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Buying Airbnbs In A Competitive Market

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SUMMARY:

I want to talk to you about the most common questions I’ve been getting, how to buy Airbnb properties in a competitive market? The market is in a frenzy right now, especially in a lot of these cottage country type areas where they’re in high demand. I want to share with you some of my tricks for buying properties in an incredibly hot market, so make sure you watch today’s video. 

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There are two things that you need to do in order to buy properties in a market like this. One of them is to understand how to analyze properties effectively. You need to be able to analyze properties, know exactly what you can go in, exactly what you can offer, and what is just stupid money. The last thing you want to do is get caught up in some big bidding war and overpay for a property. 

Number two, you need to know how to find off market properties because everything on the market right now is pretty competitive. You’re out there competing with other people. You want to have less competition and therefore lower prices. You need to have reliable ways to generate off market leads, meaning properties that the owner wants to sell but they haven’t listed it yet on the real estate websites or they haven’t listed it on the MLS. 

Let’s talk about analysis first, because that is important for on market or off market deals. You need to know how to properly run the numbers and have your most conservative worst case scenario projections. The worst case we figured is about $50,000 a year looking at 2018 and 2019 data. We want that number to represent at least at a bare minimum neutral cash flow, meaning that we’re not cash flowing negative in the absolute worst case scenario. 

Now, you might pay over market over the list price. But that doesn’t mean you have to pay over market rate. Market rate at the end of the day is whatever the market is saying that it’s worth. If it’s worth more to you, then you’re fine to pay more for it. Bear in mind, you want to make sure that it appraises well. 

That’s the biggest thing that I really rely on is just analysis. I want to make sure that through my analysis, I know at the end of the day, this property is going to make sense from an investment standpoint. That’s step number one. 

Step number two is finding off market deals. You can get a huge discount over what you’d pay for that exact same property on the market. When a property is on the market, then there has to be a 5% premium to pay each one of the realtors. If you go in without a buyer’s agent, the seller’s agent is going to charge an additional fee as if they’re representing you. There’s no real way around it. 

That’s why you want to buy properties off market as much as possible. Right off the bat, you’re saving 5%. And you often can get an even further discount because of the speed that you can make that transaction happen. It’s a lot less hassle for the seller, they don’t have to have people walking through their house. Oftentimes, they’re willing to concede a bit on the price to have some more agreeable terms and just make the overall process a lot less stressful for them. 

Now, if you think about a $500,000 home, 5% is $25,000. That’s $25,000, you just get to pocket right out of the gate. It’s well worth it to have some lead generation machines where you can find owners that want to sell their property, but that haven’t listed on the market or don’t want to list it on the market.

That is the basics. It’s still incredibly important to know how to analyze properties. Even in a cool market where things aren’t going crazy, it just becomes even more important. Otherwise, you’re just going to be either sitting on the sidelines waiting and never getting a property. Or even worse, you’re going to get your money in the wrong property and you’re going to lose a whole lot of money on it. And you’re gonna have a huge amount of loss potential return on that money, which ultimately is the worst-case scenario. 

VIDEO TRANSCRIPT:

What's up guys? It's James here and in today's video I want to talk to you about how to buy Airbnb properties in a competitive market.

By far the biggest question than the most common question that I've been getting since they started talking more about investing in properties for Airbnb is people asking, well, James, how do you buy when the market is going as crazy as it is right now, and I'm familiar with is intimately familiar with this myself, we're actively buying more properties right now. And the market is bananas properties are going for 3050 100 $150,000 over asking price.

Most recently, we were offering on a property that actually ended up going for what would it be it was listed for 499 went for 975. So it was five $475,000 over asking price that is insane people. It's insane. It's absolute craziness. The market is in a frenzy right now, especially in a lot of these cottage country type areas where they're in high demand, I get it. I'm there myself right there with you. So I want to share with you some of my tricks for buying properties in a incredibly hot market. So we're going to break that all down for you.

