Transcription
Yo, my people! Today, we've got a mad one. We're meeting a 23-year-old entrepreneur that generated over 8 million with a unique Airbnb business model. He had no qualifications, no budget, and no experience. And today, we're going to find out exactly how he's done it. Stay tuned, it's going to be a banger!
[Music]
Guys, how you doing, man? How you doing, brother? Good to see you again. How you feeling? Good, looking sharp, man. You're looking sharp. What's, what's the plan for today? What, what you doing?
Uh, plan for today is we're just onboarding a new property around the corner, Park Muse, another Muse. So, I know we spoke to you before about all the amazing things you guys are doing in Airbnb and the luxury rental business. We'd love to have a quick tour and find out exactly how you became successful. Can we do that?
Of course, let's go.
All right, let's go, man. What you not see this morning, man? Onboard of the property around the corner. Had Po Muse, another muse. I haven't seen it before. Aiden took it on for us, and he's just furnished it. It's time to see what it looks like. So, he's like operations, your sales?
Yeah, yeah, yeah. I usually just pick up the properties and I leave it to him.
No, we met, um, a few weeks ago in Knightsbridge. Yeah. And so, the rent-to-rent business model is quite saturated now, is it? Everyone was doing it a few years ago, and I almost feel like, okay, it's kind of a ceiling to how much money you can make. Normally, it's around 10K a month, but you guys are doing way more than that.
Yeah. Where did it all start for you? Like, before the business, how did you get into it?
Um, where it all started was, I knew I wasn't going to further education. So, around year 9, year 10, obviously, you know, had a few businesses going already, such as I was selling anything I could get my hands on. And I was really good at, um, creating, establishing connections with people and relationships. Okay. I was a massive people's person. So, one night, I just went on Google and I looked up my attributes. What can a good salesman get into to make a lot of money, essentially, right? And estate agency and property in real estate was the first thing that kept on popping up. So, I said to myself, okay, cool, I'm going to, you know, study real estate from year 9 to year 11 and hopefully go from apprenticeship by the time my GCSEs ended.
Were you quite good at school? Like, what was your, you weren't the smart kids?
I was, I was a little [ __ ] in school until I met Aiden. So, it came to a point where, obviously, where I grew up, in my background, obviously, was way different to Aiden's. And I knew I had to start surrounding myself with people such as Aiden. Aiden was like a star top hitter in school. So, I just, like, you know, went to him one day in year 11, said, "Hey bro, can I join your group?" And they looked at me up and down and they said, "You know what, uh, all right, cool." Turned around, had a conversation within, said, "Michael, you can join, but certain things have to change." Like, so the group of people that I was affiliated with, yeah, yeah, yeah, can't really be, you know what I mean? So, yeah.
Taught me in. Thank you for that. Hey, it was the best decision we've made. Yeah. No one expected us to be friends, isn't it? Everyone else questioned.
No, at all. No. We've even gone back to the school to say hello, and they're so surprised that me, head boy.
Yeah, yeah. Oh, is it? Oh, you're one of those. From that point on, understanding that estate agency and real estate was the way for me, you know, year 11 came, applied for an apprenticeship on my CV again, into the apprenticeship based on that. An interview, they took me in. And a few months down the line from me starting a state agency, I rented out two properties. Helped, helped tell one.
It seems like you always had the entrepreneurial spirit because you didn't have the qualifications to do these jobs that you managed to get yourself in.
Yeah, yeah, yeah. Definitely. Where do you think that came from? That kind of hustle nature, and everyone hasn't got it.
One, as I said, obviously, environment where you grew up, circumstances, seeing certain things at a young age, such as family struggling, yourself struggling, you know, certain things just ignited a fire which, you know, you can't learn, teach, or gain. It's just built into you. So, from that point on, I just knew, you know, the saying, "You don't come from a rich family, make rich come from you." I like that one. Um, from a very young age, that stuck with me massively. That was my driver. Okay. As a kid, okay, cool. If, if you're willing to go through the numbers, if you're willing to sacrifice a few years, if you're willing to live below your means, if you're willing to just take noes and deal with it when it comes, then you can survive in anything to be paid. You, you just have to adapt to any circumstance. As you said, at the start, it is a saturated market. But if you can adapt to a saturated market and find there's always little gaps. When you do things like what we're doing with housing corporate clients in homes, in in houses, instead of service apartments. Yeah, yeah. If you find these little niches and you make the connections, because obviously, you know, life is about who you know, then you can build something and make something from it.
So, a bit later, we're going to go into the exact strategies you've used to to get to where you are. Before then, tell me, like, the launch story, your first step in terms of starting your company, how that looked like.
