How to Navigate Airbnb Regulations: Expert Tips from Emin Muhammad

Dylan Silver (00:00.898)
Hey everybody, welcome back to the Real Estate Pros podcast by Investor Fuel, the nation’s premier real estate mastermind. I’m your host, Dylan Silver, and today on the show we have Emin Muhammad, the founder of Colbyco LLC with a business, technology, background, computer scientist, real estate investor, and graduate of Pace University and New Jersey located close to my home. I was raised in New Jersey. Emin, welcome to the show.

Emin (00:26.32)
Bye.

Emin (00:31.584)
Hey Dylan, thanks for having me and I’m so excited to be here at the Real Estate Pros podcast. And yes, we’re both fellow Jerseyans. Although most of my homes are in greater Boston area, but that’s another story for later on.

Dylan Silver (00:45.314)
I didn’t tell you this, but I lived in Boston for six years. Very cold city, that’s why I’m not there. Very, very cold. Were you living in Boston for a while?

Emin (00:55.596)
Yes, yes, well my office was there and my, I had a relationship and my partner was out there and my job. worked for the state, for state government for a number of years. So for the Commonwealth, we developed software, the welfare system. and it’s not called welfare system anymore. It’s probably not since the nineties, but I’m dating myself. We won’t talk about that.

Dylan Silver (01:16.046)
What years were you there roughly? Because I feel like you were there was two Bostons. There was the Boston before the Red Sox won the World Series and then there was the Boston when every single team was winning. You had the Celtics, the Patriots, the Red Sox, the hockey team.

Emin (01:30.716)
all the above. And so I started way back in 98 and 2004 you’re talking about the nightmare where it all turned around as a Yankee fan, know. So 2004 was not a great year and it’s been downhill every since.

Dylan Silver (01:43.16)
We could talk about that all day. mean, being in New Jersey and all of my peers growing up, they would just say the number of rings and it was always going up. And my dad’s from Amherst, Massachusetts. And so the competition was heavy, but I digress, I digress. I’m sure people here just wanna talk about real estate. So let’s pivot a bit here. Computer science, business and technology. It seemed like that was the…

Emin (02:00.508)
Thank you.

Dylan Silver (02:11.662)
the way that you started out your professional career, how did you get into the real estate space?

Emin (02:18.394)
Well, it’s so funny because like I said, I’m from Jersey, we’re from Jersey, and I started work the latter part of my career. started working with middle part of my career. I started working as a consultant. We will fly around the country building out these multi-tiered systems, sophisticated system, million dollar systems. And we always needed furnished housing. Back in the day, they called it corporate housing and they probably still call it corporate housing. But as a result, I really grew.

I’m fond of the whole model of furnished housing, whether you’re in town for business and nowadays it’s for lease or travel. But what happened is while I was flying around the country, ex-wife and I ended up buying investment properties because both of us got our real estate license. So we moonlighted as realtors. During the day I would develop software and that night I would moonlight as a property manager for my properties.

Dylan Silver (03:11.534)
Wow, this is exciting to me because I didn’t let you know this before we hopped on, but I’m actually in an engineering bootcamp. It’s not a school, I don’t get a degree, but it’s like a year-long course where you put together a portfolio, so I may use that later on. It’s full-stack web development. And also, yesterday at 11 a.m. Texas time, I passed my real estate exam. So thank God for that.

It was not an easy exam as you know and it’s gotten harder I feel like with everything that’s happened. So my path in some ways may may God willing near yours to some degree. Now when you were buying these investment properties tell us about the first deal or maybe the first couple deals if you remember them.

