How to Start Airbnb Arbitrage with No Money or Property

Adam Hager (00:00)
I was only making $60,000 a year when I got into Airbnb. So I didn’t have all this cash aside. I actually leveraged these 0 % interest cards and scaled to 19 properties in one year.

which is crazy. I was working really hard so that’s obviously not my recommendation for people. But you can leverage that same strategy to get income, leverage on the people’s properties without you having to have 20, 30, 40, 50 thousand dollars in cash just ready to

Kristen Knapp (01:57)
Welcome back to the Real Estate Pros podcast. I’m Kristen Knapp and I’m here with Adam Hager, who’s the co-founder of Airpreneur and we’re going to get all into Airbnb arbitrage today. So thank you so much for being here, Adam.

Adam Hager (02:07)
No worries, appreciate you guys having me on.

Kristen Knapp (02:09)
Yeah, so I’m excited to get into this sector. Can you explain to people what Airbnb arbitrage is, who might not know about it?

Adam Hager (02:15)
Yeah, essentially the concept is there’s a lot of travel on Airbnb and other platforms. People need temporary housing for vacations, for families, for work trips, etc. The list goes on and on. What we do with Airbnb Arbitrage is we actually leverage other people’s properties. So you basically sign a standard lease agreement with a landlord and you take that property and you list it on Airbnb and you make the difference between the revenue generated from Airbnb minus your rent.

utilities and cleaning costs and what’s left over is your profit. So this allows you to scale a lot quicker without having to put down payments on properties or get approved for you know at this point very high interest loans for actually buying a property.

Kristen Knapp (02:56)
And the idea there is kind of like a long-term lease would be less expensive than these short-term rentals, right? So that’s how you kind of make the difference.

Adam Hager (03:04)
Yeah, I mean, the idea is that if we can sign into a two to three year lease with a landlord, we can use that property to generate revenue on Airbnb for us instead of going out there and putting all this money down to purchase our own property. Because a lot of people think that you need some sort of vacation property or something like that. That they Those are the only ones that make money on Airbnb. But it’s not true. Your local two bedroom apartments that is down the street from you could still make you money on Airbnb without you having to go out there and purchase it.

Kristen Knapp (03:33)
Yeah, and it sounds like it’s really a win-win for all parties involved.

Adam Hager (03:36)
Yeah, it is because the landlord likes to do it because it’s passive. know, the big thing is that landlords with long term tenants, they think it’s going to be passive until they realize, wait, this broke, this broke. They’re the guests is having this issue. Now all of the money they put into being drained. It’s not as passive as they think it is where if you come in as a short term rental company, meaning someone who does Airbnb and you say, Hey landlord, I’ll not only pay you on time, but I’ll keep the house in immaculate condition and you’ll get, we’ll be able to work together for years and years and years.

be the last tenant you ever have, it solves a lot of problems for landlords nowadays and that’s why they like to work with companies like mine and my students.

Kristen Knapp (04:14)
Yeah, that’s amazing. I think it’s a great way for people to get involved with real estate investing because a lot of people, as you said, a lot of people think you need a ton of money to get into the game. And this is such a good entry point.

Adam Hager (04:24)
Yeah, I mean, you can actually leverage other people’s money. You can leverage 0 % interest business credit, which is what our major method is. So basically once you have a company, limited liability company, an LLC in your state, and you apply for that, it’s like 200 bucks or less, you get what’s called an EIN number back, an employment identification number. And you can use that number then to go apply for 0 % interest business credit cards with companies like Chase and Amex, where it will give you let’s just say $20,000.

And then you have that $20,000 at 0 % interest for an entire year. So you can use that money to furnish the property and then use the profits from the property to pay off that 0 % interest and just make those payments on it. So that’s how you can scale very rapidly in this model without ever having to use your own cash. And when I

I was only making $60,000 a year when I got into Airbnb. So I didn’t have all this cash aside. I actually leveraged these 0 % interest cards and scaled to 19 properties in one year.

which is crazy. I was working really hard so that’s obviously not my recommendation for people. But you can leverage that same strategy to get income, leverage on the people’s properties without you having to have 20, 30, 40, 50 thousand dollars in cash just ready to

Kristen Knapp (05:38)
Yeah, that’s such great advice. And let’s go back to kind of when you were working your corporate job and kind of discovered this. What did that look like?

Adam Hager (05:44)
Mm-hmm.

