, he’s going to be fine period. And it was just pretty incredible. So
Neil Henderson 15:50
so you know, with traditional rentals, long term rentals, you know, there’s a lot of rules of thumb in regards to expensive and percentages of, you know, 1% rule 2% rule 50% rule, what kinds of rules of Is there any kind of rules of thumb that you go into with a property that makes you say, you know what this is going to work?
Mike Sjogren 16:15
Yeah, I looked, I leaned on them a little bit more in the beginning, now I’ve built my own spreadsheet where I can analyze a deal in like three minutes, but some rules of thumb that I heard from the beginning, where if you if the rent on the property was a 1500 a month, then it should bring in about three grand a month in revenue for it to be profitable for you. That was that was kind of the general rule of thumb that you should be able to double your gross revenue. And then, you know, after the additional expenses of utilities and linens and cleanings and everything else, you should be able to generate anywhere from 500 to 1000 bucks on on that type of a property that that formula works. But just like any rule of thumb, you really got to get into the numbers. So that that’s generally a baseline that I tell folks, but then I say, you know, you really got to factor in what I like to do is I’ll take all the expenses, right? So between the mortgage, and I have three different models that we can talk about to help listeners get get started, but just say that you’re going to purchase this property, you’re going to have your mortgage, your insurance, all your different utilities, homeowners commercial liability policy, you’re going to have he supplies every month, you know, for a two bedroom, I budget about 120 bucks a month. All the different expenses, right? I go through I add all those expenses in and then I add in a profit. I’m like, Okay, well, how much do I actually want to make on this thing for for doing the work? Right? And, you know, typically it’s anywhere from 1000 to 1500. You take that total divided by 30 days, and that’s your average daily free. Okay. Where does that compare to in the market? Right now now? Like, is it feasible if I need to 50 at night? Is are my competitors getting anywhere near that? And what is the occupancy rate that I could expect to get? Right? So that’s just general rule of thumb, like, all right, start with the expenses first, what does it my breakeven? What do I need to rent it for? For How often? Excuse me, and then tack on the Prophet? Right. So that’s kind of like my high level overview of like, rules of thumb. But again, just like any, any niche, they’re good for a quick look, but you really got to do your homework and know what you’re looking at.
Neil Henderson 18:34
And then are you are you factoring in an expected occupancy rate? You know, I mean, you you sort of saying, All right, I think we’re going to be fit, you know, will be at least 50%, occupied, you know, yeah,
Mike Sjogren 18:49
yes. So there is a great site. And folks that are interested, you’re going to want to write this down. It’s a website called air dna.co. And what that website does is it pulls all the data behind Airbnb and homeboy. And it basically pulls all the the revenue numbers, the occupancy numbers, all the properties that are listed on those platforms. And you can use that website, you can plug in an address, say, okay, it’s 100 Main Street, and smiley Ville, Maryland, or whatever, right? And it’s a two bed, two bath that could sleep six people. And it’ll spit out a number, it’ll say, Okay, here’s the top five or 10 comparative properties. And here’s what they did last year, here’s their average daily rate, here’s our total revenue, here’s our occupancy. So it gives you actual data from Airbnb and home away from the previous year. So that I find is a pretty good benchmark. Sometimes it can look a little skewed, I know for us the first year we we overshot their numbers by like 10,000. But sometimes you know it, I always like to play conservative, right, I’d rather overshoot it then under shoot it so. But that’s the best data points that I can come across at this point in the game, because it’s still a pretty early niche market. So
Neil Henderson 20:14
you know, one of the issues that that a lot of short term rental people are running across right now is the regulatory landscape. here in Las Vegas, it’s almost impossible to do short term rentals anymore, they keep changing, they change the rules, almost once a year. You know, it’s allowed in, it’s sort of allowed in one city, but the county doesn’t allow it and then you’ve got constant, you got to always watch out for an HOA that may have its own rules. And so did you, is there any way that you are able to sort of research and find out, you know, when you’re looking at a particular property, whether or not it’s going to be even allowed?
Mike Sjogren 20:57
Yeah, for sure. And what I what I tell my students and folks that are asking for advice is I avoid any major, any major Metro, right, so I’m just outside of Boston, I do not have properties in Boston, I would not do anything in New York City, I would not do anything in Miami, San Francisco, any major Metro, especially those metros that have ridiculously high rents, or an affordable lack of affordable housing, there will be regulation heavily in those markets, just my prediction because you’re they look at us as taking inventory off the street, and they need that inventory for people that are going to live there permanently. So what I like to do is I go, you know, 30 minutes to an hour outside of those cities, if I want to be near that Metro, and I find a place that is within walking distance to a train that could take me into Boston within half an hour. Right. So that’s, that’s kind of my approach. And then what you want to do is Google, our friend, Google, just google short term, rental or insert your city name. And the best, the best way to do it is to just find your local city or Towns website, and search for short term rental on that website and see if anything pops up. And then if you’re still not sure, and you really want to be super, super cautious, just call up the town, right? You can talk to the zoning board, or the city planner or something like any any one of those, you know, if you’re really worried. And I would just call them. But what I found is, I’m seeing the most most common restrictions, I’m seeing our owner occupied. So I have about four rentals. And I’ll talk through that strategy in a bit outside of Boston, where they are in multifamily buildings, two families and three families. So the owner lives in one unit, and then we rent out the other one or two units. So that’s that’s one way that I would say that’s probably the least risky. And then I also find like where my Shelly is, that’s just a vacation town. Like they’re not changing the rules. I mean, their whole economy is tourism. So that’s not going anywhere. You do always want to be careful of he always right, so I am in an HOA, but I am on the board of the HOA. So you know, you want to make sure that you wherever you are, that you at least have a voice and you know the direction of where they stand because there are some folks in my community that are quote unquote, old timers that have been there before this whole b&b boom. And they, they quite frankly, hate what I’m doing. But it is what it is, right. So the beauty of this strategy, though, that I love is I I get a vacation home that I get to use, we go up at least once a month, and it still pays us every month. So whether you want to do it from a pure real estate investing strategy, you know, increase your cash flow on a on a multifamily, or you just want to get a vacation house that will pay you every month. The strategy works all around, which is great. So
Brittany Henderson 24:05
yeah, the vacation area of strategy works really well for everywhere else except for Vegas. Yeah. We have all the hotels, though. Yeah.
Neil Henderson 24:16
Um, so you, when you started out you, how did you go about getting yourself educated? You mentioned a mastermind that you were involved with? Was it’s a specific short term rental mastermind.