Emin (03:56.305)
Well, it’s funny because when we started buying homes, weren’t, although I grew an appreciation for short term rent or furnished housing, once my ex-wife and I ended up buying homes, we listed them as a rental, a traditional rental, a long-term rental. And, you know, we go to another state and make a long story short, we ended up buying six homes at the time, and they’re all long-term traditional rentals. And then I was reading, this is about,

This is around 9-11, so like 1990-2000. 2001. I was reading an article, not sure if was the Wall Street Journal or Money Magazine. One of the periodicals. And there was this new kid on the block called Vacation Rendles by Owner. VRBO nowadays they call it. It was brought by HomeAway. But it was a mom and pop shop at the time. And they built this website. It was just basically a big billboard. Hey, if you have a home, list it on our website VRBO.

put your contact information, people will call you. There was no real time bookings, was no real online engagement, it was just a billboard. We said, this might be the answer, because we were having problems with long term tenants. know, they weren’t paying, a fraction of them weren’t paying on time. We didn’t have access to our homes then, we had great properties. We had one condo at the time, one of the six homes had a rooftop swimming pool. We had a long term winter in there, so.

How the heck will we have the opportunity to get inside and enjoy it? We didn’t have the opportunity. So after reading this article, we’re like, huh, this might be the way to go. We can double or triple our nightly rate. We’ll only take us, if it’s tripled, 10 days to secure what we’re securing on a monthly basis. And plus, we’ll have flexibility, we’ll have freedom. And so that’s what we do. We took one of the properties and we converted it. We transformed it from a long term to a short term.

And then fast forward 10 years later, left corporate, maybe 15 years later, I left corporate and ended up turning my short term moonlighting venture into a long term full time entrepreneur venture for me. And that’s where I am right now.

Dylan Silver (06:02.85)
Now you mind, were all these properties, the six that you speak of in the Boston area, where were they located?

Emin (06:09.538)
No, they were all over, because I was in Atlanta on a project, so we brought a house in Atlanta. I was in Colorado on a project, we brought a house in Colorado. And so yeah, was kind of all over place. Virginia, brought a house in Virginia, and the balance in New Jersey.

Dylan Silver (06:23.886)
So when you were doing this, sounds like it was, was it early 2000s, the first couple?

Emin (06:29.616)
Yes, early 2000, yep.

Dylan Silver (06:30.904)
Early 2000s, so you know, I’m thinking, you know, pre iPhone, is not, know, the communication is different. How are you managing, you know, your renters and ensuring, you know, maintenance is being done? You know, right now it’s instant communication, but I’m imagining you’re picking up the phone and being not in the state that I’m imagining some growing pains there.

Emin (06:56.044)
yeah, absolutely. There were challenges, especially since we were all over the place. But remember, I’m a computer scientist, so I had a solution in place. And what I created was something called a resource database, a vendor database. And based on category, based on location, we would have a list of action takers, a list of vendors that will be able to take advantage and fulfill the reservations. Because that’s a big part of short-term rentals. There’s a lot of moving parts.

And if you don’t have systems in place, you don’t have organizations in place, it really could be tough, especially if you have multiple properties and multiple locations. And that’s what we teach our landlords now. mean, when I started my company, it was done for you. So as a landlord, you might be a professional by day and you need someone to manage your property. They will hire us.

And now we’re teaching folks how to do it because, you know, we practice in the greater Boston and New Jersey area, but what about California? What about Canada internationally? So now we teach folks how to transform their rental property and how to run operations. Because like you said, if you don’t have vendors in place on call and back then, you know, we just had the internet, we had email, we had phone, which was suffice. The important thing is we had that vendor database, that resource database.

Dylan Silver (08:13.656)
I have so many questions. We could probably talk a whole another podcast just about that. But I want to keep it a little high level so that we we could hit all the things that I have on the schedule here. Going from the longer term rental to the shorter short term rentals and you mentioned Verbo VRBO which has grown of course. But then you get this new kid on the block and I’m curious to hear what what your initial thought was and what you think of their success Airbnb right.

which is all over the world. You know, I spoke with a gentleman last week who’s a younger guy in Miami. All he does is manage the communications and marketing for short-term rentals, specifically Airbnb in the United States, Dominican Republic, Ghana, and Belize. And so that’s his, that’s his job, right? He doesn’t do the cleaning staff. He doesn’t own the, the, the deeds he just manages. So all these different ways.