Yeah, so was doing corporate software sales and I was actually on a trip with my friends to Myrtle Beach and this is a true story. One night, a lot of them went out. I decided to stay back with my one buddy. We went to the beach, we started smoking cigars and he’s like, hey, like I need to get into real estate. I’m going to go buy multifamilies. And I was like, what’s that? Like, why are you doing that? And then he kind of explained the concept and I was like, okay, like maybe I need to look more into real estate. I don’t really have the money to do multifamilies. I came across Airbnb. I started diving headfirst into it and

very first landlord that I ever pitched my services, I got the deal and I still have that deal to today. So that kind of jump started me into going full-fledged into that and after I did scale to my initial 19 properties after one year, I did quit my job which was huge for me and then I just continued to scale the portfolio to where it’s at now which is you over 40 units and we’re looking to still grow.

Kristen Knapp (07:28)
That’s incredible. And then so you’ve built this platform, this community to really help people do the same. You kind of had an idea of like, why isn’t everybody doing this?

Adam Hager (07:36)
Yeah, I mean, I think people think in business that it’s competitive, which it is, but, you know, there’s 344 million people in United States. There are 50 states and there is a lot of opportunity in real estate, in any market, not just Airbnb. I mean, there’s market, there’s a…

There’s opportunity in flipping and wholesaling. All of that stuff works. I just chose Airbnb because Airbnb as a company has continually grown, has continually gotten better, has gotten public. So there’s more and more people using these sites, not only in the US.

international that come to the US any places to stay. So it’s not going anywhere. This concept’s not going anywhere. There’s still a lot of opportunity. And I was like, okay, why not help other people do the same? And at the same time, you know, I can leverage that to get into eventually purchasing long term real estate because really Airbnb and shorts and rentals is a vehicle to get what you want. And for me personally, that was freedom. you know, not having nine to five having the ability to travel for a lot of people listening and maybe

be able to spend more time with their kids or go on more vacations per year, which is fantastic. But at some point, if you want to have that long-term wealth and security, you do eventually want to purchase. My thought process is why not use the money from your business instead of spending all of the money that you have in your personal account on one property?

Kristen Knapp (08:52)
Right, and I think it’s such a good way to enter the market and to kind of gradually build and build your wealth up. Because I think a lot of people dive head first and think that every real estate bet is a good bet. And sometimes it’s not. People lose as much as they win. So I think this is a great way to do it.

Adam Hager (09:08)
Yeah.

Yeah, for sure. And even with Airbnb, I mean, you can’t just list any property in Airbnb and expect to make money. The people that are making money are the people that are treating it like a business. If you treat it like a hobby, you’ll lose money.

Right, you can go on Facebook and you can see plenty of people complaining about Airbnb or arbitrage and that’s frankly, because they don’t know what they’re doing and they didn’t treat it like a business. They kind of, I’m going to say, dipped their toe in the water, kind of dabbled a little bit. I think with any real estate, you definitely don’t want to dabble. You definitely want to go head first and really give it your best in order for it to work.

Kristen Knapp (09:44)
Definitely. And how do you figure out a good market to do this in?

Adam Hager (09:48)
Yeah, so there is a five step process we use, just to give a general idea, usually within a three hour range of where someone lives in the US, there is a potential possibility for a good property. Because you’ve got to realize that you’re not trying to scale to 50 properties, right? You might try to, you’re trying to get your first one and your first one can make anywhere from, you 1000 to 1500 dollars a month in profit. You can most likely find a deal that’s going to do that in your local area. So my first property I ever got was a three bedroom house, five minutes.

from where I’m currently at and I still have it. So in my town super small like most people never even heard of it and people are like why are people even traveling there I mean there’s plenty of reasons so you may be surprised. We use a software that can help also make sure that your market you know does have enough traffic but for most people within a two hour three hour radius there’s opportunity.

Kristen Knapp (11:13)
Is it something where you kind of have to be close to the property or is this something you can manage from afar?

Adam Hager (11:17)
You can manage it from afar. Now, you obviously need to have the skill sets to do that. Understand the software is in team. You have to get set up. Once you do have that set up, it is the most passive business. People don’t actually believe how passive it is. I tell people and they think I’m joking. But like I said, I know I have over 40 properties. I spend no joke, probably two hours max a week managing because I have everything set up. Like I haven’t spoken to a guest personally in the last like two years.

Now, obviously when you’re starting, you don’t have that stuff in place, you’re learning, so it’s going to take a little bit of time. But once you do have everything in place, there really is nothing more passive than this. All of your work is upfront. It’s upfront in getting the deal, getting it set up, learning the skill sets. That’s where you’re putting the majority of your work. And for sure, that first year that I scaled to 19 properties, I put in a ton of work that first year. But now that I kind of have the fruits of my labor, I’m putting in way less time.

Kristen Knapp (12:12)
Yeah, and to kind of set up those systems, I know that this is what you teach people and I know that you have a bunch of systems and software in place. What kind of people do you need? Like when you’re hiring, do you need like a manager? Do you obviously need a cleaner?

Adam Hager (12:25)
Yeah.

