How to Make Your First $20k with Airbnb

Have you ever wanted to own a ranch but actually make millions in profit off of it without really spending millions? That's what we're here to do. We're going to go harass my friend Sam Parr. He built a company, sold it for millions and millions of dollars. It's called the Hustle. Now, we decided to buy an Airbnb ranch and profit off of it, and he's hacking his way to his first $20,000 in revenue inside 10 days of owning the place. So if you want to hear the dirty details but not have a totally filthy dog like this guy come along for the ride, this is going to be fun. We're going to figure out how do you off of having a huge piece of land like all of us millennials are into these days. But there's only one thing you need. But there's only one thing I want to know. I have always wanted to own a ranch, but I hate the idea of it bleeding money nonstop. So I want to figure out how to own a ranch and have other people pay for it. You think we can do that? I think we can do that. Are we ready to harass this guy?

Hello.

What's going on, man? Come on in. Let's check out what he's got going down.

All right, here.

Sam, you started the Hustle Media company. Millions of emails, you know a lot about online marketing and hustling. But then you decided to buy a ranch and turn it into an Airbnb, and you've already made thousands of dollars in sales. What's the thought?

Yeah, probably 20 grand. The thought is I'm really good at starting stuff. Whenever I get energy with something and I get obsessed with something, I have to act right away. And if I act right away, I get locked into it. And I can usually make it pretty great because I get energy from doing this. And so I didn't really know too much about this. I used air DNA. I built a really nice model to see if this could work. And I thought I protected myself really nicely with the downside because this area is growing quickly. My upside, I'm like, man, I think this property can do like 25, maybe even one day, 30% returns. Worst case, I'll just sell it and probably not even lose money. But if the best case happens, or even the medium case happens, then I now I think there's a world where I can just do this, but in loads of different locations and build up $100 million plus portfolio of these. Texas is growing like a weed. Like, there's Going to be more and more and more people coming here. And this is kind of like the Napa Valley of Texas. It's called Hill country, and it's Texas Hill Country. It's where there's a ton of wineries and. And I just think that more wealthy people are going to want to spend more time out here. And so I was like, I'll just sell it if I suck at this right now.

What are we doing? What is this thing?

I bought this from the guy who built the house. He used to hunt on it around this area. I'm going to build cabins, and I want to put them on a tower this high because the views are freaking awesome. And this is a thing that he would sit on top of and hunt. I guess. I don't know. I guess I'll do it. I don't even. I don't know anything. When's hunting season? I don't even know.

Tech bro to hunter.

Yeah, I don't even know. Whatever it is, I'll figure it out. I'll do it. I went and bought a gun the day I bought the place as a gift for myself.

That sounds very Texan of you.

Yeah, I'll figure it out.

Let's talk about, like, some of the weird hacks you did for this place. So first of all, you didn't just buy the house you bought or the house or the land. You bought some other stuff with it. Like what?

And so when we bought the place, I gave them their asking price, but I also said, just take your clothes and leave. Leave everything here completely furnished because things are taking forever to ship. So I was then if I bought it empty, I was going to have to wait three months. So I was going to have to pay three months, four months of mortgages until I actually got the thing cash flowing. And then the second thing is I made them build a fourth bedroom, which is probably 30 or $50,000 worth of work. And then I also have a huge shipping container out there. And I made them paint a Texas flag on there so people could take pictures in front of it.

That's what we call your Instagram worthy moments. The other thing that I was. I thought was cool is you did some, like, testing basically of the Airbnb before you bought the Airbnb, which I've.

Never heard of before we actually closed on the property, I had it on Airbnb and we were already getting bookings. And so I was like, all right, this is kind of interesting. Now. My math on it is I think this property, as is with without improvements will do around 200 to $250,000 a year in revenue. I went and found the growth rate and it was like 4% a year. So then if I do. If I do about a quarter of a million a year in revenue, that brings my IRR to like 25 or 30%. Then the way you really make money, buy a home on a big property that's already cash flowing, and then I build more units on there. And that's going to require a large amount of capex, but that's where I'm going to make a lot of profit.

I think you've hacked a bunch of different businesses and side hustles, but you didn't know that much about Airbnb, so you did something that I've never seen anybody do that started in Airbnb with what? Do you know what I'm talking about?

No.

The Facebook group.

Oh, yeah, yeah. That was sick. I tweeted out, like, who follows me and is interested in short term rentals? Str what they're called. That's Airbnb. I just said, like, who's interested in that? And who owns a bunch and has a cool story? And I got like 3,000 replies. It went like crazy viral. And I created a Facebook group and I got like three or two thousand people who joined it. And then as I was like learning about this thing because I was the owner of the group, every time I posted, they got notifications. And so we had some guys in there that are doing $20 million a year in revenue with short term rentals. And we've got other people that have like 50 to $100 million portfolio. And I would just post and they're like, here's what I'm thinking about doing is my math right? And they're like, yeah, your math sounds good.

That's brilliant.

You bought the house for what, 1.7?

Okay. And then you charge what, per night? And how does that vary based on season?