What was your initial perspective when you saw from a computer science angle Airbnb and what do you think of their success?

Emin (09:18.524)
It’s pretty amazing and it really goes to show you that if you have a great strategic plan in place and you have the finance in, you can really go a long way. So VRBO started back in, I guess it was 2000 when I read that article, so they probably started right before that and again it was a mom and pop shop. They ended up selling that company, probably made a few million selling it into HomeAway, that group, and Expedia is the group.

devaluation nowadays is they probably spend two thousand two million dollars paying off the mom and pop owners and that is worth probably close to a half a billion who knows but i know it’s a lot and so but it’s funny because i started before airbnb vrbo started before airbnb and you have this new jack airbnb come on board and they blowing everybody out the water you know vrbo

Dylan Silver (10:14.573)
everybody.

Emin (10:15.676)
Yeah, VRBO is still a close second, I’m sure, Expedia. But they spent a lot of money to get up and running. But it just goes to show you strategic planning is so important, financing, and having a great plan in place. And that’s why our curriculum, I’m talking about the E, I have two sides, I two tracks. I have the done for you side and I have the E learning side. In both sides, we implement strategic planning.

And from an Airbnb standpoint, I’m pretty sure they had great strategic planning and they are where they are right now as a result.

Dylan Silver (10:49.774)
I was talking about this with a, had a builder on the show yesterday talking about how the service space is ripe for a type of Airbnb disruption. Cause a lot of these contractors are what people are calling, know, Chuck in a truck. You really don’t know too much. You don’t see the job history. Most of it is very small scale. Sometimes you deal with, unfortunately, you know, a little bit of.

malfeasance and they don’t always have the greatest reputation, contractors, but Airbnb on the other hand allows folks to rate the host and the host to rate the guest. And you can also see the ratings, I believe you can see potentially like the number of duration that they’ve been around. And so this is really kind of revolutionary. Uber does a similar thing, I believe you can still rate guests.

because prior to that, when you would go check into a hotel, or when you would go to rent anything, people aren’t able to see your track record, So now it’s like, well, if I have a home and I want to Airbnb it out during the summer, because I’m not gonna be there, but I don’t know if I necessarily feel comfortable with just anybody coming in, you can choose your guest, right? And as a guest, you can choose not just how nice it looks, but based on the reviews.

So even me, you know, when I’m traveling and I love to go abroad, I’m looking at, I can get a hotel or I can go Airbnb and get all these amenities, look super nice. It’s like a home away from home. And I can say, look, all these people, all these Americans booked it.

Emin (12:33.596)
Yeah, that’s a that’s a great point, but it I don’t know if it was so much revenue Revolutionary because I don’t know if you remember TripAdvisor TripAdvisor flip key their claim to fame was really based on reviews and so if they had those what are those magazine copies of

Dylan Silver (12:51.438)
Mmm.

Emin (12:59.718)
TripAdvisor and it really was a rating system. And so what Airbnb did, they copied off the VRBOs of the world. They probably copied off some of the smaller property managers like Kobe Cole of the world. Found out what they were doing right, you know, copied off the TripAdvisors and they put it all into a pot of soup and they stirred it up and they strategically planned and they made everything better.

and made everything more accessible through their system. So I think Airbnb used both a combination of copying, duplicating best practices in addition to strategic planning some of their own bright ideas. So I think the combination really helped them out a lot.

Dylan Silver (13:41.07)
And Eman, to your point, the reason why I love Airbnb and there’s a lot of investors who I work with in DFW who use Airbnb is because the communication is seamless. You’re going from weeks out to communicating to checking in to leaving to if there’s issues. It’s just, I feel so comfortable with it. You’re in the short-term rental space. Is a lot of your students and your business

geared towards the Airbnbs of the world and figuring out how to capitalize on that.

