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Melissa and Zev Podcast: Otter Voice Meeting Notes

Melissa and Zev Podcast

Jae Seok An27min

Delia

00:02

Welcome back to another episode of Into The Airbnb, where we chat with Airbnb hosts about their short-term rental experience. Our guests for today are Melissa and Zev Forrest, two Airbnb super hosts who got started on Airbnb Rental Arbitrage after realizing owning real estate was not their thing. They got hit by the first COVID outbreak after recently starting with their first owned rental and it went downhill for them until they found out about the Rental Arbitrage business model. Since then, they have been excelling in the Rental Arbitrage business and now they're offering educational courses to teach people how to get started and succeed on the Airbnb work LEGALLY, without owning real estate. This episode is sponsored by Airbtics, short-term rental analytics for a high return investments, comprehensive data for insights, ideas and inspiration. Go to app.airbtics.com to find precise Airbnb data such as occupancy rate, revenue, average daily rate, and so on. So, without further ado, let's get into it! So can you both tell me how did you get started with the whole short-term rental business?

Melissa

01:36

Yeah, so we come from a background in real estate but we got started with Airbnb about four and a half years ago. We went to a free workshop on Airbnb and we were interested in quitting our real estate job at the time, we were both commercial real estate agents and we were just looking for something else, so we went to this free workshop. And from there, we bought our first pretty much property that we were able to leverage out from us a unit that was connected to the home and so we were able to have two Airbnbs from our first home purchase. And from there, we discovered that we wanted to continue growing in this business, but buying was harder to do, so we discover the rental arbitrage model we wanted to jump into on that.

Zev

02:24

Yeah, Melissa was actually the one that had the idea of going to a free workshop on Airbnb and leasing out, renting out a part of our home and honestly, I was a little bit not really into it and to go into that, but I'm so grateful to go to that with her. She opened my eyes to that and ever since then we've really hit the ground running with Airbnb and it's been a life changer.

Delia

02:47

That's great! And how did you get started with doing rental arbitrage? So it wasn't right away because you told me you already have purchased our property, right?

Melissa

02:56

Yes.

Delia

02:57

So that workshop you went to, that's what inspired you to go with rental arbitrage?

Melissa

03:03

No, no. So the workshop we went to was focus about on buying a home, so after we bought our first home, we our investment in that was about... what was it like 80,000? $80,000 total and so we were pretty much left with not so much liquid cash to continue growing our business. So we invested in other mentors at the time that we're doing rental arbitrage and that's where we learned that model and then we combine our skills in real estate sales because we were doing a lot of role playing at the time and we were trained on how to overcome objections and talk to landlords already at that time, but just a different side of business. So we combined our skills with what we learned from other mentors and we came up with a pitch that really worked for us so we could continue on this business with rental arbitrage.

Delia

03:57

Oh, that's great! And can you tell me a little bit how was like your first approach to rental arbitrage when you did it for the first time? How was it like?

Zev

04:07

Yeah, so one of the ways that we heard from someone to go about speaking with landlords was not the right way that we do now, it wasn't a good way to approach landlords. So the first time was actually pretty funny, what we did is we reached out to a landlord to go look at their home that which they had for rent online and when we got there, we met with the leasing agent and after we toured the whole property, she was under the assumption that we were looking for it to live in ourselves and build a family or whatnot. But at the end of the tour, we told her what our intentions were and that we wanted to sublease it for rental arbitrage and she actually she threw up her hands in the air and she's like "You completely wasted my time! Why didn't you tell me this from the beginning? The owners are absolutely not going to be okay with this" and that's somewhat expected especially when we surprised her, we didn't let her know why we were meeting so I could understand, I had some empathy why she felt like we wasted her time. But, you know, I told her "Hey, look, what are some of your concerns? Why wouldn't it be something that the owner is open to?" and she had a couple of concerns that weren't super valid, but she said, "You know what? The owner lives nearby, why don't I have her come over and you can talk to her? See if she's open to it". And long story short, the owner came by we told her all the benefits of having us as a tenant, and the owner was like, "Okay, yeah, great. Let's give it a try" and we've been here ever since. Actually, yeah, the property that we looked at was two units. It was a back house, the garage that was converted and it was a main home, and we use both of them.