So right now we're getting into the high season, and that will go until maybe October. The prices change depending on the day of the week. So Thursday to Sunday, it ranges from $1000 to 1200. And then the weekdays are gonna be are, I think, four to 500.

What's like the average occupancy that you think you're gonna have?

When I made my numbers, I assumed 60%, which is basically just about every Friday to Saturday, Sunday. And then with the occasional, which has already happened, someone books like 10 days.

I like it. The other thing you did that I thought was fascinating is the Yelp situation.

Yeah.

So how did that work? Did that actually work? Was that a good idea? Shitty idea.

Yeah. So basically I created a Google listing, a Yelp page. This is why I named it.

So, yeah, it's Marathon Ranch. Wait till we show you guys the.

Sign called Marathon Ranch. When people take pictures and post on it on Instagram or whatever, I want it to say, like, we areathonranch. And I'm trying to get more traffic that way. And then we also have a website, marathonranch.com I don't know if this is.

Real or it's just stuff all of our friends are talking about. But basically, myself included, we've all bought land, like all over the place. And we basically have no business buying rural land. Most of us, like, we don't know anything about it. And it's like this gentleman farmer idea. What's the deal? Are a bunch of your tech bro friends buying stuff everywhere?

Well, a lot of. So here I tweeted out that I just did this. That tweet was viewed by 2 million people. So many people reached out because I think I can only speak from a man's perspective, but every man, I think, like, wants this. They want like a piece of property that they can like do whatever. And so I do actually think that this is what a lot of people want. I don't think it's getting as popular, but what's happening is that with COVID the B, C and D level cities like Austin, Denver, New Orleans, other places like that, I think that they're getting more popular. And then the outside areas of those cities are getting more expensive and more desired.

How to know where to buy. You were looking all over the place.

I looked all over the country. So a lot of people are like, oh, you know, right outside New York City. That's a great place. But there's like so many laws around what you can and cannot do. And you got to look at two things. I think you got to look at what the actual laws are. And then you have to look at the second thing, which is like, what's the government in that area like? And are they like maybe gonna ban this or are they gonna make it harder to have short term rentals? And so saying Republicans versus Democrats a little bit. So typically you could. That's not the only way, but that is a correlation. And so in Texas, I'm gonna eventually buy these all over the country. I'm definitely gonna get them in New York as well. And I'm gonna, I'M looking in Pennsylvania, all over the place, but Texas, like it's known for, like, you don't touch our land, let us operate how we want to operate. And so I was like, well, that's a great first place to do it. And so that's why I did it here.

You're also close enough, you're like two.

Hours from this, which is actually a feature. If the economy goes south and let's say that people would be flying for travel and they're not flying anymore, then they need to take their family to like a three hour vacation. That's like a quote getaway being about two to three hours. That's the perfect getaway. And so in my opinion, because this home is so big and the price per head could be potentially cheap, like $100 a night. Potentially. I think that I was trying to look out for the recession as well.

Yeah, it's smart because I think. Well, two things. One thing that makes me nervous about Airbnb is all of like, meh, proper properties probably are going to get murdered during a recessionary period. There's way too many of them. And then the hyper, hyper, hyper luxury places probably won't get hurt because rich people are still gonna have money regardless. And I think that like second tier, you know, it's nice, it's got something unique, but it's not out of range. Will also probably do pretty well too.

Yeah, I think unique is the most important thing.

Yeah. If you bought this place for $1.7 million and you put a couple hundred thousand dollars into it, but you get 250 to a million dollars in revenue a year once you have the other locations. I mean, your break even point is ridiculous.

Yeah, it's awesome.

You could have a break even in three to five years.

Basically your equity would be paid off. And now you own something that, I mean there's, I think there's a world where you own this for 20 years and you're sitting on something worth tens of millions of dollars.

What are like the downside risks? Anything keep you up at night?

Is there a way I can lose all my money? I think the chances are incredibly low. I think it's a pretty low, low risk thing though. That's my thing. The upside I think is like 2 or 3x in like 5 or 10 years maybe.

So over there is basically where you're gonna do these crazy. Oh, you can see it, these high rise houses and they're gonna look out over this is like painted rock, Enchanted rock.

So that's a pretty famous State Park. So we're about four miles from that. And being able to see that, a lot of people like that. So we're right by enchanted. Enchanted Rock State Park.

Do a lot of people go there?

Yeah, yeah, yeah. Like, you need a reservation, and it's always sold out.

Interesting. And there's probably no lodging right around it.

No, it's this.

Oh, that's so smart. Could you. Could you just allow camping from, like, that other road access?

Yes. I also have to build a road. We went through here in a golf cart that has thick tires. Your Jeep could maybe do it, but I don't know if it's wide enough. And a Camry definitely cannot do that. So I got to build a road?

Yeah, you got to build a road. You got some work to do, man.

I know.

Like, get to it. I don't know what he's doing around here with us, but I hope you guys appreciate that. We're going to link a bunch of the notes in the bottom and a bunch of the stuff that he talked about, like air DNA, how to do this whole deal, and maybe you can compete with this guy with your own ranch that makes a couple million dollars a year for you. That sounds pretty good.

Bring it on. It'.