Episode 124 | Diya Liu | Military Millionaire Podcast

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Diya Liu on The Military Millionaire Podcast

00:00 - 05:00

David:

What's up military millionaires. I'm your host, David Pere. And of course, I'm here with my co host, Mr. Alexander Felice. And today we have Diya Liu on the show who has a pretty cool story.

She is an engineer turned attorney, who went from zero to $100,000 in rental real estate, about 13 months and doing short term rentals, and she now owns nine doors, and she spends her time traveling and teaching other people about investing.

And so she's getting to travel and do some renovations and stuff, and really just kind of control her life, which is awesome. And so we thought it'd be fun to have her on the show and talk about how you too, can start doing that.

Intro:

Welcome to the military millionaire podcast where we teach service members, veterans and their families how to build wealth through personal finance, entrepreneurship and real estate investing.

I'm your host, David Pere. And together with my co host, Alex Felice. We're here to be your no BS guys along the most important mission you'll ever embark on your finances.

Roger Vic One Oscar.

David:

Diya, welcome to the show.

Diya:

It's great to be here. Thanks, guys.

David:

Absolutely, why don't you give a little bit of your backstory to the audience?

Diya:

Okay, cool. I am, I was actually born in China. And I came here when I was eight years old. And so my parents were pretty poor graduate students. And we kind of survived about $1,000 for a family of three per month. And because it's compared to China, at first, I thought we were bankrolling it just because we actually bought a used Mazda. And I remember my parents were so proud just because in China, everyone, no one, well, in China, no one actually owns a car just because they wanted a car.

So the fact that we had a used car was amazing. And so we actually took all these photos in front of the car and sent them back to everyone. So that's, that's how, so I thought we made it already. And then I realized I was getting invited to all these class parties for birthdays, they were at Chuck E cheeses, and I couldn't afford Chuck E cheeses. And so I was like, wait, I don't think I'm actually that wealthy or successful.

And so my early definition of success was basically us Moscow's and Chuck E cheeses. Ah, and then my parents kind of raised me to think about traditional w two jobs as the pinnacle of success. So basically good grades, good school, rinse, and repeat, get a good W two job, etc.

And so I started on that journey, I went to UT Austin started doing biochemistry as my degree, and then tried to be even more of an overachiever and added chemical engineering to that mix as a double major graduated, went to law school with a full ride scholarship. And so at this point, I was trying to go on the traditional attorney path, etc. And so I thought that I had made it because I graduated with minimal loans and, and then I went to a prestigious y shoe firm.

And it was at this point that I realized that I entered a totally different world than what I was used to. This girl who thought Chuck E cheese was the most amazing thing in the world. All of a sudden, she's talking to all her colleagues who are talking about Porsches and etc. and tastes expensive tasting menus, and whatnot.

And so not only did I feel a little bit out of place, I also saw a lot of people on the hamster wheel for decades, with the golden handcuffs syndrome, and which just means that they make a lot of money. And they also spend a lot of money. And so I decided to look in elsewhere for some other definition of success at that point. And that's when I stumbled upon the financial independence movement and thereafter, I stumbled upon real estate investing.

So I told everyone I was going to start real estate investing. The problem was, I didn't know anyone in the real estate world. I didn't have any real estate investing or any sort of investing experience. And I wanted to move back to Austin, but I didn't know how to do that. But long story short, I was able to get started by moving back to Austin with a new lawyer job and start with a house hack project as my very first real estate investing journey as my very first real estate investing experience.

05:00 - 10:00

Diya:

And then I went to short term rentals just because I was really interested in the fact that it really depends on how well you know technology as well as automation and Airbnb and brb algorithms. And that was right up my engineering background ally. And so I just kind of started doing short term rentals only. And so within about 13 months, I went from about zero to 100k net rental income. And that was just with three or four a STR, or short term rentals. And now I have nine and I pretty much just do this full time now.

David:

That's awesome.

Alex:

So you gotta go view the tried and true mom and dad tell you go to school, get a good job, or tired, buy a house, that bullshit that we know does not work. And then you went and you got that W two jobs. And you find out that all that's cracked up to be, and so you got to buy short term rentals. What if that doesn't work? What if that stopped working?

Diya:

I think you're trying to imply that I could just always pivot.

So I've actually really failed or pivoted or however you want to call it many times in my life. And so I figured that a lot. In fact, a lot of people actually told me to not invest in my very first short term rental, and a lot of these people, or people who didn't invest at all in real estate, much less short term rentals. And so I definitely had a lot of people who told me to not do it, not purchase it, not make that leap. And you know, I did it anyway, just because I ran a lot of numerical analyses on it. And so I just went for it. And I got a booking within the first 20 minutes of putting my listing online. And that's when I knew that it was going to work.

