A lot of you reach out, asking if I can help review a property that you’re interested in, or if a market makes sense.

And as much as I would love to, it takes a lot of time.

So I’m really excited for our guest today, John Bianchi.

This is what him and his team do, and we’re gonna dive into the details.

Everything that you need to know to find a profitable property in 2024 and 2025, we’re gonna cover what makes a property profitable, what amenities you need to use, and what you can live without.

We’re gonna talk about what good data looks like.

So if you’re using some data tools to help underwrite or analyze a property, well, not all data is the same, right?

And so I’m really excited to jump into that, as well as some properties, some markets you should avoid, when you know that you should actually pull the trigger on a property when it makes sense to sign on the dotted line.

I’m really excited.

Stay tuned.

You’re gonna learn a ton.

And if you’re looking for a property out there, believe me, you’re gonna want to hear these insights.

But would you say it’s safe to say then, that let’s say you’re looking in a market and the anchored sort of price is 80,000, you know, it’s like very realistic that you could get 80,000.

But there’s also properties running for 120,000 that are sort of similar size.

Maybe they don’t have all these nice to have amenities, but just knowing that there is more of a variance in the price in that market, would that make you more inclined to go for those nice to have amenities?

Yeah, so that’s what I refer to as a luxury demand within a market.

It’s, I thought about this a lot because I was like, why is that one market not performing, whereas the other ones are right?

Like, what is the what’s the one metric that might be different here?

I call it the luxury demand.

And so if I’m going to go into a market, I want there to be properties that are luxury that are performing better, significantly better than I ever could.

Because that tells me that there’s people going to that market that are willing to spend an arm and a leg to stay at some of these listings.

And most of the time, luxury listings suck.

Like, they are beautiful properties, not the best listings.

And what I mean by that is, we like to create sort of like, I don’t want to say mini resorts, but we want to try and add as much value and fun to the property as we possibly can and try and have all the different amenities that you can add in to like really give people a lot of entertainment while they’re there.

So they’re having a ton of fun, which is what a ton of people are doing nowadays, right?

Whereas a luxury property is kind of banking on the fact that they’re luxury to be able to get those really high nightly rates.

And what I’m banking on is that they still believe that and they keep doing that.

And then I’ll create a listing that’s a whack load of fun.

And then the people who were going to stay at the luxury listing decided it would be more fun to stay at ours because there’s more things to do, even though it’s not a luxury kitchen that they get, it still is going to be way more fun for their vacation that they’re going on.

And so then therefore, they booked at our home over their home.

And the pricing, like they’re already willing to spend an arm and a leg to stay at the luxury property.

And so for them to then transition over to ours and we’re a little cheaper, but we have way more, we’re still going to get a way higher nightly rate than if that didn’t exist, that luxury property didn’t exist in the market.

Does that make sense?

Yeah, yeah, yeah, I gotcha.

Yeah, it’s just good stuff.

I’m thinking also about, you know, and I agree, we see luxury listings all the time where it’s just like, oh my gosh, you guys are dropping the ball.

You know, you’re literally leaving tens of thousands of dollars on the table because you’re not doing X, Y and Z.

And a lot of that comes back to visibility, right?

And so I’m curious just to hear, I know we could talk for like hours of stuff, super interesting to me too.

But we know that visibility plays a huge role in how much a property actually earns.

You know, if you have the pickleball court, and you have the pool, and you have the volleyball court, and you have the jungle gym and all that, but you have a 3.5 review rating, and you’re on page 97 of Airbnb search results, like you’re not going to do very well.

But if you don’t have all those things, and you’ve been knocking your guest experience out of the park, you’re very likely going to be up there at the top of those search results.

And so even though you’re maybe not a nicer property, more people are seeing you, and your chances of getting booked are higher.

So how do you guys think about the visibility piece of a listing, how that affects the actual returns?

So I have spent the past three years just focused on the acquisition side of things, and not the management and ongoing part of it.

So I would be not the right person to dive deep into it.

I could get my two cents though.

So what I have tried to do with my knowledge that I’ve acquired is to give people a fighting chance, right?

Like give you the opportunity to be a good host and understand how to do all these things.