Delia

05:43

And what was the pitch that sold you to that owner?

Zev

05:47

You know, things like telling them that we're going to take care of their property, you know, it's always going to be maintained and well kept and we showed them that our experience as hosts, you know, that we are, we keep the property in good shape. We're always monitoring it, there's security cameras, and I'm sure at first she was kind of on the fence about letting us or not, but the fact that we were going to take both units on her property and also the fact that we were very approachable, and we're very professional in person. I think that was, we were able to push her over the ledge on "Oh, hey, okay, let's give these guys a try and see if we can work something out with them".

Melissa

06:28

When they first looked at the home, the home was recently remodeled, but they had tenants that were living in the home, I think for about one year only and they had already left the wall, like with scratches and all wrapped up, and not in the best condition than we mentioned, I'm like, "Hey, look with us, you will never have this problem because we're always going to keep the home in prime 5-star conditions because, you know, our business is a 5-star business and so your home will be a 5-star home".

Delia

06:59

Okay, that's great! So those are always right now, like the basis to convince a landlord, right? I've heard it before. But do you think that's a pitch that cancel everyone, right? That there are some landlords that are still going to say no?

Melissa

07:15

Yeah. I mean, I feel that one pitch, I don't believe there's one same script for every landlord. I think, number one, building your rapport, it's like he was saying that we were approachable in the way we delivered our pitch, right? So it's more than what you say. But it's how you say it and how you build rapport with that person because this becomes a trust essence, they get to trust you and your business in their home. So number one is building rapport. It's not so much, you know what you're going to say because if you stay with in a way that it's not going to project competence, they're not going to have the trust in you, and they're not going to say yes to you. So I would say number one is building rapport. Number two is just knowing what objections they're going to have and how to overcome them, what concerns you're going to have, and how to overcome them so that, you know, they feel that you could take on their home,

Zev

08:09

Every landlord is going to be different and it's just, it's all sales. So in sales, cross every single industry, everyone's going to be different, every prospect, what you call them is going to be different, right? So everyone's going to have in sales, it's all about listening, you know, it's all about asking the right questions and listening to them. You want to be an active listener and you want to hear what their problems are because, as me the person that's selling my business to you, I want to make sure that I solve your problems. So for this landlord, you know, maybe their problem was, their concern/problem is "Okay, the house is going to be ruined because of long-term tenants, they tend to trash the place". So we overcame that objection, you know, if there's another landlord where their problem is not getting paid rent on time because their experience in the past has always been chasing tenants for rent, then we say, "Hey, what has been your biggest concerns? Or what's your biggest problems in the past with previous tenants?" and they go, "Oh, well, you know what, I've always had to chase down the rent" and we go, "Well, you know, what if we pay rent early? guaranteed, and we have references to prove that". So sales is always trying to uncover what that specific person in front of us problems are, and explain to them how you solve that.

Delia

09:20

That makes a lot of sense, actually and it's my first time hearing about it this way. When people try to talk about rental arbitrage, you know, in the Facebook groups, where is where I'm more familiar with that is, seems like people think there is one secret pathway to it, right?

Zev

09:40

Right. It's, I mean, I hear them and I understand them and usually, the top concerns and problems for a landlord fall into those categories that you're talking about and that you see. And people that are inexperienced with sales, they think all the person wants to hear is their main pitch like everything but they think it solves their problems and everything that is good about their business, they just like smother the other person with that, like, imagine going on a date and then just like telling the other person all the things you think are good about yourself, but they really don't care about any of that, right? What if they just care about, are you gonna be a good step father to my child? But meanwhile, you're telling them how like you work out every day and how healthy you are, right? They don't care about it. So yeah, those categories fall into the main things that usually the most common ones that come up, but still, you can never expect that you always gotta go into a meeting, thinking, "How can I listen to this to this person? And how can I solve their problems?".