I have an uncle with Frankie Property House Buyers. He left, uh, CL of Comm. He left the area that grew up in, and he went down to Kent and he started his rent business down there. See him, speak him for a few years. One day I was at my Nan's house, I stumbled across him, and he said to me, "Hey Max, what you doing now?" Etc. I said, "Just finished school, I'm an estate agency." "What are you doing?" He said, "I've just signed my 50th deal, called my 50th deal for rent to rent." He said to me, "Come down to M and Kent this weekend if you want to learn how to actually start a business for yourself in property rather than be an agent for the rest of your life. If you're willing to do it, come down, I'll house you, and I'll teach you the game."
So, you found, mental, fundamental, it's my uncle.
Yeah, yeah. So, from that point on, he sat us down in his basement. I said, "All right, cool. Towards the game." Said, "We're going to start. We're going to open your company," which was Trapasso Properties. And we property. So, sat down with him in the basement after like a full weekend of just our brains being filled and pumped with rent-to-rent strategies. Opened the business, incorporated in 2019, November the 5th. And from that point on, he, he sat us down and made us apply the credit cards. He taught us the credit game as well, which was a massive help. Without the credit game, yeah, we wouldn't be, we probably wouldn't be here right now.
See, when you say credit, my heart just goes mad because, yeah, I had a mad student debt, credit card loan I took out of uni, and I couldn't pay it off, and I got so many issues from that. I've kind of been scarred with taking out credit.
I guess it's different types of credit, isn't there? It depends how you see it. There's different perspectives on credit. You're given free money. If you can leverage up free money, why wouldn't you? If the bank is giving you 10K, amount 5K a month on a card, which isn't yours, that you can literally use and invest and make the 5K back and pay it back, why wouldn't you do so to start off your business?
So, you miss a payment and it slaps on your ass, ass.
Yeah, that's the main thing. What we were doing is we were leveraging balance transfers. Okay? So, that's 0% interest balance transfers where you can transfer all your balance to, um, these cards and then that way, you just have to keep doing that minimum payment without incurring, and you get 12 months, and you switch cards.
Exactly. So, that's how you got the capital to start first. Okay. And it's, it's smart. It's essentially what I believe, even obviously, the top billionaires, multimillionaires, they're always borrowing against their house, their assets to take extra money out to loan and buy something else. The game is never to use your own money. If you can obviously use other people's money, especially the banks, to make more money, then they start to love you, they start to gain trust.
So, I think so far, the gems are: Don't be scared of not having the knowledge initially. Get a mentor to start with. Yeah. And then use other people's money to get in. If you haven't got your own money, find other people's. Don't be scared to take risks. Learn how to manage the risk. Be able to a lot more.
That's good, man. So, for the next, we're going to find out exactly how you found your locations and what strategies you use to kind of narrow down your target market.
[Music]
Okay, cool. So, before we get into how you find a location, tell me about how the model works, the business. How do you make money?
So, we legally take on properties and legally sublet. What you do is, when you rent our property, you sign not an AST, which is an assured shorthold tenancy. Uh, you sign a corporate lease contract. So, this essentially means your company is renting off of a landlord, and you get the permissions in the contract to be able to sublet and market to corporate clients and use their property as marketing tools for Airbnb portals, portals.
And why would they give you the property, not do it themselves?
A lot of landlords do try and put their properties, take some pictures, throw them on Airbnb and see if anybody bites. But there's a lot more to it, 'cause there's a load of competition going on in London. The way your listing becomes a successful listing, you've got to have a management team, you've got to have knowledge of the market. You know, there's a lot of things that you have to put into your listing to make sure it's a successful rental property.
They're getting 100 calls a day from people trying to do what you're doing. How do you differentiate to get those deals?
Quality over quantity. And you can see that on services that we provide, such as we have our own tailored in-house concierge service, tailored to our guests. Rarely any other company lets do this. Yeah. In, uh, in London, Central London, in the UK. Okay. So, as a landlord, you understand that, okay, cool, I'm giving my property to an actual corporation, which are professional, they're smart, they're tidy, they're neat. The people that they're housing are high net worth individuals, which means no parties. It's probably mostly families, which is, which is, and they're looked after. So, anything that goes on in a property, such as maintenance, anything needs to be done, no headache for the landlord. We take on everything. So, we sell that to them.
What is a company turning over? What have you achieved financially with the business so far?
So, we're projected turnover 8 million this year. And, yeah, we've just been growing so much since last year. 'Cause we went from going to, you know, one to three beds, kind of doing what other people are doing in London. And then we managed to get a four-bed house in Westminster, and we really saw what the potential of the London market is. Market it properly with the right SEO tactics, and we were like, "Let's put all our eggs in that basket and really hit it hard with the luxury market." And it's just been so much success this year.