Emin (14:18.104)
Yes, it makes up the one of the pieces of the overall strategy because as if from a strategic standpoint, you never want to put all your eggs in one basket. If you look at TikTok nowadays, where is the chances of going going away? There is a chance. I don’t know if there’s a high chance or but the point I’m trying to make is you never want to put your eggs in one basket. So if you have a strategic plan and that’s part of the mix, I think that’s the way to go. You know, maybe maybe have a

mixture of having your own direct website with your own marketing plan in place take advantage of verbal of the world’s and Once you have that strategic plan and how how you’re going to like if something God forbid goes wrong You have that strategic plan you have that quarterly plan you have what’s happening? Where you need to look down the road because you know when you plan you really have to plan out a year two years five years out

and you have to always know what’s coming before you because that’s the only way you can pivot if need be. If you look at AI nowadays, if you don’t have that into your long-term strategic planning, or even short-term, you’re really going to find yourself on the out. So I recommend the same with using a tool like Airbnb. Make sure you have users to complement your business model and not solely rely on it.

A big part of what we teach is how do you streamline operations? How do you integrate all these different systems? And when you develop software, you want to develop in a component-based way because, or app, because you want to be able to disconnect and plug in something new. Disconnect and plug in something new to keep your operations going. So.

Dylan Silver (16:01.356)
You know, talking about the not putting all your eggs in one basket, I can relate to this. I don’t have any deeds in my name yet, but God willing, I will here someday soon. And before we hopped on the show, we were talking about, you your background and then even on the show talking about your background with computer science and working in that career while also having a real estate license. And I’m hopefully going down a similar path here. But

If you have all your eggs in one basket like some people might with the Airbnb and what happened last year in DFW specifically in Addison which is like a part of Dallas they banned Airbnb and I don’t know if they’ve since changed that or if that’s gone away this is about two years ago 2023 they banned Airbnb it was kind of the talk of the town so you really can’t have all your Airbnb or you can’t have all your eggs in one basket is that something that you’re looking out for are you kind of

Emin (16:43.046)
Hmm.

Dylan Silver (16:59.34)
checking the, I don’t know if it’s the ordinances or the zoning rules and how this is approached at a local level with Airbnb. And then the follow up to that question is how is Airbnb doing in Northern New Jersey? Is there any difficulties there?

Emin (17:12.124)
Well, that’s a great question. When we teach folks how to transform their rental property, and when I say transform, it’s not always from long term to short term. Sometimes it’s commercial to residential. Sometimes it’s just reimagining your space. I had a summit recently, and I had a three-day summit, and it was related to the three pillars I’m about to talk about. On day one was pillar one, day two was pillar two, and day three was pillar three.

And so one of our expert speakers, we have speakers talking about each area of their expertise, and one had a storage facility. So you would think, how do you reimagine space? So when I talk about property transformation, it could be both commercial and residential. And so to answer your question, the first pillar of transformation is doing your analysis. Whenever we develop software, it’s the same way. If you see Apple come out with a new version,

they do an iteration and they go through the entire process, analysis, design, and implementation. So during analysis phase, you really want to look at what the compliance, what the regulations in your area looks like. And my recommendation to folks is if the area you’re in does not have regulations, or if you’re looking to invest in the area, you should really invest in an area that already have regulations in place.

So, you know, one of the, one of the, give me an example in Salem, Massachusetts, you know, where the witches of Eastwick were, I’m guessing. Well, anyway, Salem, Massachusetts, at first, landlords were able to rent their homes out as a short-term rental. When regulations came on board,

it was disallowed. So folks in Salem, they were caught out there. Another example is in Boston. started investing in, this is downtown Boston, a lot of real estate investors started building up residential homes for the purpose of real estate. And then regulations came in and they had to reimagine what they were gonna do. So the point I’m trying to make is, if you have the opportunity, if you’re aspiring to loan, you’re looking to invest,

Emin (19:28.176)
Look for those places that already have regulations in place and make sure they are work out to your advantage. And if your location doesn’t have regulations and somewhere down the line they do incorporate compliance and regulations, you want to look at the fine print and see if there’s a way around. And there’s sometimes you just can’t get around it.