Alex:

Yeah. But what if airbnbs don't work well in the future? Then what's your, what's the next plan?

Diya:

Um, so there's always going to be some sort of hospitality industry to meet the supply and demand in terms of travel. So before Airbnb, there were already hotels, there were also vacation rentals, they were just not run, they were just not listed on our Airbnb.

And so honestly, I think in the future, I'm more focused on potentially hotels, as well as converting multi families that are already long term rentals into short term rentals. So you're going to increase the cap rate by quite a bit whenever you do that. And therefore in the increased evaluation.

Alex:

I think we talked about doing multifamily as airbnbs. Off thing.

Yeah, so when I first got into rentals, I had the same similar situation where I called up my uncle who's done very well for himself, but he did it the hard way, you know, saving money on a W two. But he's done. He did well for himself in life. And I called him up and I said, Hey, I'm gonna buy these, um, this is before Airbnb was popular, and I said, I'm gonna buy a rental property. And he goes, Oh, man, that sucks. That's a terrible idea. You know, don't do that.

Tenants, pain is in the ass toilets, all this stuff. I said, Okay, well, what's the easiest way, you know, to invest and make money? He goes, Oh, well, there is no easy way. You might as well just do rentals. But I like that story. Because Yeah, like you get advice from people who've never done it, and then they tell you not to do it.

Diya:

Yeah, yeah. Well, even when I told my dad that I was thinking about doing real estate investing full time, he was like, What a waste. You went to law school, blah, blah, blah, right. So and by the way, my parents didn't want me to go to law school, they thought that was a waste they wanted to, they wanted me to go and get a PhD and the sciences because that was the Golden Grail and my family of scientists so, so you know, I've definitely disappointed my parents multiple times. So this real estate investing journey, just a new form of disappointment.

David:

Law school and financially independent what a turd that's so bad.

So, uh, alright, so obviously, you're doing all right, you're netting a decent amount of profit off these single families are they all in Austin, I say single famous short term rentals. But are they all in Austin?

10:00 - 15:00

Diya:

No, actually, only my primary residence is actually in Austin. And so they're all in traditional vacation rental markets around the USA. And I kind of diversify a lot in terms of my holdings, specifically, because I'm only doing short term rentals. So I have to hedge against black swan events, because I mean, 2020.

So, so of course, some of them are beach rentals, and some of them are ski rentals. And I'm looking into more cities as well as maybe mountain towns that are not just ski towns, right now to further diversify.

David:

So are you trying to buy in places that you want to visit so that you can visit there? Is that kind of the goal or, or is it more just because vacation rental spaces make more sense for short term rentals.

Diya:

Vacation rentals, towns are lower risks in terms of facing potential future short term rental regulations. So Austin and a lot of other urban towns, because the primary people who are going to buy these houses are going to be four primary residents, they tend to enact a lot more short term rental regulations and towns where most of the houses are already either vacation rentals or their secondary home. So the owners are not usually there. So they do also rent them out on VRBO or some other platform whenever they're not there. So the local politics is just a lot more favorable.

David:

I actually really like that answer. Because I think one of the big fears that a lot of people have with short term rentals are the regulations, right? Like I was in Hawaii, they did some pretty, they've had some pretty crazy, strict regulations about Airbnb over the last couple of years. And there's a lot of places like that.

So I think that's actually a point that a lot of people might miss with short term rentals is Yeah, if you invest somewhere that is traditionally short, like vacation rentals, right? Like, they know that like, especially like a mountain town like that, right? They probably don't have a whole bunch of hotels, and they know that's where a lot of their guests come from is tourism.

So they're probably less likely. I mean, it's obviously possible, but they're less likely to create any kind of regulations that would hinder that. I think that makes sense.

Alex:

Is that applied to like smaller towns though? Because like Vegas, axed short term rentals in the whole city.

Diya:

Mm hmm. Yeah. So.

Alex:

And like Orlando. Isn't Orlando, tough on short term rentals. But yeah, but it is the difference, um, hotel lobbies?

Diya:

Yeah, so definitely, there's some hotel people with hotel interests that lobby for short term rental regulation. The other one is just really homeowners who don't want all these people with their suitcases rolling around maybe their apartment building, or their condo building or around their neighborhoods.