Yup, so there’s three people you really need. First, you need a cleaning company, and you need a cleaning company that understands how to do short-term rentals.

Second, you need a handyman, which you’re not going to use often, but in case of an emergency, like a doorknob breaks. I don’t know. Like there’s a lot of minor things that could go if it’s an older property. You need someone there to be able to go and fix that. And then third, this is the most important. You need someone to manage your property, meaning manage the communication with the guests, the cleaners. This person’s called a virtual assistant. What we actually do is we go out there and we find people who used to work at Airbnb, what’s called a level two case manager.

Kristen Knapp (12:40)
Mm-hmm.

Adam Hager (13:04)
We actually interview them, hire them, and give them to students so that they run their portfolio for them. And this team member, this virtual assistant, is really the key difference between you working 40 hours a week in this business if you have eight plus properties, or you working an hour a week.

Kristen Knapp (13:22)
Yeah, and I imagine your community and your education platform, you help people kind of crunch the numbers of what makes sense before they commit.

Adam Hager (13:32)
Yeah, 100 %

and I…

I want to be able to help your audience today as well. So there’s two things I’m going to give everybody today that is interested in finding, you know, the correct market for them. If it makes sense. Basically, all you have to do is message me on my Instagram, Adam underscore air printer, air printer, kind of like air and then printer. Because once you get an air print Airbnb, you’re an air printer. That’s the idea of it. All you have to do is message me the word launch. And I’m going to send you guys two things. One, I’m going to send you the five step market launch blueprint. This is what shows you how to find

the market near you. When I say in that three hour radius, this market launch blueprint is going to give you literally the exact step by steps. Nothing’s hidden there of how to find the market that’s going to be profitable closest to you. Second, I’m going to give you our script that we actually use to speak with landlords, like the exact things we’re saying, because a lot of people, they’re struggling of, well, if I do find a property, what do I say to a landlord? Right. That’s a common, common question. And you’re right to ask that. So we’ll also give you the full script as well. So if you just go on my Instagram, adam underscore amprener and message

me

the word launch. We’ll send over both those things. It will be an automated message, but if you do have any questions, I’ll happy to get back to you. Yeah.

Kristen Knapp (14:42)
That’s amazing. Yeah, that’s an awesome resource. And so when you’re kind of sourcing properties, what would you say, like in a really satric, so I’m in Los Angeles, for example, where it’s very competitive to get units. What happens in that kind of a situation?

Adam Hager (14:48)
Mm-hmm.

Yes. For sure.

You go somewhere else. That’s what you do. I mean, I have a lot of students in California.

And some of them have gotten deals in San Diego because San Diego is still pretty decent. However, I just have most of them target like Arizona. Like I have a lot of them go to Scottsdale or I have them go to Utah. You know, this is a remote business. So the idea is, hey, look, we all know it takes time to build a business. You’re going to have to put the work in. So do you want it to be profitable or do you want it to be easy? It’s like you probably want it to be profitable. So once you get a deal and another state, it can be run remotely. And then you’re going to know for sure that it’s going to be profitable for

Kristen Knapp (15:49)
Yeah.

Mm.

Adam Hager (16:13)
the long term. If you really, really, really want to do it in a place like California, there are spots that you can do it and you basically need to go for the premium homes, the homes that have the pools and all the amenities that are bigger. Those are the ones that will bring in the most money in a place like that. The only other place that’s similar to California is like New York City, where it’s basically not allowed in New York City. But besides that, like 98 % of the country, this is 100 % allowed and it’s not going to go away because all of

Kristen Knapp (16:35)
Mm.

Adam Hager (16:42)
these local counties and stuff, they just want to collect the taxes from this, which Airbnb takes those taxes automatically and sends into those local counties. So they benefit from it. They’re not trying to get rid of short-term rentals. They actually just want to make sure that they’re getting the tax money that they’re owed.

Kristen Knapp (16:56)
Wow, that’s awesome. And so when you started this, what are some, you know, maybe mistakes along the way that happened that you learned from and you can share with people?

Adam Hager (17:05)
Yeah.

Well, there was one button that I did not click on my Airbnb listing that protects me from getting bad guests. And I had a major party, like my second property, two weeks after it went live. And I had to call the cops four times. I was four hours away. I was nervous if they broke anything. I kept seeing the security camera in the hallway and seeing everybody there. And I was kind of like, oh crap, do I want to be an entrepreneur? This sucks. I have to wake up the next day for work, and I’m up till 2 in

morning dealing with this well I ended up it ended up working out I ended up actually getting all my back money back plus more there’s only a few things damaged I found the button I need to click I click the correct button I have never had a party since and I’ve had thousands of reservations

Kristen Knapp (17:46)
Yeah.