Melissa

10:41

Right? It's to be a conversation, when you go out there and we tell a lot of our mentees is like, "Don't go out there and have the squared binges, blah blah blah Mr. Landlord", right? Like you get to have a conversation like, it's a perfect example, like you're going on a first day, you're building rapport, right? You're listening to them, you're listening to the things they're looking for and if they're looking for something, then you say, okay, well, you try to pitch something at that, right? To make it a win-win for them.

Delia

11:10

Yeah, that makes a lot of sense! And now that you told me about your background, and all this new knowledge that also reached me, right? It makes sense that you decided to start the mentorship program. Can you tell me a little more how you decided to start with this, with the whole mentorship program?

Melissa

11:27

Yes, of course. So I had already, we've been in this business for four and a half years and prior to starting host life, which is our mentorship program, I was already in mentoring in another coaching program for about two years. So I've mentored hundreds of people already. But then when COVID hit, and he got laid off of his job, I'm like, "Why don't we do this together and create a bigger impact in the world?". And we felt that he had a strong background and I have my own strong background and together, we could just be a powerhouse and mentoring people. So last year, around this time actually, we have one year since we created host live. And with host live we have a direct mentorship program where people get the course that we created and then one on one direct mentorship access in a group setting with Zev and I, with a big focus on sales training because part of the pitch, as he was saying is sales training, right? So if you're not comfortable with sales, if you're not comfortable with talking to people, if you're not comfortable getting on the phone and overcoming objections, then this is not going to work for you, this model is not going to work for you. So we have a big emphasis on training them. He does the training and then I focus a lot on teaching them about: how to become an Airbnb super host, how to create systems, how to create a team, how to create design, and automation and communication.

Delia

12:57

When people reach, you know, to your mentorship program, what kind of people are they usually? Are these people who are already in the Airbnb and short-term rental business, doing long-term rentals maybe or just curious about the rental arbitrage model?

Zev

13:12

Yeah, the majority of our students so far don't have any Airbnb, they don't have any real estate and most of them are either currently an entrepreneur or they have an entrepreneurial mindset, meaning that they are in a job at nine to five maybe, but there's just something inside of them everyday that tells them that they're not in the right place, right? They want to get out of that job. So yeah, maybe entrepreneurs and people that either maybe they want to keep their job or they want a side hustle or they're very interested in the hospitality industry. But usually just entrepreneurs are the ones that are reaching out to us.

Delia

13:46

How does the people come out of your mentorship program? How does they mindset change during that period?

Melissa

13:57

I love that you mentioned the word mindset because we truly believe that success first starts in your mind. We could give you all the tools that you need, we could give you the scripts, the templates, and how to do this and this and that, right? But if you don't have the mindset of success, you're going to take everything we learn, finish our program and continue doing the same thing you've been doing in your life, right? So as far as mindset, we really try to connect people back to their "why?". And even in our selection process, we do have a selection process and who we accept into our program, we want to make sure that they have a strong "why?", why do they want to do this? Why do they want to do Airbnb? Why do they want to join our course? And once they have a strong why, then we really try to have them encounter breakthroughs in having their mindset shift into complete possibilities and not impossible, right? So really having an open mindset into possibilities and that's the life that they want, really is possible for them.

Zev

14:56

Yeah, now that Melissa mentioned possibilities, our more recent student is, so he would say things like, "Oh, but what if the landlord doesn't allow this? Or what if the call goes wrong? Or what if, you know, we're so close to getting the landlord to allow us, we're talking to them, but what if he wants us to do something that's not so great for our business?" and we're thinking, "Look, don't think about what kind of make it impossible. Think about all the things that are going to make this possible", you know, that's just a little tweak of your mindset to making keep going, keep trying and having more confidence in yourself too.

Delia

15:28

And essentially, what path do you take to get your students in this mentorship programs? Like, what are the steps you take to change their mindset? And what do you teach to them?