And so it's both parties that you typically want short term rental regulations. And but it's really, they're both of those interests are typically not as successful in lobbying for these sorts of regulations, and traditional vacation rental towns, for example, Gatlinburg, Tennessee, or Pigeon Forge, and Tennessee there, they have vacation rentals, just not airbnbs per se, but they're their vacation rental cabins for decades. So they're not going to enact super prohibitive restrictions on those particular types of town.

So it doesn't really matter as much on the size of the town as much as what kind of people are what kind of political interests are there at play.

Alex:

Yeah.

David:

It makes sense to me.

I guess my next question in that vein with owning, you know, short term rentals in a million different states is, what are you having to do with an entity structure to run that right?

Are you having, are you finding, like, would you find it easier? Say you own three rentals in three different states? Do you build an LLC in each state? Do you own them in your own name? Do you just give the LLC access to operate in each state?

I'm just kind of curious, like how you run that from a business standpoint owning, you know, potentially nine rentals in nine states or however that works out where you honed in on one or two markets specifically.

Diya:

So interpersonal legal structure, I think one of course, they have to talk to their real estate attorney or their tax person. But what I ended up doing and I do have vacation rentals in different states is that I have one LLC, but then I have registered to do business and other states, and so that's a couple $100 to do that, depending on which state it is, of course, each state is going to have different laws for that.

But for me, that just made a lot more sense. Rather than having multiple LLC. I know, of course, other people might have different preferences, depending on their specific situation.

15:00 - 20:00

Alex:

Where's your port? Where's your stuff located now?

Diya:

Um, so they are mostly based in Texas and New Mexico, but I'm also looking in Colorado, Florida, right now to expand my portfolio and also looked a little bit in Tennessee, and my road trip recently.

Alex:

And how are you buying them? Are you buying them? How are you financing them? I assume.

Diya:

So yes, most of the properties are financed properties they were purchased when I had the W two job for conventional financing. And now I'm doing them with more creative financing methods like assumption deals and owner financing as well as I did one that was just cash recently as well.

Alex:

Nice.

David:

I like it.

So I actually, over the last two or three months I've taken, I guess, to like short little thinking trips or whatever, like I went up for like one night in this little tiny town called Idlewild in California. I don't know what the population is. But you know, I can walk from the cabin into the heart of downtown and back in like 10 minutes and the town is like, you know, a three way stop.

And I would just go up there I crashed in like some little remote cabin and Airbnb for the night. And then I went back up like a month and a half later, for like two nights. I just really liked the town. And then I started looking online like man, I'd love to buy a little place up here and maybe do some Airbnb. And I realized very quickly that a lot of people do that, like the town is almost all Airbnb is because of that. And the people who owned before and were able to like the prices are super inflated, if you want to own a house because of the rental income people are driving in.

So I think I've experienced just that, I can see why that would be valuable in a little market like that, like this was I mean, a 1905 one bedroom shack. I mean, the thing was, like, I can't imagine that the renovation budget was more than like, oh, copper piping that's been here for 100 years. That looks rustic. Yeah, let's just leave that.

You know, like, the snow was melting off the roof. And the bathroom floor was so wet. I felt like I needed one of those yellow signs. And I loved it. And I went back there again, and it was awesome. And the prices for these places are, you know, nuts for even California just compared to what like the amount of house you're buying. And I think a lot of that is because of the short term rental vacation. I mean, they were all vague. They were all full, it was.

So I think there's something to that niche. And I personally love the idea of like a high altitude cabin in the mountains.

Are you for that? Do you think Colorado likes ski resort areas? Are you thinking more like, you know, you think like Smoky Mountains kind of tucked away in a lake secluded in the woods? Or do you? Do you find any difference between that or?

Diya:

There's definitely different niche markets specifically to Colorado, a lot of the ski resorts are so well known that the real estate prices are really, really high. And also their specific management companies that really dominate the market in terms of managing all the buildings and you have to use onsite management, etc. So there's a lot of and then finally markets like Denver and etc. They actually have a lot of short term rental regulations.

So a kind of really depends on what kind of short term rental strategy you have. There's different types of tourism. So there's of course people who travel for work, whether they're for tech companies or they're for the military, when or for renovation projects or whatnot.

And then there's people who are traveling for fun, for music, concerts, and etc. Those are usually in urban destinations, sporting events, motorcycle events, etc. And then of course, there's the natural attractions like beaches, mountains, etc.

So when it comes to Colorado, I think the ones that apply the most are going to be for corporate when it's Denver, etc. Or it's for the Rocky Mountains and or it's going to be for ski resorts.

Sponsor:

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20:00 - 25:00

Alex:

Diya I have eight single family rentals, they're all long term rentals. I need you to convince me to convert them all to short term.