Wow, I think that’s a really good point because I think that would probably be something people might get nervous about because you can’t control the tenants at the end of the day.

Adam Hager (17:58)
Yeah, you do proper screening and there’s things in place to make sure that you don’t have those types of guests. Also, you have to realize that if you have like a one bedroom property or a studio, you’re probably never at risk for getting a party anyway. And if you have a three bedroom, four bedroom luxury place, your rates are so high that it usually deters those types of individuals. But obviously, there’s still some additional screening we do to make sure that that situation doesn’t happen.

Kristen Knapp (18:18)
Okay.

Amazing. So tell us kind of what’s next for you and what your goals are.

Adam Hager (18:26)
Yeah, so now that I built my portfolio, my first goal was to quit my job, right? So I was able to do that. That’s great. Did that a while ago. Second was to continue to expanding it to the point that I was comfortable with. Obviously I’m still expanding, but we’re, like I said, around 40 properties now. So now our goal is to start purchasing. So we’re actually purchasing our first vacation rental property.

on Airbnb in the next two months. And we’re going to start doing that as well, just so we can get those equity benefits, because we can actually use those equity benefits to basically write off a huge chunk of our earnings on our total portfolio. So at a certain point, it makes sense to buy. I think for the average individual, you should focus on cashflow first, because once you have that cashflow, you can improve your life, and then you can also then reinvest into purchasing.

Kristen Knapp (19:10)
I think that’s great. mean, it makes so much sense for someone who’s just new to this world. It just all makes so much sense, which I love about that. And then kind of to wrap up, what would be some maybe mindset tips you would give people who are wanting to quit their corporate job and work for themselves?

Adam Hager (19:25)
Yeah,

you have to take two steps back to go three steps forward. When you start a business, you’re going to have to invest money into it. You’re going to have to invest time. You’re going to feel like you’re going like a snail.

That’s just how it is. It takes about three months of consistent effort in anything to actually get improvement. So my side hobby is actually learning languages and it takes about three months of being consistent in a language before you actually get improvement. It’s the same thing in business. It takes about three months of focus before you get any sort of like glimpse that things are going in the right direction and then it really compounds. So my best advice is to just make a commitment to yourself that you’re going to do this for a year, whether it’s Airbnb or some other model and just don’t quit.

made a pact with myself the beginning of that year that I got the 19 properties that I was like, no matter what, I’m not going to quit and I’m going to continue until this works. And I had challenges along the way, obviously you’re going to, but because I had that mindset, it was never in my idea of like, Oh, maybe this isn’t for me. Maybe I should focus on something else. I didn’t have shiny shiny object syndrome, syndrome, which you can’t, you know, do multiple businesses at once. You need to focus on one thing. You need to commit to yourself. You need to stay consistent and you just need to see it through.

Kristen Knapp (20:32)
Yeah.

Adam Hager (20:38)
will eventually work if you’re that consistent. for those of you that have families and not a lot of time out there, the best thing you can do is just dedicate an hour, an hour, five days a week.

that’s gonna get you a lot more traction than trying to do like three hours a day or staying up super late and then burning yourself out. Because the goal is not to burn yourself out. The goal is to have the progress. And I would rather, I would pick the person who I know is gonna stay consistent for six months than the person who goes all in quote unquote for a month and then burns himself out.

Kristen Knapp (20:56)
Right?

Mm-hmm.

Absolutely. Consistency is favored much over perfection.

Adam Hager (21:15)
100%.

Kristen Knapp (21:15)
Well, this has been awesome. Please tell people where to find you, where to find Airpreneur, and then again, what they can message you to receive all those great things.

Adam Hager (21:22)
Yep.

So I know I mentioned this before, I’ll mention it again. The best way to find me is on my Instagram because that’s where I’m actually active. I’ll respond back. Adam underscore air preneur. And if you message me the word launch, I’ll send you the full landlord’s script that we give the step by step of what we say, as well as the market launch blueprint, which shows you the five steps of how to identify the best market near you to start Airbnb. So even if you’re not sure, you’re like, I don’t even know if this is going to make sense. You can at least use that to see if there’s even opportunity near you.

And of course, if you have any questions, can ask me that as well. Also, I have a YouTube channel for just general additional content if you’re really interested in learning more about this stuff. It’s called Airpreneur. So if you just look up Airpreneur on YouTube, you’ll find our channel and you can kind of start going through some of that informational content.

Kristen Knapp (22:08)
Amazing. Well, I encourage everyone to check that out. It seems like such a great way to get started and to find out something that you love in this industry. So thank you so much for being here, Adam.

Adam Hager (22:18)
Yeah, thank you as well.

Kristen Knapp (22:20)
Thank you and everybody thank you for listening and we’ll see you back next time. Have a good one.