Melissa

15:42

It goes, just in general, with our direct coaching, we have pretty much set up weekly things to do in our mentorship program for the 90 days and so if we're seeing that a student is pretty much falling behind, and really not taking action and we check in with our students on a weekly basis and we're seeing that they're really not doing what they're saying they're going to do, then this is when we do a call with them, that it's all a mindset call with them and we really go with them. We're not there to be their friends and tell them what they want to hear, we tell them what they need to hear to really elevate their lives, right? Because a lot of times, our circle of people only tell you what you want to hear, right? So we are the mentors that are going to tell you what's on your blind side that you're probably not seeing, that's blocking your mind from seeing the possibility that's available to you. So we really just go into BRAC coaching.

Delia

16:37

Yeah, and now that you mentioned this, that is like, really valuable from your side because we always see these mentors, like Airbnb coaches that are like really, they just want to sell their mentorship, you know, they really don't want to, they really don't do this personal approach that you say you do with your students, which is like very important, but it's really valuable what you do with them and thinking can really make some change in their mindset, in their lives.

Melissa

17:09

Right. Yeah, we just did and it's more than Airbnb, it's more than that just then wanting to make additional $5,000. But it's what impact can we really create in their lives that when they leave, you know, our mentorship program, their life is just completely transformed and they are transformed. That's what it's really all about for us.

Delia

17:33

And I think that's fantastic, is like my very first time in all these times hearing about mentors hearing, like the kind of pipe you take for them, so it's really great, real valuable. And can you tell me a little bit, so what does rental arbitrage mean to you? I know many of our listeners know about rental arbitrage, essentially, like what does mean to you? What does it represent for you?

Melissa

18:04

I just thought freedom.

Zev

18:05

Yeah, well, to me, it represents something that is tangible and something that seems, like an easy, I mean, on the one hand, it's an easy low barrier for entry, so a lot of people can start this. So that can be good or bad, right? For any marketplace, something such a low barrier for entry, it has the possibility of becoming either saturated or as the possibility of becoming, taking advantage of the people doing it, getting in that are not so professional and not taking care of it, but that's like any other marketplace for any business. But the difference here is if you truly care about your business, you truly care about this hospitality and you can really make a lot of good money cashflow from something like this and it's a win-win. So you know, most landlords out there are traditional landlords where they just take a long-term tenant, and they just want to collect the check, which is great. We act as a long-term tenant, but where we act differently than a long-term tenant is that we really care for their property, we turn their property into our business. So it becomes, so for me what I love about arbitrage is, it's a win for the landlord, when you have really good tenants like us doing that business and it's also a win for people that are not sure what to do with their life to make good money, you know, and it's something that I definitely recommend everyone trying out because you can make cash flow really quickly and the return is really high and then you can use that money towards something that you really want to, which for us is real estate.

Melissa

19:38

We've created relationships with our landlords that now they're at the point whenever they have any vacancies, we're the first ones they reach out to and they've also become our mentors. A lot of our landlords, they've multi million dollar portfolio of real estate and that's the goal, right? Ownership a real estate is the goal. And so we have created such good rapport with them because of how we function as a business and how we take care of their properties. So they've always told us like, "Hey, we're just a phone call away, if you ever have any questions on buying a deal or financing a deal", and so they become mentors.

Delia

20:16

That's really good! And what can you say about, there must be out there, like some people who have tried the rental arbitrage model and it didn't work for them and it also like traumatized the landlord, how can you approach a landlord that has not had a good experience with someone who previously did rental arbitrage on their building?