Mike Sjogren 24:32
No, it’s it’s an offshoot, it’s called em one. So it’s an offshoot of abundance, if you’ve heard of that on like some of the other podcasts. So it’s a, it’s a pretty cool mastermind, we we focused on becoming whole life millionaires where, obviously you have your financial pillar, but then you’ve got your family and relationships, your health, your contribution, all those different things, right. Because if you have one without the others, it doesn’t really matter. Quite frankly, my story alluded to earlier. So from that mastermind, I met someone that was in the short term rental space. And he had a program that I went through, and then he was using a bit of a different strategy than I use. So I kind of took some pieces. And then I went on, and did some research and like art, well, who else has programs and I took literally like five or six different programs, because I’m like, I just, I want to soak it all in and then just blend it all together, and figure out what works for me. So like I say, I anytime I get into a new business or new investment strategy, I just try and get as educated as possible. You can Google it, there’s books, there’s YouTube, there’s courses, whatever your budget is, whatever your commitment level is, like, however serious you are, highly, highly recommend, just get educated. Because it’s going to save you in the long run for sure.
Brittany Henderson 25:48
How long did it take before? You know, you made that decision? And then you got yourself educated? How long did you spend doing that?
Mike Sjogren 25:55
about? About five months? Before before we close? I it was either July or August, and then we closed in January, so about five or six months, where I was just absorbing, absorbing, absorbing, absorbing, and then it was finally like, Okay, time to move or get off the bought as they say so
Neil Henderson 26:15
yeah, yeah. Do you have a figure for what you think you spent on on education there? Before you moved? You said you had four or five?
Mike Sjogren 26:26
I would say probably five grand?
Neil Henderson 26:29
If you didn’t go for the giant, you know, you’re
Mike Sjogren 26:31
not that was no $50,000 mastermind or anything like that. That doesn’t exist yet.
Brittany Henderson 26:37
Yeah, gotcha. Not for this space. Gotcha.
Mike Sjogren 26:39
Neil Henderson 26:40
before we move on, I want to get this out there before we go too much further, if people want to contact you, what would be the best way for them to reach out to you?
Mike Sjogren 26:50
Yeah, for sure. So on Instagram, I am at the Airbnb guy on Facebook, I’m at Michael sugar, no one. And I have a free class that I offer up. So I do have a trend training program. Full disclosure, it’s a full on training program for folks that want to get into this. But I have a free 60 minute course that I go through my three secrets, basically the systems that you’re going to need if you want to automate this business, and I show you the exact tools that I use, so you can go to str secrets calm. And that’s just a free class you can sign up for. Okay, awesome.
Neil Henderson 27:21
Um, did you have a question? No. Okay. All right. So, um, that first, the first property you bought you bought as a as a traditional buy and hold property. I mean, you bought it with the idea of putting it is short term rental, but you bought it with much more traditional financing, things like that. And you’ve mentioned that you have a couple of other strategies used to acquire properties Now, can you kind of go through those?
Mike Sjogren 27:48
Yeah, for sure. So once once we get that first one up and running, I was like, This is amazing. It was doing just like he told me, you know, pumping out about 1000 bucks a month, which is amazing. But I personally can’t live off with $1,000 a month. So I was still a ways away. net. If we do the math, right, it takes me about 65 months to come up with another down payment. So I’m like, Okay, how do I expand and so a lot of folks will use a leasing model, right, lease arbitrage will, they’ll go out and they’ll rent a property from a landlord, they’ll furnish it, and then they’ll put it on Airbnb or home way and make money that way. Which you can totally do, right? I would always just encourage folks, if you’re going to do that model, just be transparent with the landlord, don’t do anything shady, right? I always tell folks, you know, operate with integrity, otherwise, you’re not going to be operating for very long. So that strategy works great. But I didn’t have another 10 grand to furnish another property plus, say another three to four grand for first last and security deposit. So I didn’t have 15 grand to get another one going. So I said all right, well, what if I found landlords that had vacancies and I showed him this business model, showed him the data from air DNA, and I said, Hey, mister landlord, your property rents out for, say, two grand a month is a 12 month lease. If you furnish it, and I manage it for you, what if I could make you 2500 a month and you don’t have to do anything else. And so came this idea of becoming are building out a short term rental, call it management or co hosting business. And that’s how I started to grow very quickly, from one unit to six units. And now we’ve got a bunch more in the works that are starting to snowball. So that has worked out very well for us. And it’s a win win all around. Because like I mentioned, I can never guarantee anything. And I just say listen, here’s the numbers, here’s what I’ve been able to do. Here’s the the data from last year from Airbnb and homeboy, from your address, this is what they’re confident that that it could bring in. So if you invested, you know, eight to 10,000, to furnish this, this is what you could expect to earn. So you get your investment back within, call it 15 to 18 months, then you’ve just increased your revenue by 25%. Forever, if you continue with this model. So I did a lot of outreach, networked with a lot of folks started a local meetup started putting out a lot of content on social media. I heard a lot of no’s. And folks were scared, right? They’re like, well, I don’t I don’t, I want to know who’s in my property. And that’s one of the things I cover on my course. Because there’s a system that I have now that i i get over that hump, and I show them how we keep our eyes on the property. But after a while, you know, I got a couple folks are like home. But that sounds interesting, you know, I want to learn more. So after a while, like I said, I just kept calling and putting out content and just peaking interest. And then now, you know, it’s much easier now, obviously, because I have more and more case studies and multiple properties that I can show data from in three different markets. And I’m like, okay, like, whatever your market is, you know, we can work with it. So that that’s how we got rolling. So it’s basically more of a management company model. But the beauty is, with a typical management company, you’re charging, you know, 10% for a small multifamily. And maybe you make, you know, 100 or 200 bucks a month, it’s, it’s takes a lot of properties to add up for that, you know what I mean? So, in this model, we charge anywhere from, you know, 15 to 25%, depending on how hands on the owner is or how hands off the owner is I should say. So if we come in and we build out the entire unit, we take care of all the restocking the cleanings, the bookings, the communication, everything, we charge 25% if the owners manage their own supplies, and take some of that load off of us, you know, we’ll do anywhere from 15 to 20%, depending on the size of the deal. And what we found is in the slow seasons will average about four to 500 per property and then in the high seasons will average anywhere from 1000 to 2000 per property. So it’s to you, to me, just to you. So just your your percentage of that is is cash flowing for minimum 400 a month. Yes, that’s great. And it’s a win for the owners too, because their rent might go from 2000 to 3000. Right? In some of those higher months or 3000 or 4000. So,
Neil Henderson 32:18
yeah. Now is that has that been how you’ve expanded? You’ve only you’re only owning the one? The one chalet yourself? Is that correct?
Mike Sjogren 32:30
Yes. And right now we’re working on excuse me, right now, one of the owners that I currently work with, we’re partnering on a larger resort style community that we’re currently in the prelim stages of the LOY with the owner on so that that will snowball fast as you show owners that you get results. They’re like, All right, here’s more money, go find me more deals, right, just like in any business. So.