And then if you execute, you’re going to, you know…

If you are executing really well as managing it well, and then you’re growing up against somebody who doesn’t have those things, then it just becomes kind of a no-brainer for the guest of which one they decide to go with, technically.

But what I would say is, because I know…

So there’s somebody else on the team, in that Tech Vestor team.

I’m just contracted with them to help them find properties, but I know the team really well.

And what I used to do back in the day, and what I’ve helped with them as well, is using RankBreeze to be able to see exactly where you’re being listed.

And then Danny, Rustin, I know you know Danny as well, been using his tricks since 2018.

All the little tips and tricks of how to get your listing to optimize better, and to show up better.

So, what I do know is that they try their best to be a good host.

And then on top of that, keep track of where they are listed in the page ranking.

And if one is hurting, giving that one extra love to try and get it back up, because you can see it dip.

You go from page one to page nine, you see your revenue dip quickly, right?

And so then they put extra work into that by optimizing it to get it back up.

That’s as deep as I can go on that.

Okay, awesome.

Well, yeah, there really are, there’s a whole bunch of crucial elements to this, right?

I mean, the first piece is just making sure you have a property that has really good potential and that’s cash flowing.

You’ve underwritten everything well and you’ve set it up well.

But we can’t really stop there, right?

I mean, that’s where the journey begins.

And that’s where properties can really start to outperform others is by making sure they’re doing a good job managing and looking at all these things like, you know, visualizations.

And yeah, for anyone that missed it, we did have Danny Rusty on the show.

I don’t remember how long ago it was, but he’s a good friend.

He runs Optimize My BnB.

So go back and check that episode out if you missed it.

Okay, John, so really good stuff here.

I did a podcast last week actually on what makes a market risky, my opinion, you know, and I mentioned Medellin where I am at the moment and how it’s really become sort of oversupplied.

I don’t want to like tailor your response here, but I’m curious to see what your opinion of a risky market is and actually one step further, what type of properties you would actually avoid.

Good questions.

What I would consider a risky market?

And you talked about a few things already, the regulations.

Yeah, yeah, I’m trying to think of this, because what you framed it is around the idea of saturation, right?

Like almost an oversupply of properties within the market and that causing it to be a not ideal market.

My honest opinion is I like saturated markets.

A saturated market to me says there’s a crazy amount of people that want to go to that market, like a lot, right?

And a lot of people are putting up properties within that market because they know that they can make money there because people are willing to stay there.

And we’re in the travel industry, and travel demand is step one, right?

It’s like, do people actually want to go here?

Yes or no?

And it’s like, yeah, they really want to go there.

Then I get intrigued by those markets, and the next thing I do is try to figure out how could you win in this market?

Like, is there truly a way to be able to dominate over everybody else?

And that usually requires more money to be able to do so, right?

So I’m trying to think, there’s kind of a couple things here because I do like a saturated market.

However, there is a breaking point, right?

So Kissimmee in Florida, where Disney World is, without a doubt, crazy oversaturated, and no matter how great your listing is, it usually is not going to perform all that well, or however well you want it to.

But there was a really long time where people were putting together these like extreme themed listings and making three to $400,000 from their properties.

And then two, three years later, there’s so many more of them that the revenue is starting to dip quite a bit.

It’s interesting because if you caught it at the right time, you were making bank and then you can 1031 exchange out of that property.

It’s appreciated over that time period and you go to the next market, right?

You can do that in Airbnb.

It’s a bit of a lift.

But as long as you didn’t put too much money into the property and you cash flow well enough, then you would have made a return and you could kind of keep moving on.

Sorry, my brain is going everywhere with this question.

Because my first response was like, I like a saturated market.

Then as I was answering it, I was like, oh, wait a second.

I would never go to Kissimmee or advise anyone to go there because of how saturated it is, right?

And it makes me worried that maybe there’s other markets out there that have hit a similar thing.

I could name a couple off the top of my head that I’m thinking of.

So you almost have to find one that’s, yeah, I guess there are markets.

Markets that I avoid are markets that can’t cash flow.

Let’s talk about that.

We already mentioned that, right?

Because you need the property to make money.

And then on top of that, if you realize that the people who are putting an arm and a leg into their property, like they’re really, really nice, but they’re not hitting really high numbers.

And the purchase price of the home is not that great.

Then you’re kind of realizing like, oh, this probably isn’t the place to be.