Dylan Silver (19:50.882)
Yeah, mean, it’s not like to your point in mind, you can’t put your eggs in one basket. I think if you can have multiple strategies, that’s really the way to go. Sometimes people have to shift. I talk in other podcasts about kind of the trajectory. I see a lot of people who want to get into real estate investing, not necessarily selling, but investing. for me and many others, it’s not knowing how to get in.

literally no idea. I was working for Nissan on the sales floor selling cars and I had no idea how to get in. And so was reading books, you know, this is about 2022 timeframe. Didn’t really know going to Ria’s, going to Ria’s kind of unfortunately for me, lot of not action, a lot of thinking, not action, a lot of thinking. Finally, I paid a bunch of money, go to a conference and was blown away. I was like, all these people have all this property.

They I see myself in this person. I see myself, you know, another person from New Jersey, right? And so from there, I did my first couple wholesale deals, which were super hard. I did not know anything. I did a couple more wholesale deals. Now I’m probably up to somewhere around 20 wholesale deals in the last year and a half. So I kind of have my stripes. And now I’m looking forward to OK, let me get my nest egg up so that I can do my own fix and flip from fix and flip. I can potentially do.

buy and hold short-term rentals, right? And then from there, I’ve been told from people on the podcast is it’s tough right now in Texas to be profitable on these fix and flips. The margins are lower and lower. So we’re seeing people going from fixing and flipping to then being note buyers, to hard money lenders, construction loans, and really taking themselves to a different area of the business. And so I’m curiously mind if you…

saw maybe a similar or parallel trajectory for yourself in your real estate career or was it divine intervention that you kind of ended up where you are?

Emin (21:53.325)
No, I kind of just bumped into it because I already had a property management business. As a landlord, I had six homes, my ex-wife and I owned. And we just rented them out as everyone else does. Historically done for years and years and decades, long-term rentals. We read this article. And plus being in, like I mentioned earlier, in a corporate apartment space.

I mean, once I read the article, I was familiar with the model because of my corporate apartment. And plus I already had homes. So as far as it wasn’t planned, I just came across an article and say, hey, let’s flip it. But what I realized after flipping it, you really need a strategic approach because it’s so many moving parts. But the advantages to having a short term

rental versus a long-term rental is just on so many fronts. I mean you can double or triple your rental income that’s one thing. Streamlining operations is so tough so you need to make sure you have processes in place and with that said once you have those processes in place you have the freedom and flexibility to enjoy your property on your terms whenever you want. You may want to block it out the whole month of June or two weeks in June.

It’s just, you know, I kind of bumped into it, but what I learned the hard way, and it took probably a decade of really making mistakes to get it really fine tuned is you have to have a strategic plan. You have to have a design to match that, those requirements from that plan. And then you need to have a facility, a way to implement. Do you need hardware? Do you need software?

And you obviously you need human resources. How does that fit into play? And then you have revenue coming in. You know, when you have long term rental model, you basically have one revenue stream, which is rents. Everything is taken from rents. However, when you have short term rentals, you have so many places where you can generate revenue. You can generate revenue, for example, just off the top of my head, cleaning fees. You have special event fees.

Emin (24:05.532)
I mean, oftentimes in our homes, we host movies. you know, really should look at one of my summit sessions and talk about how a really creative way of not only owning a vacation rental, but also invest in a movie at the same time where they make a movie based in the background. The backdrop is the home. And so that’s very common. So there’s so many revenue stream, but how do you how do you capture all that? Those revenue that revenue in it? And especially if you’re smaller.

property manager we don’t have these big financial systems how do you configure QuickBooks to capture all those different types of revenues and how do you create a profit and loss statement we can see exactly what you’re doing so that’s where we teach our homeowners who don’t do who choose to do it themselves but they they take advantage of the formal education the formal learning from us