Neil Henderson 32:58
And what is that a? That’s a multi, is it a multifamily? Or just a larger a larger luxury, more of like a luxury property?
Mike Sjogren 33:08
It’s pretty much a resort. It’s a large like community.
Neil Henderson 33:13
Okay. Wow. So you’re going all in?
Brittany Henderson 33:16
You’re buying entire resort? Or Yes. into God go? Oh, yes. Awesome.
Neil Henderson 33:23
Fall? Yeah. Okay.
Brittany Henderson 33:26
Sorry. Alright, so what does it a day in the life look like for you, as this like, vacation rental manager?
Mike Sjogren 33:38
Sure. So the the beauty with this businesses, there’s a lot of tools you can use. So a lot of folks don’t believe me, but I literally manage this business in less than two hours a week, I still have a full time job. And most people don’t even know that. I still work. I don’t have to, which is nice. But I do. Because the longer I do that, the more I can double down on this business. But yeah, this business can operate in about two hours a week. So there’s one of the things I talked about in the training, there’s systems that you need in any business, right? Otherwise, you’re going to always be trading your time for money. So I use I have a system for pricing, I have a system for guest communications, I have a system for access, right. So I don’t use physical keys, I have Wi Fi locks that automatically generate you codes for guests and automatically expire. And I don’t have to deal with any of that. I have a system for for turnovers. So my cleaners automatically get notified. They know to check in through this app that I use and it they’ll send photos through the app, they’ll let me know when they get there, when they check out. They’ll just go in and accept the booking so I don’t have to follow up with them. So everything is pretty much automated. The only piece that I still do is one look for more detail. And then to is just answer guests one off questions as they come in most of my messages 95% are automated, but if they throw an oddball question out there, I do answer that, but I am in the process of training a virtual assistant to kind of document all of those one off questions so that we’re building a repository. So over time, I’ll be less and less involved in this in the day to day, per cetera.
Neil Henderson 35:25
Gotcha. Alright, so you’re going to have to I know what I know what one of the systems is, you’re gonna have to you’re gonna have to guess here.
Mike Sjogren 35:32
I was building I was building suspense.
Neil Henderson 35:34
Yes, I know. But I can hear my guests right now going What?
Brittany Henderson 35:40
We ourselves started using turnover b&b, which assuming is probably what you’re using us? Yeah.
Mike Sjogren 35:46
Magical. A couple notifications.
Brittany Henderson 35:49
Yeah, it took so much stress off of us. And like the cleaners actually are way more efficient than even the ones that were using before. Who was the original one they used I love she was like a friend of a friend or like the cleaner girlfriend. And she became my friend because I was like, at home with my tiny baby. And we would talk and I loved her. But you know, she started subcontracting out and it just never like it was never perfect. And now like, it’s like two girls, and they’re in and out of there. And, like shiny.
Neil Henderson 36:21
Yeah, they literally, they literally, it takes them probably there’s two of them, and it probably takes them 20 minutes to clean it, we get the notification we can start. It’s only 300 square feet. So literally they start and 20 minutes later, they send us pictures of it being done. Wow. And so and it’s the and they charge, it’s very small. And they charge us the same basically the same that we were charging, you know, we were getting from the other cleaners as well. So the only difference is we may start having them do laundry because that’s honestly our biggest, the biggest challenge that we run into is that is that we have to do we still have to do the laundry,
Brittany Henderson 36:56
especially if we’re gone. Oh, they’ll do on occasion. They’ll do it.
Mike Sjogren 36:59
Yeah, my cloud, all my cleaners do the laundry. So that’s another tip for for folks, if you’re looking at property, I will not get a property if it does not have a washer and dryer in it. I just won’t because it makes it’s too much of a pain in the butt. Unless I get you know, our shadow side when I get the resort. That’s different because you have economies of scale to have linen service or something like that. So it’s a little different. But if you have one or two properties, it’s not cost effective to have a linen service. It’s much easier to just have your cleaners wash it while they’re there.
Neil Henderson 37:29
Yeah, yeah. Well, the issue we have with that with our small unit is there is no, there’s not washer and dryer out there. It’s in our main house,
we have to come into the house.
Neil Henderson 37:39
The problem is they can’t if they sit here and do the laundry. Yeah. We’ll figure it out. Anyway, so all right, so we got turnover BMB out of the way. And I know what the other ones are, as well.
calls for us.
Mike Sjogren 37:53
Yeah, so for pricing software, there’s there’s a bunch out there, quite frankly, the one that I use is called price labs. There’s wheelhouse Bryce labs, some bunch of them. But basically, the whole premises is, if you if any one human being tried to, you know, pull in all of the local calendars of Hey, this events happening over here on this day, you know, there’s a food truck festival and occupancy rates in the area or this for this, like you couldn’t possibly process all that information. So the whole idea of using the software’s is to maximize your revenue and maximize your occupancy. And you can use different strategies, whether you’d rather have it be completely full. Or if you’d rather, you know, be okay with having a few days empty, but you want really want a premium for your property. So you can kind of set the strategy that way. So that takes a ton of time off of my plate. And then I still on Monday mornings, I still review my occupancy for the month for each property. And I’ll go in and manually tweak it. Just because that’s any revenue generating activities worth my time, I’ll just put that way. So the pricing is definitely something that deserves attention.
Brittany Henderson 39:04
more robust than like the, because because Airbnb has a native sort of prelude
Mike Sjogren 39:10
to it. Okay. Be if you think of what is Airbnb is motivation. Yeah, they as host, they charge us 3%. And they charge the guests and anywhere from 10 to 12. So if they, they want to get as many bookings as possible, so they want your price to be as low as possible. Right? So for them, I found that, you know, price labs might say that my property should be 180. And Airbnb is telling me 120 Oh, you’re leaving a lot of money on the table if you use smart pricing.
Brittany Henderson 39:46
Awesome. Sorry. I mean to interrupt you, but
Mike Sjogren 39:49
no, no, that was a good question. Because I know I had that question. I’m like, Oh, well, why do I need to pay for that? Airbnb has one and they’re like, yeah, don’t use that.
Neil Henderson 39:59
And then what is the what is price labs cost? Do you recall
Mike Sjogren 40:03
it? It’s based on like a waterfall. So I think the first property is like 20 bucks. And then it kind of goes down over time based on the number of properties you have. So it’s all tiered.
Neil Henderson 40:15
All right, access.