Diya:

So the first question whenever I ask people, when whenever they're considering converting their long term rentals into short term rental is where they are located so not every single long term rental is going to be a good candidate for a short term rental. If it's in the right location, you can get as much as 10 x your net rental income. I've seen that for downtown Austin, for example.

But if it's not in the right market, you're not necessarily going to see that much more cash flow just by converting it. But it's I personally like short term rentals a lot more. Because if you understand the marketing and the search engine algorithms, and etc, and your design is on point, you really can get a lot more cash flow for each property, and therefore you're able to scale your operations a lot faster. And of course, something that's on everyone's mind right now it's evictions.

With a couple exceptions, for the most part, you're not going to have to worry about stuff like that with short term rentals, you're also going to get paid up front, before people actually move in to the property and all of that is automated. You don't have to worry about knocking on someone's door to collect paychecks.

So I just personally think there's actually less headaches when you actually run short term rentals correctly versus long term rentals.

Alex:

Do you manage, do you manage them yourself? Your properties?

Diya:

I do and I just use a lot of technology. And of course I use really really good cleaners and handymen that are local to each city or town.

Alex:

Nice.

Yeah, I would definitely have somebody else do it. I don't want to do any work.

David:

Yeah, so I can attest I have a well two bedrooms that I was renting on Airbnb out of this house. Now it's just one because I have a roommate for a while and I do the cleaning myself just because for me I'm like well if I can pay myself 100 bucks to clean a bed and a bathroom. But it definitely gets annoying but I'm like the return for me is like what you know I just do it while I'm like, on a phone call with someone on like zoom I put my headset on and I'm like I just cleaned the cleaning the bedroom and I you know pay myself the $100 cleaning fee.

But I guess so I was curious. You mentioned this. I've had my worst. I guess my worst experience with Airbnb really isn't that bad. I've had a few kinds of weird ones. But my worst, I guess in terms of like, oh, man, this guy is gonna leave me a terrible review. Luckily, they didn't take it down as the dude showed up a day early.

So like the house was someone had just moved out. I hadn't even gotten off work yet. And I got this text from my roommate like, Yo, I thought you said someone wasn't coming here till tomorrow. I'm like, Yeah, he's like, they're making pancakes in the kitchen. And I'm like, Huh, so I get home, right? And the guy's gone. And he had messaged me and he's like, you know, super angry like what the hell the bed was trashed. Nothing was all the linen was all over the place. So it was made, clearly hadn't been cleaned.

And I'm like, your dates tomorrow. And it was very strange to me, because I'm like, all right, whatever. But anyway, all that to say my question is, what about the opposite? I've never experienced this. I've had someone overstay their checkout time by like two or three hours. But I've never had anyone say I'm not leaving. I'm curious if you know, because I've never even looked into it or thought about it until just now what would happen like could that be an eviction process? Or could you just legitimately have some cops show up be like, yo, short term, we're supposed to be out like, three hours ago? I don't know. I'm curious if you've got any insight on that.

25:00 - 30:00

Diya:

So in general of course, this is once again, state specific, the eviction process doesn't really come into play until someone's considered a tenant. And they're not usually considered a tenant until they stay as are a number of days in your property.

So normally the guests that I have are so short term that they're not going to be considered tenants, so they don't have the same tenant rights. And so, yes, and very, I've never personally done this before. But yes, you technically can just say that they are now intruding on your property.

And so for your guests, who showed up early, usually have a lock that only works for the duration of their stay. So the code only works starting when they're supposed to check in. And their code no longer works when they check out, uh, when they're supposed to check out. And so they're going to be not able to access before their check in time. And then whenever they check what they're supposed to check out, they no longer they just can't get access to the building anymore.

Alex:

Every Airbnb that I've ever gone to has that.

Like, hey, you're supposed to show up, but you know, 11, he's gonna show up at one. And so it's like, I show up at 10:50, or whatever it is, you know, 12:50 it's like the door doesn't work. But at 1 it works. And so David, what are you doing so terribly wrong? How are you so bad at this? What did you do wrong?

David:

Well, so I would do the same, except it's my house. So what I have is I just have a garage code that opens the garage, you can't access the house any other way. And normally, normally, I change said code for guests or whatever. But I happen to not be around at this anyway. You know, it is what it is. I live in the house. So I'm not really. I had never even thought like someone's going to show up an entire day early. Because usually I'm so I have a 24 hour gap. So I cleaned the house the night before. So the next day, I'm already going to work, it doesn't matter to me if they show up at noon, because I don't care. I'm not in the house. It doesn't matter to me, but um, you know, whatever. So I text him the code as soon as soon as the house is clean.