Now, if you are interested in investing in properties for Airbnb, you want to buy properties for short term rental, and get crazy ROI numbers like the ones I've talked about in other videos. By the way, check those out. If you haven't already seen them, then just click the link down below, check the description, there'll be one link there where you can actually schedule a 15 minute chat with me personally. And I'm gonna be working with a really small intimate group of people that 15 people that I'm going to be working with over the next six to 12 months here, helping them to invest profitably, profitably and successfully into short term rental properties into Airbnb, these would be really cool properties that you can actually use as a vacation home as well. Really awesome. So again, check out the link in the description down below, I highly recommend you check that out.

Because we're gonna be working with a small group of people and I might be able to help you to get some of the same results that we've been getting, and actually start investing in properties for Airbnb exceptionally profitably. So again, just go ahead and check that out in the description down below, schedule a call with me and I would love to actually speak with you, it's been really cool actually speaking with a bunch of you guys. So that you know, you can see me here exactly where I always am. But actually in real life in real life interface with you and I get to actually meet you see you guys on the other end of it not just be staring into a camera talking to it like a crazy person.

Really fun time. So just click the link in description down below. And we can be you know, me and you just chatting, just just chit chatting. So click the link in description down below, I'd love to see if we can help. So all that being said, let's talk now about buying properties for Airbnb in a competitive market, where property values are kind of just not really relevant because people are just buying properties for whatever they feel like buying properties for. Now, there are two things that you need to do in order to buy properties in a market like this. One of them is really understand how to analyze properties effectively, you need to be able to analyze properties know exactly what you can go in exactly what you can offer. And what is just stupid money.

The last thing you want to do is get caught up in some big bidding war and overpay for a property. So that's Thing number one, and we'll talk about that in more detail here as well. Number two, you need to know how to find off market properties off market deals because everything on the market right now is pretty competitive. It's pretty crazy. You're out there competing with other people. So you want to have less competition and therefore lower prices, you need to have reliable ways to generate off market leads brought leads on off market properties, meaning properties that the owner wants to sell. But they haven't listed it yet on the on the real estate websites or they haven't listed it on the MLS they haven't listed with a realtor, it's just gonna be a private sale, you know how to navigate the waters and make that happen. So let's talk about analysis first, because that is important for on market or off market deals.

You need to know how to properly run the numbers and have your you want to have your most conservative worst case scenario projections. So that's what I've talked about in previous videos, we're talking about, Hey, you know, what is the worst case scenario for this property? Well, the worst case we could figure is about $50,000 a year that was looking at 2018 and 2019 data and figuring if we got to less bedrooms and our property and it didn't perform well. That would be 50k. We want that number to represent at least at a bare minimum neutral cash flow, meaning that we're not cash flowing negative in the absolute worst case scenario. Now, if you watch any of my recent videos, you know that worst case scenario, we exceeded that number within five days of launching, we're now at almost $70,000 in total bookings. You know, just a second ago I got another 16 $100 booking for next week.

So we're closer to we're about $70,000 right now, in total bookings. We've far surpassed that number. So we're going to be cash flowing about $40,000. conservatively still, you know, looking at the conservative projections can be 40 probably closer to 60 bucks. I'd say $40,000 a year, that is huge, especially for the amount that we paid for the property. But we only were able to do that and make sure that that was a good investment because we knew how to run the numbers. You know, again, we can talk more about the call of this on the call, how to go into it, I can't go into a full analysis. And I've got some other videos on the channel that do walk through the analysis in a bit more detail.

But if you want to learn the step by step process that I use for running both a worst case scenario, and a more conservative, you know, realistic projection, and then also a best case scenario, factoring in all the different costs, running through all the different numbers, being able to really accurately project what the revenue is going to look like. Then again, just make sure you schedule a call with me, I'd love to chat with you more about that and kind of walk you through the process and show you some of the tools that we use to do that, because that's a big part of it as well. But by doing that, you ensure that you know what a property is actually worth to you. And you don't overpay for the property because someone else is just emotionally bidding.