A good example would be Maggie Valley.

So Maggie Valley, I think it’s North Carolina, just outside of Asheville.

It’s about an hour away from Asheville, and it’s its own little spot.

The homes there are beautiful, beautiful views, beautiful cabins, all this stuff.

But the max revenue that I was seeing from some of these properties was like $120,000.

And I’m looking at it like this just doesn’t make any sense here.

I mean, so in other words, there wasn’t a lot of money being made there.

I don’t know if it was from oversaturation or just a lack of demand or combination of both, right?

Like there’s just not that much demand and there’s kind of too many, even though it’s a smaller market, just too many for that market.

I don’t have a perfect answer for that.

I apologize.

Yeah, no, no, this is fine.

I mean, I think the most important thing is that we look at the numbers, right?

And then the numbers tell us what to do.

And so if a market is saturated, yeah, it could be good because there’s a whole bunch of demand going there.

But if it’s also raised the prices, you know, 50%, it doesn’t cash flow anymore, then you probably don’t want to keep looking in that market.

So no, I like that answer.

It’s good insight.

Could I refine that a little bit?

Absolutely.

Now that we’ve gone through it.

What I would say now is I like a saturated market as long as I can see that there’s still opportunity.

And at least for the next like three to five years at a minimum.

So I like that there’s a lot of demand.

I like that.

I’m not scared by the competition because I logically know how to analyze the data to figure out how to win.

And if I can combine those two to be able to say like, oh yeah, there’s money to be made here, clearly, as long as we do XYZ, then I would feel comfortable going into that market.

And if it’s over saturated, you avoid it.

So it’s almost this sweet spot where you’re finding a place that has a lot of demand, but isn’t like fully built out in a sense.

Sorry, go ahead.

I was just going to say, just to end off.

Maybe we’re on a time lag here, but basically it gives you a base to build up and show that you’re a good operator, and then you can start building that visibility.

And when more properties come in in the future, you’re less affected because you’re already sitting really well and search results is what I would say.

Yeah, definitely.

If you have a small budget though, I would avoid that strategy.

Yeah, me too.

Okay, so with all that said, any super risky markets that…

Or could you name like three markets that maybe you guys have visited and you’re like, oh man, I would never invest here.

Anything come to mind?

Yeah, I don’t want to say them.

I’m going to hurt some people’s feelings.

Okay, so I’ll say Blue Ridge has been off my list for quite a while.

It’s mainly the…

Let me just put it in a full category because anyone who’s been doing this for a bit will kind of know.

And I mean, I’m sure you can pick a couple off top of your head.

But anything that was COVID heavy, so any market where everyone was excited about it during COVID, I think those locations were just a gigantic mistake for a long-term play because we weren’t going to stay in COVID forever.

And times are going to go back to normal.

And if you could just have the foresight to see that, then you would have been like, this market is not going to keep up with the amount of demand when everyone’s able to go back to cities.

And so then therefore, you wouldn’t invest in that market.

And Blue Ridge is a great example of that where the demand skyrocketed and then plummeted like crazy.

But the home prices increased a ton to go with it, and those have not plummeted.

So technically, there’s a lot of people out there that if you bought a property in 2020, 2021, you did great.

But if you then hopped on the bandwagon in 2023, you’re buying an overpriced property in a really bad rental demand market.

Yeah.

Yeah, I’d agree.

And that’s what we’ve kind of seen on the back end to managing a bunch of properties now.

So great insights there.

Okay, gosh, we’re already…

There’s just so much to talk about when it comes to it.

It’s such an important decision, too, buying a short term rental.

And I was thinking about this too, as you were talking, a lot of these things, we’ve been doing more with boutique hotels lately.

We had a really good interview with Blake Daly.

So for those of you out there, yeah, go back and check that one out.

You know, a lot of the things he was talking about in terms of like amenities, basically exactly what you guys are recommending in the short terminal world, we can do in the boutique world to kind of add value and differentiate ourselves.

Yeah, honestly, boutique hotels intrigue me a ton.

I don’t think Airbnbs are dead.

I just think boutique hotels are intriguing because they sell based off of the CapEx, right, or the net operating income, sorry, and not the CapEx.

They sell based off of the net operating income and they sell as a commercial property whereas a single family home doesn’t.