In this case, however. Yeah, I have no idea what when, like, the guy literally showed up. I mean, it was like, it was even it would have been before check in time by like two hours before check in time. But the day before and it was, it was a same day booking for like a local, which is also kind of against my rules. Like I have it in my rules. If you're local, you need to message me before you because I'm not trying to be the guy who's like, Oh, I just got kicked out of my house. I'm coming to crash with you or I'm trying to get my mistress pregnant or whatever crazy reasons people decide to just because locals generally speaking, if they're showing up at a house, or like a two night stay, it's usually not because of some really great like, let me just get away and move into a HOA for a vacation, right?

Alex:

I use Airbnb locally all the time, because I want to throw raging parties.

David:

It's usually for a party, or they get kicked out of a house, or they're trying to meet with someone that they don't want anyone else to know that they're meeting with, right?

Alex:

I never thought about that. That's a libel right there. That's definitely

Alex:

That's yeah, that idea is I'm gonna pay. Yeah, so let's do it like Google, I'm gonna reject..

David:

Oh, my God. So you know, so I have it in there like don't but whatever. But yeah. Anyway, for all I know, my roommate, let him into the house, I don't even know. Because the garage, it wasn’t used.

Alex:

Tell me what technology to use?

Diya:

So for example, for that particular problem, I normally just use August Locks. There's a specific brand that I recommend that syncs with August, and then August and turn syncs with Airbnb. And so you can actually just whenever someone books on Airbnb, you can actually just you don't even have to generate a code. Airbnb then just communicates with the August Lock that is physically located on your door, and then it now has a pin pad code that only works for the duration of this guests day.

So you don't actually have to do anything. You don't have to send the guests any instructions for the lock, they will automatically get an email. But there's a lot of other technologies as well for detecting noise, detecting how many devices are using the WiFi in your property, and etc. So that will be some of the tools that you can actually use without having extra secure security cameras in your property to detect a party or potential party.

David:

I like the noise once for sure.

Diya:

Yeah.

So if you have 14 devices and it's only supposed to sleep three you might get a little suspicious. Why are there 14 devices using the Wi Fi?

30:00 - 35:00

David:

Well, he's obviously got three laptops, a cell phone and a burner phone for every one of them.

Diya:

Maybe, or maybe a house party?

David:

Yeah.

Alex:

There's other software that my buddy Neil uses to like, determine what the market rent should be. Air DNA, things like this. Are you familiar?

Diya:

Yeah, yeah. So I use Air DNA a lot. There's a lot of, there's a couple other similar technologies as well. But Air DNA is a great tool to kind of determine the rental comps so to speak, for any sort of market that you're about to invest in.

And, of course, I always caution people about using Air DNA, because Air DNA is just going to have the median or the average for each different category in terms of performance.

So for example, the gross revenue, a lot of people just kind of use that as their com, but realistically on like long term rental coms, where if the rental com is $1300 a month, you're probably going to get plus or minus $100, for your property when you rent it out. But for short term rentals, if you actually look at people who are in the 25 percentile, meaning that they are not, they are only better compared to their competitors there, they're only at about 25%, relative to everyone else, there's in terms of revenue, then their revenue numbers are going to be a couple $1,000 less, and the person who's performing at the 75 percentile, meaning they're actually better than 75% of their competitors.

Alex:

So like long term rentals, I love this point, right? Long term rentals, which is why I like them are essentially a commodity. And so it's like the market rate says that this rental is worth 900 bucks, and I don't really care if it's much nicer, you're going to get 900 bucks, I don't care, if you're provide a much better service, you're gonna get 900 bucks plus or minus 100, like you said, 50 bucks.

But with Airbnb, it's a service, you can actually do a much better service and get a higher rating. And therefore you can command a higher price because people want to pay for the nicer stay. And so more than just the house size as a commodity, then you can actually charge more, if you provide a better service that you're saying.

Diya:

A better service and that doesn't just mean customer service. That also means understanding the Airbnb or vrbo algorithms. And so it's very similar to the concept of search engine optimization. But conceptually, the more you're able to land on the first few pages of Airbnb search results, the more you're likely to get higher occupancy rates, and therefore higher gross revenue. And also, if your design is really, really cute, or instagrammable, or Pinterest worthy, or whatever you want to call it. A lot of times you'll actually get a lot more in booking value just for that.

Just imagine you're scrolling through a lot of Airbnb listings. And you see one that's beautiful, versus one that is that just looks like a college dorm. Which one are you going to book and are you willing to pay just a little bit more for the first listing?