That's sick, man. So, I feel like because of rent-to-rent, it normally caps at 10K, but you found a market where you can increase how much you're charging.
No, definitely, definitely. And that is essentially what everybody was scared to do. Think about it like this, a regular rent-to-rent, you can spend around 10, 15 grand on startup and build up a portfolio like that. 10, 15 grand, you can make on the side, you can save up for a few years from working. The properties, we invest with the minimum 100K deals. You know, there's rent of 30 grand, which means you put a six-week deposit down, which is near a 40 grand. And then it's like a 3,000, 4,000 sq ft house, which put another 50, 60k in for furnishings. So, the deals that we take on are heavily capital intensive. It's just bigger risk. It's how far you want to take it, you know what I mean? Bigger risk, bigger reward. And we've taken it to a different level. We understand what's involved, what could go wrong, but that only pushes us to build a bulletproof, okay, business model.
So, it sounds easy, but I'm sure it required a lot of capital. And we'll get into that in a second. Before that, can you tell me what goes into finding, like, a location? How do you decide, "Okay, this is the area I want to be in"?
It's definitely in regards to the due diligence. You look around. So, it, it goes around in regards to obviously popularity. You want to be looking at comparing listings, how close the train station is. And also, it's a lot to do with the property as well. For example, if it's an mews house, sometimes usually there's parking outside. It's a lot of factors that go in. But the deeper you go, the more amenities the place has, maybe it can be a bit further away from the train station. Depends on the most of the client that's coming in. If it's a proper luxury, luxury place that's going to be renting out for 1,000 a night, they probably have their own chauffeur, own cars, and everything. So, they don't mind being a bit more somewhere more secluded, like Central, maybe a 10-minute walk to the station. Whereas if you're like going for like a one to three bed, um, flat, and you're looking to get started, it's going to have to really be close to TFL, really well connected. There's a lot of things.
Is there any, like, particular tools or software you used to find these deals?
So, there's one thing that we use, um, called AirDNA, to kind of look around different Airbnbs. A massive dataset for all the Airbnbs and Vrbo in the area, in which booking.com, Vrbo, all the platforms. You can literally see what the rates are, what the occupancy are. Mad. It gives you a whole in-detail, um, analysis of everything. Really, really useful.
I mean, that's a good tool, isn't it? A lot of people would know about that.
It's a great tool. And what you can do from there is you can do your due diligence. You can, what is called a goldmine area. You can choose, what properties, what area you can, you want to invest in into London. And then you can relate that back to other portals such as Rightmove, Zoopla, and you can start searching for the property that you want to take on as your first property based off of the comparatives, based off of the nightly rates, based off the average, um, occupancy rates, and based on how much money goes into each deal.
I love it, man. And what kind of KPIs you look for?
So, the KPI, pretty much, we look at amenities. Like, for example, if you're going to come to, I don't know, Dubai or something, and your property has a jacuzzi and one doesn't, and they're exactly the same price, which one are you going to go for?
Jacuzzi.
Yeah. We, we look at the amenities. And it, it just comes down to obviously size as well. And also, there's another thing as well with these, um, flats and houses, also a feel. You want to have that, that's where you need to go view. You need to go actually see how it feels inside. And how many properties you guys got now, in terms of like, the whole portfolio?
So, we used to have 40-plus. It used to be a mixture of one to three beds and four to five beds. And then now we've pretty much downsized so that we can really focus on all luxury. So, we sold off for smaller deals and reinvested into luxury deals. And now we have a portfolio of 23 luxury properties, has four to six beds, which have cinema rooms, jacuzzi, swimming pools, and just a t.
What AA said quickly, uh, if you see a property in Dubai, one with a jacuzzi, one not, it's the exact same, but the one with the jacuzzi costs an extra £100 more a night. You're still going to go for that.
Yeah. It's these amenities that allow you to make the bigger margin. People are, you know what I mean? People are impulsive. You know what I'm saying? So, you see a jacuzzi, "Oh, jacuzzi." They think about straight away, "Pop a bit of champagne, get some friends in there, mess around. It's hot, it's cold, jump in the jacuzzi, have fun." They don't think about the extra 100 quid a night. They're just thinking about the jacuzzi. So, amenities is, uh, a massive part of it. Like, cinema room, swimming pool. They start thinking already, "Our guest experience now is going to be way better because we have these amenities." It's all about the amenities which differentiates us from our competition.
And what's funny about that is, you notice actually, they don't actually use their amenities that much. It's just to have it there. It really, like, like, they, we've had one of our properties, they only used it once. They were staying for like a month.