Zev

20:38

Yeah, well, I would say, that also still goes back to sales, which is what I mentioned, right? So obviously, you always want to build rapport when it comes to sales, so you can try to get them comfortable with you in a short amount of time. And then you want to try to open them up as much as you can and ask them "Well, what was your experience with the previous person that ran that business, that ran their business similar?" and, you know, maybe they'll say it was parties or whatnot, you know, whatever the thing is, you want to try to overcome it and it usually comes down to separating ourselves from them just because they have the same business doesn't make us the same, right? Nike and Adidas are completely two separate businesses, right? They, I mean, they can compete and sell the same products, but they do it differently, right? Or Puma, and Nike, they're different. Reebok and Nike, I mean, you can already see the difference in the shoes in your head, Reebok and Nike, just from what I mentioned them. So we're not the same, just because there's a bad apple in the bunch doesn't mean that we should be treated the same, right? When I worked in a real estate office,I don't know what's a really common real estate firm name, like Keller Williams is a common real estate firm. Everyone that works in the real estate office runs their own business, so if I have a bad experience with an agent at Keller Williams, that does not mean that the agent two doors down from him in the same office is going to be just as bad, you know, they might be running things completely differently and they deal with their clients completely differently than the one that I had an experience with. So yeah, you know, unfortunately, because I mentioned the arbitrage in business is a low barrier for entry, you do get a lot of people that are not professional or don't have any experience or are not trained and they leave a bad taste in the landlord's mouth. So it's kind of impossible to have overcome those landlords objections, but it will be a little bit tougher.

Delia

22:34

Yeah, I understand. I completely understand. So can you give us a little bit of intro to your mentorship program, so the listeners can have an overview and visit your media if they like it?

Melissa

22:47

Yeah, so our mentorship program is called Host Life, it's a 90 day mentorship program. So in those 90 days, you have again, a course with videos that focus on role playing, focus on the pitch, focus on overcoming objection, just a really big emphasis on sales. And then we have an next section of the course, which really focuses on communication and hospitality because again, like the examples he was giving you, every business is different. Airbnb is the hospitality game. If you're not giving a 5-star hospitality to your guests, you're not going to be in this for the long run, right? You get to really create a business where you're going to have returning guests and build a brand. And so we really focused on pretty much teaching our students how to develop that hospitality way of talking to their guests. And then we have a big focus on design as well because in our experience, when we first started this business, we didn't know so much about the structuring or design of our business, so we created, our first Airbnb pretty much looked like a hospital. And now we have a big focus on design and we seen that whenever we started an Airbnb in an area, we are the highest comp, we are the highest priced Airbnb, with the highest occupancy and highest rating as well. We've been super hosts 17 times. So not once since we started this business, have we not achieved super hosts. For those of you guys listening, if you don't know what super host is, is pretty much the way Airbnb rates you which is quarterly and you're supposed to pretty much meet a certain criteria for them and a big one is on the reviews. And so we've been super hosts 17 times since since we've started, so we are very competent that we know what we're doing and we really teach our experience to our students in regard to how they could also create a business that's going to be in the long run and they will be super hosts as well. So yes, in 90 days, they get the course and then we have weekly classes. In those weekly classes we covered different topics, and then we open it up for Q&A, so they were able to support them on one on one basis. And then they also have access to our private Facebook community, which we build a little community where we support each other. And anytime they have any personal questions in regards to their journey, then that's when we support them as well, on a one on one basis as well.

Delia

25:23

So the whole program sounds amazing! One last thing that I would like you to talk me about is your success rate, what are some success stories that you've seen from your students?

Melissa

25:36

Yeah, so our success rate has been 100% since we've started this a year ago, so I think it goes to show because I totally like, we have an application process that we have people fill out and then we get on a phone call with them. And we only will accept someone that we know we could really help, okay? We're not just going to take anyone that wants to enroll into our course. But if we really feel that we could help you and you really already just have that strong desire to be successful, that's what we're looking for. If you have that strong desire and you're really willing to be teachable and coachable, and do everything we're telling you to do, and follow our formula, you will be successful and we will be your biggest cheerleader and hold your hand throughout the journey.

Melissa

26:02

That's sounds fantastic! So that will be it for today. Thank you a lot for your time, for being here with me.

Melissa and Zev

26:39

Yeah, yeah, thank you. It was a pleasure. Nice meeting you. Bye!

Delia

26:46

Thanks for listening to Into The Airbnb. Were looking for hosts and other people in the short-term rental industry to interview. If you have what we need, and would like to share your experience in this podcast, please send us an email. All the info is at the end of the description.

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