Dylan Silver (24:58.35)
Right, right, you know, I think having that guidance and the folks that you’re coaching is really invaluable. I tell folks, you know, if I could’ve, I would’ve done it sooner. I figured I could do it from, you know, reading and watching YouTube videos, but there’s honestly nothing that compares to what I would call education through osmosis, through just being in the room or being on a call like this. I can’t quite put my finger on it.

but there’s truly something about regular frequent feedback from someone who’s doing it or done it many, many times. It just somehow changes both your belief system. It’s like, this is proof of concept. E-Mind’s been doing this for, you know, literally more than a decade, you know, and two decades, right? And so if I can see someone else doing this and I’m regularly discussing this with him, he’s giving me the feedback. There’s,

Emin (25:50.076)
two decades.

Dylan Silver (25:58.102)
It goes from, can’t do this, you what do I have to do? To then, how could I not do this? I have, you know, my nest egg set up. I have the mentor in place, and he mine. And then I also know that he’s done it himself. So it’s like proof of concept.

Emin (26:13.436)
absolutely. There’s no replacement for accountability from someone who’s been through the trenches. And one of the biggest tools in my tool chest is the whole idea of owning your data. You have to own your data for the strategic plan. you know, not only your data, you need to have information about others like Airbnb we used as an example. They use data from VRBO earlier. They looked, they probably looked around at some of the smallest property managers.

So you wanna have your data, but you also wanna have your research based on other folks’ And so my concept of owning your data is really, really a big part of what we teach, own your data and how to own your data. And just to give you a nightmare scenario with not owning your data is, two scenarios. One, with Airbnb, they tend to be guest-focused.

that’s their customer. They’re not so much a homeowner focused company. So if there’s some kind of dispute, they nine times out of ten, they’ll side with the guests and the same with the information, the data. They try to own all of the data. Like for example, they won’t share their email address of the, the, your guests. And so you have to make sure you do due diligence and make sure you capture that information. And

Also, so, and then do you have an incoming client database where you manage and you’re advertising to create your own list, for example, vendor database, I talked about that earlier. And also, I mean, once you have that customers, there’s a lot of scam also in this business, well, everywhere, I mean. And so how do you flag a guest as a fraud person and how do you work around that and make sure you’re not,

you know, gonna be hit with a charge back, you know?

Dylan Silver (28:06.254)
Yeah, there’s a lot of that. mean, I was just talking with an Airbnb owner, you know, one of my mentors the other day, who was talking about these people somehow, I’m probably mischaracterizing this slightly here, but either added a pet or something like this so that they could get around paying a cancellation fee. And so they, he saw it and he saw that a pet was added, he clicked okay, and then they cancel and he’s like, they got me, you know?

And so there’s these like little tricks that people can do to kind of like, I don’t want to say, you know, weasel out, but something along these lines. So it’s like, you do have to be savvy. You do have to be able to pivot. We are coming up on time here, Emin. How can folks get a hold of you?

Emin (28:53.468)
Well, I have a free gift for everyone. If you’re interested in short-term rental space, I have something called 10 Steps to Transform Your Rental Property. We also have a comparison between long-term and short-term. So I’ll make sure you have the link, Dylan, and you can share it with the audience. I can also be reached at Emin, E-M-I-N, at Colbycoco.com.

and you could just put in real estate pros or Dylan’s name and I’ll get that free resource out to you. Really the 10 steps you need in order to transform your rental property. Really valuable resource and yeah that’d be great.

Dylan Silver (29:43.246)
Absolutely man, yeah, thank you for being on the show here, Emin, and to our listeners, regardless of what background you’re in, if you’re looking to scale your real estate business, or if you’re just trying to get in, I believe folks like Emin can be a great resource, especially if you’re positioning yourself in the short-term rental space. So this wraps up another episode of the Real Estate Pros podcast by

Investor Fuel, I’m your host, Dylan Silver, and thank you for tuning in.

Emin (30:16.144)
Thank you, Dylan.

Dylan Silver (30:20.428)
Alright, so that was great. It’s gonna be…