Yeah. And it's more work. It's just a tick box, isn't it? Like a, a USP kind of thing.
Exactly. Yeah. We use it. What I them, we. You guys are smashing it, man. So, we'll jump to the property, um, and we'll find out exactly more about how you make money in the business, how someone else can replicate your success. So, yeah, guys, stay tuned. It's going to be a banger.
[Music]
All right, guys. So, we're finally here. What area are we at and where are we going now?
We are in Hyde Park, north of Hyde Park, and into one of our new properties that we've just onboarded.
Nice, man. It's quite a unique street, isn't it?
It is. It is. A few horses just came by, kind of crapped all over our roads. So random.
So random. But, hey, it's a nice little touch. Nice, nice little touch. Right, here we are, man. Thank you.
[Music]
[Music]
Bro, guys, property is mad. Talk us through it, man. When did you get it?
We literally got it three days ago. Go into design in, and after then, furnished it. One day it, and you're literally seeing the finished product, man. And a van, four people come build everything in one day. It's really efficient so we can get up online really quickly.
Okay, cool. Before we go around, how did you actually get this property? 'Cause it's a nice property.
Just connection. So, it's coming to a point where we're known in the London market now. Agents call us, and they give us stuff like this. Once you build a rapport, once you build credibility and a reputation, you start getting approached yourself by top prime agencies and landlords. The turnover is nice, you know, you're trusted, and you've got a lovely business model. They call you and say, "Hey, we've got a property around the corner for you. If you want to come and see it." From where you've got another property.
Sick, man. So, we're talking to someone that's probably just left uni, they haven't really got any money or any experience. How do they get their first property deal?
Okay, so numbers game. Definitely do your research. AirDNA, look around your circle, look around the people that you know. Understand the money around you. Understand what you can provide to someone who has their money running away in their bank account, right? Go on AirDNA and look up the comparables, the comparables of a certain, certain area. Choose an area I'd like to invest in, dependent on how much money I believe I can get and what's around me. I'll start making the phone calls. I'll call up agents and landlords. Go to a load of viewings, meet a load of agents and landlords, even just for a coffee to pick their brain. So, build the rapport first. Don't go straight into business when you don't have a business to kind of show for yourself. So, from that point on, build the reputation and build the links, build the trust and credibility, and then hopefully get your first yes.
Yeah, 'cause I actually tried rent-to-rent years ago.
No, yeah, yeah. I think I paid to for this course, and, okay, just call people, they're going to be like, "Yeah, yeah, come take the property." Didn't work out. It's not like that. People for a week, it's got no yeses.
Yeah, yeah, yeah. And I just basically gave up.
Soon as you say "corporate lease," they don't want to talk to you. They don't want to talk to you. Yeah. And, and that's part of, don't want to give too much away, but, uh, I never mention corporate lease. I never mention Airbnb. I never mention holiday lease. I never, ever do. I don't want to give too, too much away. But that's where everybody goes wrong. My script is different. It's way different. You give us any, uh, that's something that goes more so along the lines of what my business model is tailored to. My own clients. It's not, there's different people coming in and out of the property. I'm housing individuals which I'm not vetting. I'm housing individuals which I don't have too much background on. It's more so, "This is my company and my people." Yeah. That's the most I can give. But, yeah, they give, it gives more of a trustworthy, "Okay, cool. My house is safe. He understands the people that are in the property. He's been in business with them for a long time, and he knows how to deal with them." Yeah, yeah.
Would you say you found, like, a gap in the market in terms of, like, the luxury larger houses and stuff?
Definitely. The way we started, we pretty much was doing a very middle, what you know, a very normal Airbnb. Though you'd find one bed with, you know, just normal amenities. Like, in, you know, 2023, we got this four-bed in Westminster, and we saw the numbers pulling in. We were like, "Doing a thousand a night in the summer." And we were like, "You got to do some mad." And then from there, yeah, we've just been scaling.
Scaling? Is it, man, that one was crazy. That was the first of luxury property. We got it. It was the four of a garage. Um, we had to put six down, six months down in advance for that property.
Your own money? Investors' money?
Investors' money. But at that point there, we was only dealing with 15 grand, 16 grand, 20 grand deal tops. This deal, all together, was 80k. So, for us, it was massive. And we were just standing outside of the property, we were just looking at each other like, "How the [ __ ] are we going to come for 80 grand?" 80 grand deposit, or like 80 grand down, furnishings, deposit, and rent up front. Whole deal, 80k. And we were just kind of there like, "We're going to do it somehow, some way. Somewhere we're going to get the 80 in, and this is going to be the first step into luxury rentals and Airbnb."