David:

Yeah. And that, pictures, right? Photos are huge for the difference. In fact, I think Airbnb does a really cool thing where when you first get your listing or whatever they say, Hey, your pictures are cool, whatever, we're gonna, we will send you a professional photographer, and we'll just take whatever their fee is off your first booking. I was like, That's brilliant, like great. Someone that Airbnb recommended shows up at my house, I wasn't even at the house, show up, take their pictures, post them, they did everything for me. And then it just came out of my first rent and their pictures were a million times better than what I took because Alex has seen what I'm capable of with a camera and it's a good thing I got auto focus.

Alex:

Your whole camera setup now only looks good because of me.

David:

Yeah, you're welcome.

Alex:

So I've been thinking about this for a while. I'm gonna probably do it at the beginning of the year where I'm gonna transfer. I'm gonna go and start with one but I'm gonna start swapping over my long term rentals to Airbnb s and so I'm trying to figure out some strategy. I don't have that much house style. I have a lot of personal style. But I have a much house style. And so but I have wasted I'm gonna I'm gonna I'm gonna sub this out to my social, my social friends who have style, but I think about these things right. Obviously pictures are kind of in my wheelhouse. I don't know the Airbnb algorithm anything, but these are good things to know more. So like you said, then just produce the house as a commodity, you gotta make it stylish. You have to make people want to stay there.

35:00 - 40:00

Diya:

And I've actually had people who asked me what my personal availability is, and they try to custom, they try to move their travel dates around so they can stay on my property. So if you actually put a lot of effort into your interior design a really pays off and that literally

David:

I'm very surprised to hear you say that Alex, I like it.

Alex:

Well, it's complicated. You know, like, I'm lazy. And I want to get paid more without having to do any more work and I already own all these assets. And so and then I watched my friend Shelby making a ton of money on Airbnb so I’m like, I wanna get some of that cash money.

David:

Yeah. Oh, it makes sense.

Alex:

Oh, did you lock up?

David:

Either that or she's doing a very good what's that game where you?

Alex:

I think she locked up? She hung up on us?

Oh no, Covid.

Alex:

Bro, I know I've been stuffy for like two days. Sushil, I did that on purpose.

David:

Is she gone?

Alex:

Have you ever watched a gas station encounter on YouTube?

David:

Yes hmm.

Alex:

Yeah. Gas Station.

Yeah, I thought you got mad at some I said,

Diya:

No, I'm sorry. Apparently my WiFi connection or something.

David:

Too many devices. You gotta you gotta stop that party.

Diya:

Yeah, definitely partying up here, guys.

David:

That's what they should make. The next thing should be where it just shuts the WiFi off, right? Because I would kill the party without even needing to text.

You don't even have to say, Hey, what's going on there? It's like, everyone's phone just gets disconnected. And it'll just disperse or tear gas?

Alex:

I don't think that if you could, I don't think you can install tear gas dispensers in your house? I don't think that's legal.

David:

Neither is having a party when you weren't supposed to in an Airbnb.

Alex:

Yeah.

David:

You know, same level?

Diya:

Yeah, same level, same level.

David:

totally the same? Yeah, you use too much soap, I guess. I don't think that anyway.

Alex:

I was narcissistically talking about my own properties, but converting them.

So this is all good information. I'm very thankful because I'm sure there's other people who have regular long term rentals that are our listeners. And, you know, you want to maximize that asset.

If it's sitting there, it's making me $900. And I know it could be making me 2500 a month. And that's obviously an opportunity that I want to take very seriously. And so I don't know that much about Airbnb, but I'm thinking about it.

So I know there's other listeners that are thinking the same thing, they might not want to go out and buy something specifically for Airbnb, but I know there's people that we have that have long term rentals that might want to convert them or think about it, even if it's like, I'm in Fayetteville. It's not like a big tourist town. But I know people do come through there, they visit family, whatever they're doing stuff. So I know there's an opportunity to make more money.

So I think 2021 is switching some of my stuff over.

Diya:

Yeah, for sure. Keep me updated.

David:

You have one, right, you're gonna know immediately if it's a good idea or not?

Alex:

What how?

David:

I said, if you do it to one within a month, you'll know if it was a good idea or not.

Alex:

Yeah.

David:

And what's the risk, right?

There you go. I mean, because what's what's the risk realistically, like, if you have a tenant? Who decides to move out, takes you two weeks to turn it over? Right? Well, what if you just, you know, I mean, you've got the cost of furnishing, that's basically what you're up?

Alex:

Yeah.