Mike Sjogren 40:18
Access, I use, I use August locks. So you can get those on Amazon, you can get them at Best Buy. They’re fantastic. In the that video is talking about in that mini course, or whatever I show you kind of screenshots of like how I use that, because it’ll show you it’ll automatically set up everybody’s access, then I can monitor who’s in and out of the property, I can monitor the activity, somebody left the door open one time, and I could tell from you know, three hours away, right like Boston, I’m three hours away from my property in New Hampshire. And I’m pretty soon I’ll be getting one in Florida too. So I need to have eyes on that property all the time. And this is just one of the tools that I use. And then the biggest, biggest time saver will be smart b&b. So what smart b&b is, is, it is a messaging tool. Along with some amazing data behind it, like I I create all my own reports through smart b&b because I can create custom metric dashboards and everything else per property. But you can customize and make. So as an example, right, somebody books your property, you want to send out a confirmation note. So you can put in these codes, I use the same template, but it pulls like, Oh, this is 100 mainstream, this is blah, blah, blah. And it’ll send it out for each guest. As soon as they confirm, then I want to make sure that they know the address, the parking instructions, the house manual, everything that’ll go out automatically three days before they get there, then I send the checkout instructions, then it automatically follows up for reviews. If you haven’t left me a review. It uses artificial intelligence, which is so I can I can set it up. So it’ll detect, oh, this is a question about the swimming pool. Oh, you have a question about the pool. Here’s all the information about the pool from the house manual. And I will send them information about like the pool. So it that will cut down, especially as you scale. The messaging will kill you if you don’t have a system. Like I think when I had whatever it was a couple months ago, I was looking at the analytics and it was like there’s over there’s between like two and 3000 messages that I get per month. Just on my at the time, it was like four or five properties. So like you get hammered with messaging if you don’t have the right systems in place.
Brittany Henderson 42:39
Are those messages? Are they going through the app? Or is there some email?
Mike Sjogren 42:44
It’ll do both. So smart b&b, they don’t have an app. They have a website, but it’s sending the message through Airbnb platform. Okay,
Brittany Henderson 42:53
yeah. Because I find that like, I assume the Airbnb, I think they send out an email to people, but like 90% of the time people like how do we get in, and I’m like, you should have all of this information somewhere way. So this would probably make it a lot more efficient, cuz we end up having to, you know, we only have the one property, so it’s not as big of a deal. But we have a safe message that we probably send to every other customer.
Neil Henderson 43:20
Yeah, when they just go now how do we get into the unit? And like, you know, and we have, we have self check in set up on Airbnb, we have checking instructions in there, and people just don’t see it.
Mike Sjogren 43:32
Yeah, and what I find is people don’t like to read, quite frankly. However, I’ll send the PDF version of the house manual. So I have like photos of everything with arrows like park here, walk over here, right? Like literally spell it out. Like it sounds silly. But I’m telling you, I got tired of answering these questions. I’m like, All right, I’m just going to make this so like, a two year old could follow it. Especially, you know, for everything from Oh, where’s the where’s the pillow couch? I don’t know, probably the couch that’s in the living room is probably the pullout if there’s a pillow couch. And I mean, just like silly questions like that. But like, you know, you really got to spell it out. Especially, I know, I get a quite a bit of foreign travelers. So for them, you know, I just had one two weeks ago from China, she can’t really, she called me and I’m trying to walk her through it. But the language barrier was tough. So by having like a physical copy with photos, I can like point like, here, right. So like spell it out and like in very, very clear detail. And I do the same thing with my cleaning manual. Because as you add properties, you want to have a consistent look for your property. So I might have 234, or five cleaners for the same unit. I want it to look the same every time. So a lot of people have a checklist. I have a manual that shows pictures of everything where I want everything to go and how I wanted to look every single time to create that consistency.
Neil Henderson 45:00
On the access, I’ve heard you, you get a great tip that I’ve heard before on the locks, which is don’t just rely on the Wi Fi locks. They’re magical, but don’t like have a backup.
Mike Sjogren 45:13
Yes. And so the conversation I was just talking about was because another tip that I learned the hard way is you can have all these fancy deadbolt locks. But if you still have an old school doorknob that you can lock from the inside the deadbolt doesn’t matter. So guess lock themselves out. So if you have a deadbolt lock, change the doorknob, so you can’t lock it from the inside. Right? You don’t want a doorknob that locks on your exterior door. So yeah, I always have a backup physical key and a lockbox hidden somewhere outside the property, just in case, you know you lose power, you lose Wi Fi, the batteries die on the locks, whatever. I don’t want to have to drive three hours to go let somebody in. Or quite frankly, I don’t want to drive 10 minutes, let somebody in if I can just hide a lot lockbox somewhere outside the property. And I only tell them where that is if there’s an issue. Because again, I don’t like dealing with physical keys. Just from a safety standpoint, if you get somebody in there, and they go and make a duplicate of your key somebody has access to your property forever. So I don’t really like doing that. It’s, it’s like my last resort. But I would definitely recommend doing it if you need to. That’s a great tip though.
Neil Henderson 46:26
Alright, so we covered pricing, access, turnover, communication. So are there any other team members or systems that you use to manage your day to day operations.
Mike Sjogren 46:41
I’m hiring, like I mentioned, I’ve gone through a couple different virtual assistants for this business. I’m a bookkeeper unless you want to do it yourself. That’s pretty much it. I mean, it as you as you guys know, I mean, it’s, it sounds like there’s a lot of moving parts. But once you start doing it, it’s really not, especially if you have the right systems in place. Like I said, the biggest to the access, communication, pricing, and cleanings. So I always tell folks, never ever, I don’t if if you’re listening to me, and I give you any advice, do not clean your own properties. Because it’s not worth your time I can pay somebody, you know, somebody that’s looking to make some money, I’m more than happy to pay them a fair wage to do it. My time is best spent looking for more deals and tweaking pricing. If I’m going to save 60 bucks on cleaning a property that takes me an hour, two hours to clean, that is not a good use of my time. Right? If you’re trying to get to, to freedom to financial freedom, you cannot be trading your time for 60 bucks, it’s not possible,
Brittany Henderson 47:51
when you can put that back on the guest with a cleaning fee, or at least part Exactly. So hundred percent, there’s no reason not to have someone else do it. We learned that Yeah, pretty quickly. Because, again, I had an infant
Neil Henderson 48:06
well, and we were able to do it early on, were able to do it because it literally it was literally out our front door. And, you know we that one of the models of of Airbnb, is you can you know, you can rent a whole house, you can rent just a room and a place, we are actually very, very lucky. Because that’s essentially we’re able to offer a whole technology an entire place. It’s an entirely separate entrance half the time we never see them, we never interact with them unless they really want to. Most of them don’t. You know, but it’s it’s literally out our front door. And early on, you know, she was a stay at home mom, and she was able to do it. But even that it gets, you know, you’ll have a last minute booking where you thought you were, you know, you thought you didn’t have a booking and then all of a sudden, that night somebody has booked and you haven’t cleaned it. And yes, one of us will be of Sorry, I’m been hitting the thing. Sorry. You know, one of us will, you know, would have to rush home. You know, she would be somewhere I’d be at work. And I’d have to I’d have to rush home and clean it. So yes, I agree if this is one thing that an aspiring short term rental person takes away from this entire thing is don’t clean your own property.