The main thing about it is landlords trusting you, right? And if you only deal with one to three beds, and you want to take on a six-bedroom in Knightsbridge, right? What makes you think that they're going to be able to handle it?
Different league. Exactly. But how do you get that credibility before you have your first property?
Six months in advance, you know, after, oh, you pay rent. Yeah, yeah. So, the six months in advance is essentially the break clause. It's a year contract, six months in advance. Okay. You pay the six months, and on the fourth or fifth month, depending on what you choose, you have to pay the seventh month. If you get back on a rolling one monthly, if you can't come up with the money, landlord gets to serve notice on you. So, by the six month, you're out. They've made their six months, they're secure. Then they just remarket their property. Yeah. So, that's what a lot of people don't understand. So, if you're a person and you need, trying to get in the game, have a bit of money, you've saved up to put down the three month or the six month to attain that property, you're going to have to take the hit. But you're going to, you're going to recoup the money. Just the trust the process, I'd say. You really got to believe in.
I guess do the business one, do your due diligence, right? Because you, it will give, make you have confidence in your numbers. As long as you execute at market properly, obviously. Yeah, yeah. But, yeah, you're dealing with people like us in the game. So, if you can go there with an incentive of, "Go, you know, Mr. Landlord, Mr. Landlord takes six months. Trust me." You're beating 90% of, be most people, 'cause they don't want to do that.
Okay. So, so far, I thought like the steps you've taken is you found a mentor, you then leverage other people's money to get that initial cash, and you try to pitch yourself as not directly a corporate lease, but something different to kind of get through the door, basically.
Mhm. Yeah, man. All right. So, we're going to dive through into the systems and automation stuff in a bit. But first, see the property, bro.
Okay, let's go.
So, now we're going to go see the gym. We're going to go see the cinema room. Really cool three-bedroom house, cinema room, gym, roof terrace, and private garage.
I need one of these, man. Yeah. A house like this is probably going to be going anywhere from 1,500 to 2,000 a night.
Wow. And how much is this rental, in terms of like, a normal?
We're renting it 12, 12K a month. 12K. Yeah. So, what we're doing, I think one of the big solutions that we propose to landlords and why they love us as well, is a lot of people don't have already their own furniture, or then they're not willing to put up their own furniture, right? We promise to really furnish it to another level and really add everything. And we move really quickly. So, it's really, as as Michael said, just peace of mind. Right? They're moving, they're going to keep nice and furnished. It's in their interest to keep the property taken care of for cents. So, and they got some cash up front, six months, you know, exactly. Well, yet to start off. But now, with the reputation, we don't need to do that.
Okay, okay. 'Cause my initial thing was, what is the selling point? My guess, it is, you're furnishing it, maintaining it. All the headaches are gone, right? If I've got like, no money, how do I do this without like a 5K budget or whatever?
You find the money. What is it? Find the deal, the money will come. Find the deal, money will come. Remember what I said the first time? I said, um, there's people on this planet with money, no time, no knowledge. Time, knowledge, no money. Been that together, bro. You, you will make a lot of money.
But, yeah, this is a cinema room. Ooh. Cinema. Oh, nice. Projector comes down from there. You got the rem. I like this. You can get nice and cozy. Family.
Okay, so what's the next steps with the property then? How do you?
So, now, literally in 30 minutes, we get a photographer. Do professional photography. And then from there, we just put it on our website, put it, um, you know, push it out to all our clients. We've got partnerships with different agencies, different travel agencies, and, um, you know, they have curated VIP guests that come to London with, you know, they need a cinema room, they need a gym. We put property like this, they'll take it for like two, three months. That's what we like to do. Is we like to get market, market material before our furnishing company gives us a CGI package of what the furniture we're going to be using, um, as a brochure. So, we market that straight away, two weeks, a week before even taking on a property. And we tend to find clients as soon as we onboard the property. Yeah. And we have minimum on average three-month tenancies with our couple clients. So, straight off the bat, we take on the property, property's housed, money, money's made back.
So, talk me through the numbers on this. So, what kind of revenue you're expecting and what kind of profit margin could you make?
So, we're pretty much renting this up for 12K, and obviously then we're expecting anywhere from 30K upwards.
So, you're paying 12K, you're going to 30K. Yeah. I want to find out a bit more about how you get your clients. But let's see the rest of the property.
Yeah, let's do it.
So, what's been like your favorite deal so far?