David:

Like, that's your risk. That's, that could be I mean, if you really can jack up, you know, an extra 500 to 1000 a month in rent, which you can depending on your market, right? Totally worth the risk.

Diya:

Of course, then you're not going in blind, you technically should have done a lot of due diligence on your competitors, as well as your marketplace etc. So, I want to mention that short term rentals are extremely micro neighborhoods specific. So it's not just which zip code is really great performing, but it's also which street you're on and what how walkable it is and just kind of how attractive in general that particular block is for a CRS and and that in turn kind of depends on all the different sources of tourism that come into that particular town and as well as in that's near that particular neighborhood.

And it also does depend on a lot of other things. Like what amenities, the guest is looking at when they're traveling to that town. And so that can differ a lot depending on what the source of tourism is.

40:00 - 46:58

Diya:

So for example, skiers might want a fireplace, but that might not be as important to someone trying to book in Florida. So, but a lot of people are important, they're going to beach destinations, they really care about hot tubs and pools, and etc.

So the amenities that people care about are going to be different. Of course, then also, you have to understand how sophisticated your competitors are. So if your competitors are mom and pops that only have one listing and their photos are cellphone photos, you're probably going to have a lot easier time and become a number one listing in town, then if there's hundreds of 1000s of competitors that are professional companies that do this, across the USA.

So there's just a lot of different factors that whenever I talk to someone and try to see whether or not they should convert their long term rental industry into short term rental, or if they should do it or if they should buy a short term rental. Those are some of the considerations that we talked about.

Alex:

That's good to know. Yeah, I'm working through it. So this is very helpful.

David:

I like it. Good stuff.

Alright. So there are a few questions that I asked every guest. And the first one is, if 18 to 19 year olds walk up to you and ask you for advice about short term rentals or life, you know, whatever. What do you tell them? What do you wish you'd known when you were 18?

Diya:

Well, I wish that I would have told myself at 18 to take a lot more risks, which and not just blindly follow the advice of parents. But of course, I probably should not tell that to most 18 year olds, if I don't want to become the number one hated person in the USA.

Alex:

That's a very envious title. I'd be envious if I had that title.

David:

I think that's great advice. I mean, maybe not the don't follow don't don't, don't don't listen, don't blindly follow your parents side might be, I can see why people might not appreciate that.

But you know, what, the idea of taking more risk at a young age is absolutely. You know, I mean, if there is a time to take risk, it's when you are younger, and you can afford to recover, right like a 70 year old can't afford to put everything they own up on a flip.

Someone who just got out of college probably can I mean, depending on their, you know, finances or whatever. So, I wish I'd been way riskier at a young age, for sure. For sure.

Alright, cool. Next one is resources.

What is a resource book course website, whatever that you recommend anybody looking to get into real estate in general or short term short term rentals?

Diya:

So I actually have a mini one hour course that I talk about a lot of the considerations here that we mentioned briefly today. So there, I get asked a lot of different questions about people who are considering converting existing long term rental into short term rentals, or basically where should they invest in short term rentals? And what kind of questions are in each of us?

So I've condensed all those questions into a one hour course. And that's available currently for $47. And it's basically just answering a lot of the questions that you are rather it's asking all the questions that you need to ask in your initial due diligence process, and it gives you an exact checklist of everything you need to figure out before you make that leap.

David:

Awesome.

Diya:

Well, and it's found out on my site, Idealead.com.

David:

Perfect, and we will make sure we link to that. And then I was gonna ask my next question: where can people get a hold of you? Is the website best? Or is there a better spot to reach out to you personally?

Diya:

They can email me [email protected] And they can also directly message me on Instagram at DiyaLiuESQ.

Alex:

Yeah, are we Instagram friends?

Diya:

Are we? I don't know where I think we're, I know we're Facebook friends, but I don't know.

David:

They don't call it friends on Instagram.

Alex:

Jesus, David.

Diya:

Are we following each other? I think that's the right question.

Alex:

I’m just curious.

David:

Alright.

Diya, thank you very much for joining us this evening. Actually this is good. So I like short term rentals. I like the idea of gonna play around with it a little bit in my house. But I like the idea of buying short term rentals in places that you would like to vacation. I think that's cool.

And I've got a friend who does something similar. And I've always been like, wow, you know, like, that's a good idea. Like, I want to vacation somewhere, why not own a house there that also cash flows. So I think that's cool that you're buying in sort of these niche vacation rental markets across the country where you can go spend some time and visit if you want, which is I think that's awesome.

Diya:

Yeah, yeah, I personally am also just kind of, a lot of times I kind of make my investment decisions, just more on cash flow. But I know a ton of people who actually just want one single vacation home. And they actually just want to be able to make enough on Airbnb income or short term rental income to completely let someone else pay for their vacation rental home.