Mike Sjogren 49:26
And that’s a that’s actually a non negotiable for me now to when I’m hiring cleaners, property gets cleaned immediately after checkout. I don’t care if I have a booking that day or not. Because I will get a last minute booking. Yeah, I will I’ll drop the price till it fills. And that was the pushback I got from some of my previous cleaners. And then I had to just let them go. Because I’m like, you’re costing me money.
Brittany Henderson 49:48
Yeah, yeah. Where the where the same way? If you know if. Yeah, and and that’s what’s nice is that would that turnover, Airbnb, if the main cleaner can’t do it, for some reason you have have those, like backup cleaners that can do it. So it makes it really easy. Um, how much maintenance? Do these prob I mean, you you’re managing? So what does the maintenance look like, on these properties? It’s, it depends on just like anything, right? It depends on the age of the property. So for
Mike Sjogren 50:20
the properties that I manage, I make it clear that I am not the handyman. So if a repair needs to be made, I will either use your guy or girl, or I’ll go hire somebody else. But I am not going and fixing plumbing and doing like that is not what my role is. So the the properties that I have, like, for the properties that I own, I have a bunch of contractors that I’ve just kind of networked with over the years, and I have different resources that I use to find new ones if I need them. But for my owners, they all have their own contractors that I use for their properties. So I typically recommend, you know, you need to have at least like a general handyman who has contacts that you’re going to trust. But I do not do the physical labor. Again, I recommend if if you’re building it as a business, don’t be the guy, you know, fixing the plumbing, right? Like I had a leaky tub last week. I’m like, Okay, I’m going to charge it back to the owner, this is his property, I’m not the handyman, so I’ll go find somebody, but they’re paying for it. My only role is to generate revenue for them and operate a short term rental business, not a handyman business.
Brittany Henderson 51:34
And that’s how I think normal. Like if if you are managing like an apartment in LA, not an apartment community, but like a long term rental of a single family home, I’m sure that management companies probably do the same. And you probably work that into your contracts. I assume you have contracts with these people?
Mike Sjogren 51:53
Yes, I do. Yes.
Neil Henderson 51:55
Well, in, you know, one of the big complaints with singtel family homes is long term rental is that you cash flow so slim, that the moment you have a turnover, most of that cash flow is gone. If the just wasn’t basic wear and tear nevermind, tenant, you know, who trashed the place, you know, you’re making 100 $200 a month, over two years, you know, as you’re making your cash flows, 1200 and 20 $400. You know, during that year during that period, and somebody moves out, you know, you got a four or five grand turnover bill. So can you talk briefly, you know, about the differences, you know, one, you’ve got extra cash flow, but also the problems being cleaned, you know, once or twice a week at least.
Mike Sjogren 52:44
Yeah. So that’s, that’s a huge misconception that my property is going to get trashed, right, so I’ll leave a hook in there that they can, they can watch the rest of the train to show I’ll go through my whole system. But the reason why it doesn’t even aside from my system, right? is think of the last time you traveled anywhere, whether you stayed in an Airbnb or hotel, whatever, how often were you actually in the property. Like you were there probably from like, 9pm to 9am, you went somewhere to go see something, you went there to see a city you went there to go to a show go skiing, do something, you’re not there to camp out in a property for a week, that’s just not why you’re going there. Right. And then on top of that, what he was getting to was okay, then how many of your tenants actually hire a professional cleaning company to decline and sanitize your property, ever, I’ve never heard of a tenant doing that, right? We have somebody in there, a team in there multiple times a week, right? You’re, they’re not using your appliances, I find that maybe 20, probably 15% of the time that guests actually use this stuff, like they want have it, but they most of them, they don’t even use it. They’re really not using the dishwasher. They’re really not using the washer and dryer, the only thing going through there is like my towels and my sheets like that they’re not using them. You know, maybe they’re taking a longer shower than normal, but they’re gonna run on hot water eventually, right, I got a hot water tank. So it, there’s there’s a lot less wear and tear on the property. You know, I’ll get little scuffs and stuff from kids run around. But I don’t mind that. I mean, that’s just easy touch up once a year, a little paint here and there. But it’s nothing, nothing crazy. And I will say, if, when you’re launching a property, just don’t put anything that you really care about in the property, like any personal artifacts, that you’d be devastated if it broke, because stuff breaks, right, like I’ve had alarm clocks break, I’ve had little decor fall and break like stuff is going to break. So if something, if you have a personal connection to some artifact, don’t put in the property, just don’t, and then you won’t have to worry about it. But you know, if somebody is going to pay me 500 bucks for a weekend and they break an alarm clock, I’ll go to Target and buy $20 worth of alarm clocks, it’s not going to bother me, you know, I don’t sweat the small stuff.
Brittany Henderson 55:10
And you also got like the the extra backup, like Airbnb has some insurance, that’s part of it. And then also, generally speaking, most people want to continue to use Airbnb. And if you have a shitty, like referral on there from an owner, then you’re less likely to be able to book other ones. So there’s a lot of things in place there that really protect you, that doesn’t happen with a long term rental, because with long term rentals, there’s no way to know that you trashed some house previously. So you know, there’s there’s really a lot of protections in place there. On top of just the lack of wear and tear that you get, because no one uses half of what’s there. It’s awesome. Exactly.
Mike Sjogren 56:00
Brittany Henderson 56:01
Um, what are your thoughts? So, you know, you said you’re doing a lot of like, you’ve got some multifamily homes were buildings where there’s, you know, some units that are being rented short term. You know, you I don’t know if you have any single family homes, but do you find there’s a fear of like party houses? Or, you know, that’s something that gets talked a lot about here in Vegas is part of why they sort of shut it down completely, because you would have, you know, giant amount of, like, frat boys coming and hanging out in a, you know, seven bedroom, mini mansion. And then the neighbors are not happy.