And so if you can increase the nightly rate by adding more value and making it more desirable and creating an experience, the return on the total value of that property skyrockets.

I’ve been toying with that idea for a while.

I live in a little beach town and there’s like five motels slash hotels that are right along the strip of the beach.

And I just look at them, like these are so old, like legacy properties.

I’m like, I could go in there with, you know, I don’t know how much dollars, but enough money to just revamp all of them.

And they’d be worth twice as much, you know.

I’m making up those numbers, but it’d be worth a lot more very, very quickly if somebody was willing to buy it, obviously.

Yeah, a ton of opportunity.

It’s an exciting space.

We’re diving in head deep as well.

Okay, so yeah, we’re, there’s, I feel like we’re gonna have to have you back on the show to John and something.

Cause this stuff’s always changing too, you know?

I mean, when I started the podcast years ago, things were much different than they are now.

So, but you gave us a lot of good insights.

Going back to the data to start with, make sure that we’re looking at good data and we’re underwriting our properties properly, you know, deciding if a market’s actually worth deep diving into based off the revenue estimate and the purchase price and you’re kind of going for that 20% mark.

We talked about amenities, the must have amenities if you’re gonna compete in a market, especially if all of the properties have these amenities and it’s very likely you have to have them as well.

And then you talked about the nice to have amenities, which are really hard to evaluate how much money they could actually add.

And then, you know, there’s the whole sort of sub-component of that is how much extra visibility might you get by having all of these amenities, but that’s more on the operating end.

We talked about some properties to avoid.

You mentioned a lot of the COVID places that got a lot of headlines are now some of the most difficult markets, and I would agree with that.

Regulations, you talked about a lot of risky things to keep an eye out.

So with all of that said, really, really good information.

What makes you confident to pull the trigger on a property?

Or how do you know when you’ve really found a market and you found a property that makes sense to acquire?

I’ve dedicated years and hundreds of thousands of dollars through trial and error to figuring out how to manage my personal portfolio remotely.

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Yeah, it’s not easy.

So let’s just start off with saying that.

So anyone who thinks what I’m about to say is easy, it’s not.

It takes time.

But if you can do it, you have a whack load of confidence.

So I will find a market that I think cash flows, using that price to rent ratio that I talked about, and then I’m going to build a buy box.

Meaning that I’m going to study every single Airbnb in that market, and I’m going to figure out what drives revenue for the market and which properties perform best.

Okay?

Avoiding luxury, avoiding unique.

And I’m going to then be able to understand what my property needs to look like, how many bedrooms, bathrooms, if it needs to be a cabin or not, if it needs to have a backyard, if it needs a pool, if it needs to have a pickleball court, all of the things that it would potentially need to be able to make X amount of dollars.

And I will have a good understanding of what that amount of money would be that it could make, right?

Let’s say 100,000 to 150,000, it’s going to fall within that range, as long as I do all these things.

Then I have this sort of list of all of the things that the property needs to have that I’m going to go out and buy.

And so then I’ll start looking on Zillow for properties that match up with that.

And what I’ll do is I’ll try to find the property that’s on the market that meets the majority of these requirements for the cheapest price.

And what I’ll do where I get a lot of my confidence is from two specific things.

Obviously, building all that out is going to be a really big deal.

The next step is underwriting a bunch of different properties that are for sale that kind of meet that requirement and just repeating that process as a practice within that market.

And the reason I’ll do that is because I want to find the average or yeah, I want to find the average in that market.

In other words, if you have a certain buy box and you’re like, I’m looking for four bedrooms that meet this criteria within this area around $500,000, and you want to write 10 of them, you’re gonna realize that the cash on cash is gonna be roughly the same almost every time, okay?

But then you’re gonna come across a property where the cash on cash is actually gonna be quite a bit higher.

It’s gonna be maybe 5, 10% higher.

And that to me is like, that’s when you know that’s the property that you pulled the trigger on.

Because you’ve analyzed the entire market, you know it works, you know it doesn’t work.

You’ve analyzed a whole bunch of properties for sale, you’ve kind of find the average, and then you found the outlier.

And once you see that outlier, that’s where you’re like, oh, that’s the property we should go for, right?

We’re not gonna see this one again.