And so that's definitely a really attractive strategy for someone who might not exclusively focus on short term rentals, but they might just want one ski cabin or one beach house or one lake house.

David:

Yeah. That's cool.

Well, thank you so much for joining us this evening. This has been awesome. And I am sure that a lot of people are going to reach out to you because I think short term rentals is kind of a hot topic still. Especially with to date this recording with Airbnb going public tomorrow on the stock market. I think it's, I think it's gonna be good. So I'm excited. And thank you very much for joining us.

Alex:

Yeah, thank you.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action

Diya Liu quote about Golden Handcuffs

Episode: 124

Diya Liu

Join your hosts, David Pere and Alex Felice, with their guest, Diya Liu, as they talk about how investing in short-term rentals got her from $0 – $100,000 of revenue in 13 months. Diya earned that from the units she owns, all while working as an attorney full-time.

In the household she grew up in, being an achiever was the goal. A good education in a prestigious school, finishing with flying colors, and getting into big-name companies were always believed to be the pathway to success. Instead of just following, she taught herself to take risks.

Diya now travels to different places, teaching people how to achieve financial freedom through her proven and tested methods. In this episode, we’ll hear Diya’s experience and approach to managing her vacation rentals, as well as the results of her redefinition of what success could be.

About Diya Liu:

Diya Liu helps real estate investing newbies and seasoned investors maximize their rental cash flow with vacation rentals. Diya came to the United States when she was eight years old. Her family of three lived in their mom’s measly $1,000/month graduate student stipend.

Her journey to investing was not a straight path. Her parents raised her to believe that the equation to success equaled getting straight A’s, going to a renowned college & grad school, and getting an excellent W2 job. Diya did just that, and she wasn’t happy.

Diya double-majored in chemical engineering and biochemistry in college; she got a full-ride scholarship to law school, and she got a job at a prestigious white-shoe law firm in NYC upon graduating from law school.

Then she realized that she didn’t want to work 9 AM to midnight for the rest of her career. After research, Diya found the financial independence movement and decided she wanted to be location independent too, not just financially independent!

She started investing in vacation rentals and got her first booking within 15 minutes of hitting publish. She had over 90% occupancy for the first month on Airbnb.

Since then, Diya quickly purchased more vacation rentals and achieved financial and location independence, giving her the freedom to travel the world.

Outline of the episode:

  • [02:20] The concept of success growing up.
  • [03:28] On the golden handcuff syndrome and redefining her concept of success.
  • [07:07] Contingency plans in the hospitality industry.
  • [08:04] The yes and no’s of people who have never done it.
  • [10:31] Choosing places suitable for short-term rental investments.
  • [19:28] Will your long-term rental property work well in the short-term?
  • [21:48] Bad experiences with Airbnb and how to facilitate occupancies for guests.
  • [26:46] Helpful technologies that support your property management.
  • [30:00] What long-term rental is if up against short-term rentals.
  • [30:44] The factors that contribute to an Airbnbs viability.
  • [37:26] Understanding your competitors and your target’s needs when choosing a property to convert into STRs (Short-term Rentals).
  • [43:45] Owning a vacation home and making it earn for your future vacations.

 Resources:

Advice to an 18-20-year old:

Take more risk, and don’t just blindly follow your parents advice/plan

Recommended resource(s):

Diya’s 1-hr short term rental (STR) course!

 

Website:              https://diyaliu.com/

Facebook:           https://www.facebook.com/DiyaESQ

Twitter: https://twitter.com/diyaesq

Instagram:          https://www.instagram.com/diyaesq/

Email:                    [email protected]

 

Follow our journey:

 

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My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase “I don’t get paid enough” entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom! – Click here to SUBSCRIBE: https://bit.ly/2Q3EvfE to the channel for more awesome videos!

THIS SITE IS INDEPENDENTLY OWNED AND OPERATED. ALL OPINIONS EXPRESSED HEREIN ARE MY OWN. THE VIEWS EXPRESSED ON THIS SITE ARE THOSE OF THE AUTHOR OR THE AUTHOR’S INVITED GUEST POSTERS, AND MAY NOT REFLECT THE VIEWS OF THE US GOVERNMENT, THE DEPARTMENT OF DEFENSE, OR THE UNITED STATES MARINE CORPS.

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David Pere

David Pere

David is an active duty Marine, who devotes his free time to helping service members, veterans, and their families learn how to build wealth through real estate investing, entrepreneurship, and personal finance!

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