Mike Sjogren 56:39
Right? Yeah, for sure. And there’s different ways, I mean, all of my properties, all of my properties have security cameras on the outside. So that is a non negotiable. Because to that point, and they also have noise detection devices inside the property. So quiet hours, and all my properties are 10pm 8am. If at 1001, they’re making a bunch of noise, I get a text message immediately, because I my software, my sensors in the property are saying, Hey, there, their noise levels are exceeding a certain decibel level. And I’ll get a notification. So I’ll know if something’s up immediately. As far as the types of property that I look for, I will not do any more one bedrooms. So my sweet spot is like two to three bedrooms. Because again, it depends on who you want to target, right? Like I’m pretty clear on on the profile, ideal, you know, avatar that I’m targeting. And that two to three bedroom is perfect for whether it’s a traveling professional, or whether it’s a family, or whether it’s couples, like it can kind of cater, you know, I get some traveling nurses that are coming in, you know, if you’re near hospital, things like that it’s a good sized property that can justify a higher price point. They’re getting a two to three bedroom, they’d have to probably get through three to four hotel rooms for the same equivalent sleeping space. Right, a three bedroom I could sleep 10 people no problem, no problem, just by configuring it a certain way. So if you need to sleep 10 people in a hotel room, you need at least two to three bedrooms. If you keep it on the hush in there, you know what I mean? So they’re already expecting they’re splitting it two to three ways already. And they’re getting a lot more real estate for that price point. So I find the one bedrooms, they typically like to haggle on price and I’m just I get tired of I’m like you either want it or you don’t like you’re getting up, you know, thousand square foot apartment versus a 300 square foot bed and shower. I don’t know if you know what I mean. But I find that they typically like to haggle more. So
Neil Henderson 58:47
what’s the beauty of particular brand of security camera out front that you like? And what’s the noise detection?
Mike Sjogren 58:55
Yeah, I like I like the ring cameras. Personally, because they have a solution script model that’s very inexpensive. I think it’s like, I don’t know, 10 bucks for the year or something crazy. And they’ll record video and keep it like in the cloud for, I don’t know, a month or two months or whatever if you need to get access to the footage. And then for noise detection software, it’s company called noise aware. It’s a very, very cool product. And now I’m sure there’ll be more iterations and I’m I’m hearing some some rumblings about this new smoking detection device, which I’m definitely interested in. Because that’s one of the hardest things to prove. is whether or not they smoked inside. You can tell when you are gang cuz it’ll stink, but get physical evidence is very difficult. So with this device, I’m I’m excited to learn more about it.
Brittany Henderson 59:48
Do you want to go to location? Yeah. So you you manage properties that are not in the place where you live? How far out do you go.
Mike Sjogren 1:00:00
So the New Hampshire properties about three hours away and getting one in Florida. That’ll be a four hour flight away. So I mean, once you have the systems dialed in, and you you know who you need on the team and how to build the team and the tools, you can literally do it anywhere. Our most Expedia
Brittany Henderson 1:00:19
that you have right now that you manage in sort of near you.
Mike Sjogren 1:00:25
Two of them are in New Hampshire, which is three hours away, and then four of them are about 40 minutes away from my house. So it’s a good test. I mean, the first one I got was in New Hampshire. So like, it forced me to create systems, because if something broke, I can’t just go fix it. Right, like it’s too far away. So once I once I got the systems dialed in, like we went to Florida for a little over a week, a couple weeks ago, all my systems work fine. You know, I’m, I’m a four hour flight away and everything works fine. So yeah,
Brittany Henderson 1:00:56
yeah. So you really could like especially once you have those VA sort of in place, you could go on a trip in another place in the world and and have it run if there’s a you know, that’s the only hard part about traveling to different. Very different timezone. Extreme timezone is that, you know, you could miss some things that might be important. But if you’ve got those virtual assistants in place, and that team in place, you know, I assume that you could really do that from anywhere.
Mike Sjogren 1:01:23
Yeah, I mean, once you have that, once I have that team in place is really not much need for me, quite frankly.
Neil Henderson 1:01:30
Yeah, I’m just tweaking some pricing. So and maybe find, you know, may have you again, you know, finding new deals. Yeah, exactly. That’s not something to do while you’re on vacation. So, I guess, you know, my, we always ask whether or not you could do this from anywhere in the world. But one of my new questions is, do you think you could do this from a cruise ship on the other side of the world?
Mike Sjogren 1:01:52
So if I did not have internet access is what you’re saying?
Neil Henderson 1:01:56
Yes. Yeah, pretty much limited. I mean, you’d have to some internet access, you might have an import, but you’re going to be out of touch for you know, 12 hours at a time at least.
Mike Sjogren 1:02:08
Once I have my VA going, definitely. Yeah, for sure.
Neil Henderson 1:02:12
But you’re going to have to have you’re gonna you would need you still need some, some human in the loop at some point.
Brittany Henderson 1:02:18
Like boots on the ground?
Mike Sjogren 1:02:20
Yeah, just like any just like any business, right? I mean, unless I can’t think of any business at this point that doesn’t rely on some form of human but that’s what that’s the that’s the epiphany that I had when I was building a side hustle versus building a business. If I stopped working in the side hustle, I wasn’t making money. But stop working in the business. I should still make money. Yeah, that’s freedom.
Neil Henderson 1:02:42
So have you ever explored using a service like gusty? Are you familiar with Jesse at all?
Mike Sjogren 1:02:48
Yeah. So smart. b&b is like Jesse and way less expensive? Yeah. So when you scale, right, like our revenue is in well into the six figures. Guess it takes 3% of that? Wow. I mean, I could, I could three to five if you use their VS. So, you know, I can pay a VA overseas, you know, a few hundred bucks a month to do the job that they’re going to charge 10s of thousands of dollars for, right. So for me, at this point in my business, I’m not using them. I’m always open to change stuff for shorter.
Neil Henderson 1:03:19
So I guess the only the one thing that guests he has that that interests me is the 24 hour phone number. You know that, you know, a guest could call you know, although, you know, most the time I mean, Airbnb has that as well. You know, they have a guest resolution line that they can call them. So.
Brittany Henderson 1:03:39
I mean, like, how often does that happen to where you need to spend?
Mike Sjogren 1:03:45
Ironically, I just had one. Yeah. Sorry, I just had a call come in. Um, ironically, I just had somebody locked themselves out a week ago, and they called me like midnight. But other than that, I don’t think I’ve that was the first time that I’ve had somebody like, they needed somebody, like immediately because they wouldn’t get into the property. And the worst case I sleep in the car, but obviously, that’s not the best guest experience. But we thought they locked themselves out. So
Neil Henderson 1:04:15
yeah, we’ve had one incident where the guests just did not. We had just moved to Airbnb self checking system. And we were under the impression that it was they were getting an email and how to check in. And, and they did not. They just
Brittany Henderson 1:04:35
I’m sure they got an email that
Neil Henderson 1:04:37
they just did not see any of it. And they we were I think sound asleep. We didn’t they and they didn’t knock on the door, you know, and they ended up, they ended up staying in a hotel right down the road. And, you know, that was probably the worst. That’s probably the worst moment we’ve had. And we ended up you know, we paid for the hotel. It was like, whatever is all it was technically our fault. You know, but you can usually make good. That’s that, you know, and you’re usually making enough money that it’s not going to kill you to basically have the guests go away happy if they’re reasonable.