Ooh, what a question. Actually, a good one. What a question. Wow, that's actually a good one. Too many. I know mine. I think I know Aiden's. Yours is Princess Gate. Princess Gate. A famous footballer is our, our landlord for one of our properties. Five bed, right in front of Science Museum. It's in a mews as well. And oh my God, that place has got a cinema room that's like on this floor. This whole floor. It goes deep. Big. It's got a bar, like 12 people can fit inside.
And how much you pay for that?
That one's 13K a month. And we currently, we're renting out for 30K a month right now.
[ __ ] man. There's like 100% gross profit. Obviously, there's overheads and all the other things. But talk me through what, what's the kind of overhead?
It would be, uh, yeah, just your team, your management team, your communications team, concierge team, yeah, all of that. Ensuring that the guest is taken care of.
And what would you say is like the split in terms of the cost versus your profit? Like, what percentage on it?
It, it probably takes around, yeah, anywhere from 10 to 20% off the revenue. So, it's actually quite a lot. What you're making, like, over 30% margin then?
Definitely. We, we don't take any properties on unless we know we're guaranteed double the rent as revenue. Yeah. That's pretty much. So, it's always 100%, uh, return of profit. Aiden's managed to find how to diligently, literally scrutinize a property and understand, "Okay, cool. This is going to make double the rent as revenue, and we're going to be able to have fund tokens." That's all, you know what I mean? Fun.
Can you give us just one of the techniques, or is it all like top secret?
I'll give you. It's more of a thing where you want to have the philosophy that you want to show, especially on Airbnb, that you're an active, good host, right? So, you want to always show that you're changing pictures, you're pretty much, you know, tweaking the list to make it as best as possible. The best, the best thing I've done is automated the whole SEO. SEO bits. So, I used to, was doing all of it, right? I was, you know, have to do things every day. And now I've literally got a team of people that, um, do all of it. So, that all our properties are, you're boosted, and they're always going to be at the top of the listing.
So, you'd say the best thing you've done is literally write down everything you've done, created the SOP, standard operating procedure, and you've given it to VAs?
Yes. And around the clock, 12 hours each, which is what they work. Every, every day for the whole week, they're just constantly, uh, adding new things, understanding how to boost SEO. So, automating and documenting everything is the best thing you did.
I think definitely. One thing business owners don't do, especially at the start, they don't, they don't document. They're just too busy doing and growing, which is really good. But documenting yourself along the way allows you to be replaceable. Things where you know, you can buy back your time without having to train them up. Got all the information left.
That's so true. I have that just in case anything happens. And let's say, like, me and I, we both had our pen six burst a few weeks ago. We were both out of the game. Both of us, three days, three days apart. [ __ ] man. Both out of the game. Never in the four years we've been running Trapasso Properties have we both been out. Aiden will get sick, I pick up his slack. I get sick, he picks up my slack. Luckily, you in that moment in time, when we were both out, the business was still running. We go on holiday, business is still running because standard operating procedures are given to the whole team. And there's always someone at the top monitoring and scrutinizing every single employee, ensuring that they do what they have to do at the best level possible for extra value.
As well with this, don't just, you know, document it and then leave it as that. Make SOPs to create the SOPs. So, whenever, let's say something new happens in the property, right? There's a process for handling that new, like, problem or whatever. Then, once that happens and it's resolved, the employees have to add it to the SOP. So, it builds itself. And then you create an ecosystem where I literally just get reports now of what's been added, and I can see the SOP go from 100 pages to 250 pages. I think we have like 300 pages of just straight how the business has run now. And also, this is going to help if you're looking for an exit strategy. You're going to, you know, this SOP is worth a lot. It's pretty much the sketch of the whole business.
That's it, man. I want to get into how you automate this as well. But let's see the rest of the property.
Let's do it.
Cute little bathroom. Wow. I like the finish on this.
You like the finish on this? Definitely. What did you say it was? Bales?
Yeah, especially that, that, uh, yeah, other bathroom there. This one's really nice. I've been to Bales, so I don't know.
This is the master bedroom. [ __ ] ass. Very high. I do like the color scheme. It's quite, we, we try to go for very clean, very minimalistic, contemporary. Appeals to everyone, you know? On suite in every room, which is good. And we've got aircon around the whole house. And this is massive when you're dealing with, um, corporate clients. 'Cause most corporate clients, especially in this area that we're in right now, um, they're Arab. And, you know, Arabs are the aircon. What, no matter what season it is, they have the aircon full blast.
It's expensive though, is it?
Expensive as hell. And it's, and it's rare to find, uh, a house in London with aircon on the corporate kind of market. Which is why we've managed to tap into a different niche. Because the rent on some of these properties that have aircon, niche, every room is ridiculous. Find those little things that USPs, like the air conditioning, or that's it. It goes a long way, man. It goes a long way. And there's a lot of people in, in the game who don't take on properties with aircon because they're, they're like, "All right, cool. I'm paying an extra like three, four grand a month just because of the aircon." You have to think outside the box and bring in, you have to cater to every single type of clientele when you're dealing with, uh, holiday hospitality accommodation.