And so that to me is like the most straightforward way of being able to get a lot of confidence.

It takes a ton of time, but you get a ton of confidence.

And then on the back end, one other sort of little trick that you can do that maybe doesn’t take as much work is if you come across a property that is not a good listing, like it’s got bad photos or it’s not optimized well, or it’s got like a lot of gray bedrooms, you know, whatever it may be.

And it’s making like, let’s say $80,000.

And you have a property that you’re about to buy and you’re like, if my property just did as well as that one, I would be okay with that.

And if you can see that, because you’re like, I’m definitely going to make mine nicer, more fun, more amenities, more X, Y, Z.

You go, as long as I just do that, I can do better.

You know what I mean?

And so if that’s my base, if that’s my base, I feel confident to pull the trigger.

And if you can get a combination of both of those things I just mentioned, you just get an abundance of confidence to be able to pull the trigger on a property and move forward.

Awesome.

Great points.

I know there’s some people out there thinking, oh my gosh, how could I possibly do that for all of these properties?

And luckily, that’s what you and your team do.

And again, we got connected sort of through the back door where a partner that we’re bringing on to manage their property ran through this exercise with you guys.

And I saw the report you guys created.

And I know that you have, you guys even take it further than that where you can connect people with real estate agents and really do the whole process.

One thing I just want to mention real quick before you let everyone know where they can find you is that when you’re going through this exercise, and let’s say you provided a report for someone, they have this sort of base level information.

Let’s say the property didn’t work out.

They really wanted it, but it got bought out by someone else.

Well, at least you have that base of all that information.

And when you see a new property come online for sale, you already know, like, okay, this property is worth looking into a little bit more.

I’ve already ran my numbers on here.

John and his team have already done it for me.

So I know if I add this, or if I know if I do that, it just gets easier and easier until you actually pull the trigger, so.

I was gonna say, I used to get super bummed out if we missed out on a property.

I’d be like, oh my God, we missed this huge opportunity.

And then the next day, another one would pop up on the market that was like just as good, if not better.

And I’d go, oh great, you repeat that over and over and over again enough times, you’re just like another property is gonna show up.

It’s not a big deal.

Totally.

It’s happened so many times in my investment history too.

You know, like you’re super bummed and then something comes out and then you’re like, oh my gosh, so happy I didn’t buy that other property because this one’s better, you know?

But we know we can’t get any results without action.

So we have to get in there.

John, your company, STR Search, we’re going to leave a link so everyone can find you guys easier.

But what’s the easiest way to connect with you and your team?

You can go to strsearch.com and schedule a call.

If you’re looking to acquire a property, we can help you with that process.

We’re really, really good at it.

So if you’re looking for any help with that, just reach out, schedule a call.

We’ll explain how the whole process works.

If you are not looking to do that, I just want to let you know that I strongly recommend you go to my YouTube channel and just go through the free content that I have.

I’ve made a ridiculous amount of educational content.

I’ve got six free Airbnb data courses.

One of them is 40 hours long and I didn’t build it until I found 120 plus properties.

And then I gave away the entire process.

So it’s there if you want it, right?

It exists if you want it.

If you want to go through it yourself, you can.

If you want to hire us, you have that option.

And that’s how I built up the business.

Awesome.

And in your YouTube channel, is it John Bianchi or what’s the name?

If you just type in Airbnb data, you’re gonna see my mug all over the place.

But if you type in John Bianchi or the Airbnb data guy or anything along those lines, you’ll come across me.

Okay, awesome.

Well, thank you so much for coming on.

I know I get asked all the time about properties, like, hey, what do you think about this property?

And as much as I would love to dive in the details and try to help as many people with my personal opinion, it’s just not realistic.

And so if you’ve been listening out there, I think you’ll have some better insight into what it actually takes to find a good property.

If you don’t want to do it on your own, reach out to John and his team, check out his YouTube channel.

And John, thanks again for coming on.

And I hope that we can have you on again in the future as sort of dynamics change and the whole industry just keeps on moving.

I’d love to, honestly, as you kept talking about this, I’m like, I think we could go deeper and even like more nuances.

This will be like a part one and then part two will be just the nuances and the fun stuff.

So for sure, for sure.

Well, thanks, John.

Thank you.

And talk to you later.

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