Mike Sjogren 1:05:13
Yeah, you know, for sure. I mean, I’ve had it a couple times where, for whatever reason, the cleaners didn’t show up. And the system it was before I got on turnover b&b. So I just I send the guests 200 bucks. I’m like, go get dinner on me. I’ll have it done. But let me get back. Right. So you know, you just got to do what you gotta do sometimes. Yeah, yeah.
Brittany Henderson 1:05:36
do you have any last question? Don’t? Do you have anything else that you feel like is important that we haven’t covered? Like we’ve,
Mike Sjogren 1:05:43
um, I think we’ve we’ve covered quite a bit of ground today. Yeah. Like I said, you know, if I put out like Neil mentioned, I put out a ton of free stuff on Instagram and Facebook. And I’ve got that free mini course that folks can take. So I try and just put out as much free stuff as I can. So but we went through a lot today. So yeah,
Brittany Henderson 1:06:01
thank you so much for your time. Yeah, really? It was a no problem. It was we I mean, I even I learned a lot of things just from it’s nice to talk to someone else because you get into your little bubble and then you don’t really think so?
Neil Henderson 1:06:15
Well, once again, if you want to reach out to Michael str secrets calm the air at the Airbnb guy on Instagram, and then on Facebook. Michael Shogun Michael Shogun Oh, one
Mike Sjogren 1:06:29
I’m probably going to change that to the to the Airbnb just to make it easier, but that’s what it is for now. Yeah.
Neil Henderson 1:06:35
All right. Again, Michael, thanks so much for your time. We look forward to meeting you in person someday.
Mike Sjogren 1:06:39
Yeah, absolutely. Thank you guys for having me. Alright, see you.
Neil Henderson 1:06:42
All right. Don’t leave. Don’t leave. Yes. Okay, that was Michael Shogun from str secrets calm. Also the Airbnb guy on Instagram. That was a fantastic interview was one of my favorite so far.
Brittany Henderson 1:07:04
Yeah, I really enjoyed talking to him. I think part of the reason to and is that we really have similar families. You know, after the interview with him, we even talked about this, we were talking about other people that might like to come on the podcast and other, you know, real estate people in our, our, you know, circle. And, and, you know, he was like, Well, you know, let’s look for people who, who have families. And we’re like, you know, we really haven’t actually interviewed a ton that have a similar family structure as we do. And that’s okay, we found ways to, you know, make it relevant relevant to, to the the people who we think hope that are listening to our podcast, but it was really nice to, like, have someone that’s actually in a very similar position in a lot of ways to us, and, and have some of the same, like, the same goals. And the same reasons for those goals was, it was just, it was fantastic. So
Neil Henderson 1:08:02
you come away with a key lesson learned?
Brittany Henderson 1:08:08
I think the system ization was probably the biggest one. You know, we’ve been talking about doing some more short term rentals for us, but it felt a little bit overwhelming, at least for me, it’s kind of trying to figure out how can we do that? Especially because we, we cannot do that in Las Vegas? Because of current regulations. So, you know, we would we would need to do that, possibly states away from us. And, you know, is that a possibility? And it sounds like yes, and what’s nice is that we can kind of learn from his experience. And, and skip the part where we really need to have local listings to learn from possibly and go straight to the other state or, you know, farther outside of Las Vegas if we want to.
Neil Henderson 1:08:56
For me, again, it was I agree with system ization. Your time is valuable, and so many people, what’s the expression they they step over dollars to pick up pennies? So many people, you know, they want to save money by doing everything themselves? And, you know, you’re the best value of your time is not, you know, in this case, not cleaning. Short term rental.
Brittany Henderson 1:09:25
Yeah, I mean, really, the, the best value you’re getting is your time, that’s that’s what you’re getting out of this, or, at least that’s what we feel like is is the best value for, you know, what most people are looking for? I guess, if you’re just looking to make the most cash flow, and you don’t care about time, then then maybe, but again, you can pay for it even half the guests pay for your cleaning. Unless you’re going to be really super, you know, you just want that extra 40 5060 bucks. Yeah, why it doesn’t, it doesn’t make sense to me. But
Neil Henderson 1:10:02
when the system ization works in your favor in two ways. One, it makes things easier on you. And to it makes it so that you can eventually hand that off to someone else. And remove yourself from the process and become the key decision maker, not the key dealer.
Brittany Henderson 1:10:24
The person Yeah, you’re not in the business. You’re, you’re not working on not in the business, not the Yeah. Yeah. So that makes that makes a lot of sense. And just yeah, it was just a it was a good takeaway, because it it really, I mean, we just got into sort of, systematized and automating some of these things ourselves, we talked about turnover, Airbnb, and that has been life changing in the last, I think we’ve only been using it for maybe a month. Yeah. And it took a little bit of time out of your day to like, be here the first couple of times to train the, you know, we’ve two different cleaning people, you know, we have a main person that that we feel like is the the best choice, and then we have a backup. And so it took a couple times to just make sure that they knew what they needed to do. And then you know, obviously, we’re going to be making that same kind of manual and that kind of thing for for them. But we’ve got a lot going on. So it just hasn’t happened. But that it’s it’s done. It’s easy. And it took a lot of stress off of us in a season that has a lot of stress in it. So, Alright, so let’s talk about, you know, our big pillars knowledge, time, money, and location independence what, you know, how did he acquire his knowledge and
Neil Henderson 1:11:50
he was in, he was in a mastermind, go abundance mastermind is our call and met a couple people who are doing this strategy in there or something like it. And then he said he started just taking courses. He said he took four or five courses and spent about $5,000. He thinks Yeah,
Brittany Henderson 1:12:09
yeah, he said $5,000. And about six months. He said five buttons. Okay. Yeah, I a month $5,000. To get up to speed. And Excuse me. What’s kind of nice is that now he’s sort of done this legwork, and you know, perfected this model. And he has that, that course, on on his website, which I don’t remember. CRC secrets, secrets, calm. There you go. But he has that course, which kind of could take out some of that time period for someone who wanted to get into this. So I feel like, you know, on the scale of what this worked for a family, it’s pretty high up there on, you know, the Yes, Mark. Yeah, I think so. Yeah.