What's your strategy for, like, finding clients? What channels do you use?
At the start, or now? At the start, it's, we, so we had a quite different take on the market because when you're using a channel manager, so what a channel manager is, is when you can connect, um, you know, on what platform, booking.com, all the booking sites, right? The problem with that is it raises the booking fees on all the platforms. So, for example, Airbnb, if you just were to host Airbnb by itself, it'd be a 3% fee on your total booking. Whereas if you connect a channel manager to it, it, it goes up to 15%. So, if you got 10,000 working, you're literally raising it by like, you know, yeah, exactly. So, you're losing out on a large margin. So, what we've done is we've pretty much mastered the Airbnb. Su, we are the top, top Airbnb hosts. Got super hosts, get guest favorites. We basically like complete every single stage where the properties are, you know, getting booked out and have the best reviews. Done that by having having the best assets. And then got a team that just focuses on testing things.
Exactly. But how do you actually get, like, consistent flow? 'Cause I'm sure it's like seasonal.
Well, I mean, everyone uses PriceLabs. We personally don't. But PriceLabs would be a good thing if you don't have the time and don't have the team, okay, to manually track, change prices, and everything. It does it automatically. And if there's a holiday, or raise prices, things like that. PriceLabs have their own integrated system. They take in the, um, market data from AirDNA or Airbnb. And after then, from there, they can change the pricing.
Oh, man. Yeah, it's generic. It's very good. But I believe a human's knowledge is better than a robot's knowledge. If you can tweak a bit more, you can adjust the price and take more of a risk. The robot won't take a risk. But as a human being, you can take the risk and put the prices higher, so you gain a higher, higher margin, right? Um, that's why we never went for PriceLabs. Aiden, just as I said, scrutinized the market like mental and literally just jotted down when you should change the, change the prices at what percentage, every hour, you know what I mean? So, what time. And, yeah, that's it.
Come to this room. See. Oh, we missed this one. Cute one. Yeah, we didn't come into this one. This is where the terrace is. Okay. Fancy. Very nice. This is definitely goals, man. Yeah. This in the summer, my god. Hang out, have a little barbecue up here, isn't it?
How many people would you need to run this? And who are they? What are the roles?
Property manager, we need some VAs, concierge service, maybe an aircon boy. There's a whole massive team for if they want private chefs, if they want spa. Mmm. It's a, it's a whole operation.
Okay. And then where do you find those people? And how do you know they're reliable?
It's about finding people that you can trust and are reliable. 'Cause there are people that have a good service, but if they're not, if not trustworthy and not reliable, it's never going to be a thing where you can maintain your standard for the customer. You got to be cutthroat. Yeah. You got to be cutthroat. You got to be cutthroat.
So, do you get like referrals to find the actual people, or is it like a site?
Those are actually the best, um, kind of recommendations we've had. Whenever we've had someone to refer someone, that means they're pretty much vouching for someone, right? Okay. We've have have found some people online, everything, and acquired, and, you know, going to see their services. But finding good quality referrals.
Okay. And then this property, how much profit do you think you can make potentially?
Anywhere from 10, 10 to 20K.
And how much time would it take you to run this property yourselves?
What do you mean by yourselves? How many hours would you have to put in a month to run this sort of like?
Right, right now. Not. We've at the point where the only thing we need to do is go check out the property. It's all in working order. And automation comes not only on the management side of things, it's also on the sales side of things. So, En does the management. He's the brain of the company. On the tongue, I do the, do the sales. It's, it's come to a point where, you know, you build a reputation for yourself, you automate your own side of things. I haven't picked up the phone, started dialing in a very long time. I have a team of deal sources who actually have my criteria, who just hit the phones like crazy for me, and I pay them a source fee. There's agents that I've worked with. So, the whole of London knows our niche criteria. So, now it's the point where I get the phone call, "Hey, you want to come and see this?" Instead of us doing the, it was me doing like the 100 phone calls a day, the 100 viewings, running around the whole of London. So, yeah, you can automate the, the scaling point as well of taking on properties.
So, what we kind of do is rock up, see the property, like it, sign papers, boom, done.
Sick. So, the main thing for you is finding the deals?
I find the deals. I build the relationships with the agents and the landlords. Prime properties in London. And Aiden, essentially, after that, takes it on and the team plates everything up and ensures that it runs smoothly as a business. 'Cause each different property is its own business.