Now, you might pay over market over the list price. But that doesn't mean you have to pay over market rate, market rate at the end of the day is market value is just whatever the market is saying that it's worth. So if it's worth more to you, then you're fine to pay more for it. Bearing in mind, you want to make sure that it appraises well, so you can get a mortgage on the property all that that's a little bit different as well. But typically, you don't have to worry about that as much.

Because generally speaking, you're you're gonna you're gonna exceed the point where it makes sense financially as an investment for you, before you start getting into crazy territory where the bank is saying it's not worth that much. So, again, all those things factor in and there's a little bit more nuance to it. But that's the biggest thing that I really rely on is just analysis because I want to make sure that through my analysis, I know at the end of the day, this property is going to make sense from an investment standpoint, that's step number one.

Step number two is finding off market deals that's so important right now is to find off market deals, because you can get them at a huge discount over what you'd pay for that exact same property on the market. Because obviously, when a property is on the market, then there has to be factored in 5% premium to pay each one of the realtors, the buyer's agent and the sellers agent. Now if you go in without a buyer's agent, the better believe that that seller's agent is either going to double on the deal.

And they're going to charge an additional their additional commission as if they're representing you, or they're going to hand you off to someone else in their brokerage who's going to do the same thing effectively. So there's no real way around it, there is going to be that 5% commission unless so there's no real way around it. So there's no real way around it, you are going to end up paying that 5% commission to the realtor one way or another in some really nice cases, you can get it negotiated out. But realistically, it's going to be paid.

So you're going to be paying that premium to buy a property on the market. That's why you want to buy properties off market as much as possible right off the bat, you're saving 5%. And you often can get an even further discount, because of the speed that you can make that transaction happen, it's a lot less hassle for the seller, they don't have to have people walking through their house. So oftentimes, they're willing to concede a bit on the price to have some more agreeable terms and just make the overall process a lot less stressful for them.

Now, if you think about on a $500,000, home 5% is $25,000, that's $25,000, you just get to pocket right out of the gate. And then additional savings beyond that. So it's well worth it to have some lead generation machines where you can find properties, find owners that want to sell their property, but that haven't listed on the market or don't want to list it on the market. Now again, I can talk more about the detail of exactly how to find those deals, we can kind of talk shop on all that just go ahead and schedule a call with me down below. And we can talk more about how we do that how that works. But that is the basics. That's how you find good deals in a crazy competitive market.

By the way, that's also the way that you find the best deals in a non competitive market, it's still going to give you a huge savings to buy properties off the market. And it's still incredibly important, it's still completely critical to know how to analyze properties. Even in a cool market where things aren't going crazy, it just becomes even more important, it was already crucial. And now it's even more crucial to know these things in a really, really hot market.

Because otherwise you're just going to be either sitting on the sidelines waiting and never actually getting getting a property getting getting return on your investment. Or even worse, you're going to get your money in there in the wrong property and you're going to lose a whole lot of money on it. And you're gonna have a huge amount of loss potential return on that money, which ultimately is obviously the worst case scenario.

So again, if you want to learn how to actually do this, you want to learn for myself, and actually I'm doing this with my business partner Riley, who is a professional full time real estate investor. He's gonna be working with me as well to help a small group of people to invest in properties for short term rental. So if you want to leverage our expertise to make sure you get started on the right foot, you do this the right way and you get an incredible return that I highly recommend you just click the link down the description down below to schedule a call with me quick 15 minute chat and I would love to see if we can help you to accomplish your goals and help you get started or continue growing and investing in Airbnb properties.

Now as always, if you like this video, please give it a thumbs up, hit that like button again, I'll link is down the description below if you want to schedule a quick call with me. And if you're new here to the channel, please subscribe. I would love to have you as part of the family I'd love to have you subscribe so you can stay up to date as we post new videos as opposed to every single week. So just make sure you hit that subscribe button if you haven't already, so you stay up to date with the channel. Alright, see you next

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