Neil Henderson 1:12:59
So she has we we have experienced it firsthand what it takes to run a short term rental. It there is a lot of moving parts. It can be a lot of work in the beginning. But again, it’s just a matter of systematized it. And once you have your systems up and running it, it’s not completely passive. But it is it really comes down to how well you are systematized. Only I mean, he’s and he does less than two hours a week on I guess actually just let’s move on to time. Yeah. So well, money. Now let’s talk about how much money it took him to get, sir. Because it wasn’t just that $5,000 because they bought that first property. He said he pulled out. It took them about $65,000 to get up and running on that first property. Yeah. That he acquired for, you know, the basic cost them about $200,000 to buy and renovate, and then an additional 10,000 dollars to furnish it. Yeah. Because that is that is something you need to think about if you’re going to do this first strategy that he did, which is buy it yourself furnish it? and things like that. Yeah.
Brittany Henderson 1:14:12
But I think the main strategy that he’s using, is this.
The manager, man, Harvard manager.
Brittany Henderson 1:14:18
Yeah. So if you want to do that, you can really get away without having a ton of money invested. Besides, we didn’t ask him about this, but I assume that he pays for the noise detection problem video systems or, you know, because he said that he asked them if they want to, or he suggests that they pay for the furnishing, but I wonder if for those kinds of systems, if he puts those in, so that might be where you might spend money. And then also, if you’re going somewhere outside of that you need to travel to then you know, travel expenses and things to meet with those owners. So there’s probably some expenses, but you can really limit them with that model. So can we go back to time now?
Yes, we can go back to time now.
Brittany Henderson 1:15:14
Alright, so yeah, so time to less than two hours a week. You know, probably some bigger chunks of time training people or setting up something, I would guess that there’s some chunks of time where he’s setting up a new property,
Neil Henderson 1:15:28
yes, say that we should probably shut it setting up a new property, that’s probably a lot more work than than just two hours. It’s probably, you know, even if you figure, you know, a weekend or a week, I would I would estimate at worst, yeah. And then maybe a couple of weekends getting things, you know, really up and running smoothly and getting the getting the locks installed, getting the cameras and the noise detection, and, and then just learning, you know, learning how an individual property the individual idiosyncrasies of a property. Yeah, yeah,
Brittany Henderson 1:16:06
it’s nice, those those those systems, you know, the pricing system, and some of those things are going to take a lot of that extra leg work off the table. So you do have to have some flexibility to do those setups. But once that’s kind of done, then you’re really looking at and, and he’s saying two hours a week, and he has several properties. So you know, if you’re doing this with only a couple of properties, it’s probably going to be very minimal. I mean, really even like, we manage most of the things on our own property. And I would say we spend maybe, like 10 minutes a day max. Yeah, like absolute max. And some days that doesn’t happen. So it’s like an hour or less,
Neil Henderson 1:16:49
I spend maybe an hour a week, looking at sort of events and things like that are coming looking at our calendar and adjusting our prices.
Brittany Henderson 1:17:00
Neil Henderson 1:17:04
you know, we’re we talk, one of the things we’re going to try and do going forward is tell people about how the ways that we are utilizing some of the advice of our guests in our own in our life on life’s and two things that I came away with, from Michael that I’m going to use. One is price labs. And two is smart b&b. Yeah, we had already we had already been using turnover b&b before we met Michael. So smart b&b is on my list of things to look into. And price labs as well. Awesome.
Brittany Henderson 1:17:39
And then location, we sort of talked extensively about this in the podcast, and I think we need to like really hammer a hammer home. But basically, once you have your system set up, you could really do this almost anywhere. As long as you’ve got sort of a VA and you’ve got that team of people boots on the ground. So they, you know, the VA can say, I know which 24 hour plumber to call if there’s an issue, etc. And then most things are likely to kill ya, if something happens, there’s usually a way to make it right. If if, you know, something happens in that time where no one is available. So it’s a it’s a really, I mean, it’s, it could be a very good strategy for someone that has a similar life to us. So if you’re, you know, family,
Neil Henderson 1:18:31
like ours, I want to point out it’s more of a cash flow strategy than a wealth building strategy. Yes.
Brittany Henderson 1:18:36
Which he mentioned. I mean, he meant, or maybe it was afterwards. Okay, it was afterwards. So, you know, he he’s in looking at more like apartment syndication and finding investors. So yeah, so again, like, we have that sort of connection there. But, you know, cash flow is still important. And I think, you know, again, we just talk about this, I think after the interview, that we’re kind of in a stuck position, because we don’t have the time flexibility to really make the finding investors and apartment syndication piece, be very lucrative. So we probably need to find something that would allow us to not have to work so much for what we’re doing to give us some of that time flexibility to actually move forward. So,
Neil Henderson 1:19:31
okay, awesome. Once again, that was Michael show grim from str secrets calm. It was so great talking. Yeah,
Brittany Henderson 1:19:38
thanks to him for coming on. And we will bring him back on maybe some
Neil Henderson 1:19:44
time. All right, let’s hit the road. By
Four Key Take-Aways from this Episode
- Key Lessons Learned: Systematization. The key to success in short term rentals is to build systems that allow the business to run with minimal input from you the owner. Work On your business, not IN your business.
- How did they acquire their knowledge or what knowledge did they need to acquire?
Michael spent about $5,000 to enroll in a mastermind and take courses.
- How much money did it take to get started?
It took about $65,000 to get up and running on his first property that cost about $200,000 to buy and renovate, and $10,000 to furnish.
- How much time does it take now?
He spends under 2 hours a week when he is not setting up a new property.
- Could they do this strategy from anywhere in the world?
He could really do this from anywhere with a virtual assistant and team members.
What you’ll learn about in this episode
- Michael Sjogren discusses writing where he wanted to be in five years.
- How did he find his first deal and did it need rehabbing?
- He purchased his first property for $177,000 and put $25,000 into it.
- How hard was it to know what to put into the property?
- You can be the Walmart, Target, or Nordstrom of your market.
- Did Michael Sjogren pay cash or take out a loan for the property?
- How did his son’s health give him the confidence that everything would work out with real estate?
- Airbnb is a review-based business.
- Are there any rules of thumb that Michael Sjogren goes into when looking for a property?
- How do you research to make sure a short-term rental property is allowed in the area?
- How did he go about getting himself educated?
- How can people contact Michael Sjogren?
- What strategies does he use to buy properties?
- Operate with integrity or you won’t be operating long.
- What does a day in the life as a vacation rental manager look like?
- What types of software and services does he use?
- Michael shares some security advice.
- Are there any team members or systems he uses?
- How does he handle cleaning and maintenance?
- What should you know about turnover between guests?
- Is there a fear of party houses?
- What security camera does he favor?
- How far are his properties from him?
- Does he think he could do this from a cruise ship from anywhere in the world?
- How does customer issue resolution get handled?
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Resources Mentioned in the Show
- August Locks
- Ring Security Cameras
Connect with Guest:
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