All right, should we see? Is that everything we see on property?
Yeah, let's have that downstairs. Just the garage. That's all.
All right, guys. Property was sick. It's mad. It doesn't look that big from outside. When you come in, it's actually crazy, man.
Are you happy with the property?
Always. It always turns out so well.
I want to save the best to last. Is there any, like, what is the secret sauce to your success? 'Cause you're not an average rent-to-rent business. You've done multiple millions. What do you think is your secret sauce? What makes you different?
Priorities, that I'd say. So, priorities. If you get your priorities sorted and understand that you're going to have to do a good five years of just being in the dirt, in the field, in the mud, reinvesting every single penny that you make, taking on even more investment, finding out what financial freedom means to you, your purpose, your why, and your goal. And you, for purpose and why, scares you every morning you wake up and you got a fire, you know, going crazy in your belly every single day. You're going to forget about the short-term gratification. Humans in general, they just love the short-term gratification, the short-term dopamine hits, you know what I mean? So, if you can sit there, understand your priorities, and look at yourself and go, "I want to take the business to the top," and understanding that you're going to have to go through the sacrifices, accept change within the midst of that, then you will go to different levels.
And it's all about mindset. It, like, it took us two years to get our first property. True belief. That's the secret. There's nothing secret about it. It's just, you need to really believe in yourself, what you want to do, and have a clear vision.
So, tell me, what is like the future of, first of all, the rent-to-rent business model? And what's your future look like? What are you trying to do next?
Take over the London market, really solidify ourselves. And from there, we want to take this business model and put it on into like other, um, capital cities. Like, we were thinking about New York, Dubai, other cities where, you know, ultra-high net worth individuals come and want these kind of services.
And then, just to simplify things and summarize, give me like the step-by-step process of starting your first rent-to-rent business model.
All right, cool. Understand where you're going to invest. Understand where you want to start your business. Like, say, I live in South London, I've got maybe £2,000 in my pocket. Okay. What's the steps with two?
Okay, what I'd say is, at that moment in time, find a criteria. Understand the money around you. Understand the money that you can collect. And then go ahead and do some market analysis. First, first, first things first, find a mentor. Find someone that can guide you through starting up so you make less mistakes, which will cost you a lot of money, which they went through.
And where do I find a mentor?
Go online. Yeah, I'd say really look at the testimonials and really look at the reviews. And maybe even try reach out to people that have gone in their course. Kind of do as much research as possible so you can find someone trustworthy and someone that's actually, you know, really doing what they're doing.
Okay, cool. Next stage.
Find out where you want to invest. We chose Central. I grew up South as well. We just looked at each other and said, "We're going to go dive straight into Central." So, understand how much money you have. Find a mentor. Look in your immediate environment. And thirdly, I'd say, start making the phone calls. If you don't have that much time, you said you had two grand saved up, you can easily pay two, you can pay two grand to a deal sourcer to find you a deal for your criteria. So, say you've looked around your family, 15K, you spoke with about the business model, you know, you got access to 15K. You do your own market analysis, you do your own research.
Where do I find the deal sourcer? Would you say Facebook is a massive hub for it? You can look up, um, you can join communities, rent-to-rent in whatever city you're in, and you see the deals coming in. You send a little message in there with your criteria, and you've got dedicated deal sources that are just finding properties for you. Then again, if you want to make it a business model and you want to dedicate yourself to it and learn the arts of sales and be independent, then you make the phone calls. You go through the knit and grit. You go through the dirt and understand within yourself, you got a backbone within the business.
Okay. Okay. So, it's either all. Okay. Find your criteria. Find your gold mine area. Find a mentor. Know how much money you have around you. And then from that point on, take on the property.
Last thing, any messages for the audience? Any, like, the best piece of advice you'd want to give your younger self?
Basically, start even earlier, man. Age does not matter at all. And, you know, a lot of people are scared to start at a young age, but it's a very admirable trait. When you get into the business world, keep your goals and your ambitions to yourself. Yeah, that's fine. Be careful who you share with. I'd tell myself, but tell the world that you're a young aspiring entrepreneur and this is what you want to do. And just manifest heavy. And understand that anybody can get to where you want to be. It's hard work beats talent every time. So, don't worry about the people in the game that have more talent. They learned the game longer than you. Just go hard, go heavy, and things will happen. That's what I'd say.
I love that, man. Where can they find you? What's the, the Instagram?
Instagram, Michael W Chapasso, and Aiden.
And reach out to you for any help if you need?
Yeah, definitely, man. Anytime. Love to give help.
Guys, go check them out. What a banger of an episode. And we'll see you on the next one.
[Music]