Michael Elefante - Finding Financial Freedom Through 6 Short-Term Rentals
LISTEN TO THE FULL EPISODE ON:
Michael believes that all it takes is one short-term rental to help set you financially free. How about 6? Michael shares his journey to financial freedom in just ONE YEAR by leveraging short-term rentals. He and his wife now own 4 properties in TN and 2 in FL and just moved into a $2 Million home in South Carolina and are expecting their first child this fall. We walk through how he selects properties, how he runs his numbers, how he funds them, what steps he take to maximize revenue on each property, and how you can do it too. He's an open book and willing to share his journey....just ask his 750K+ followers on Tiktok!
In this episode, hosted by Mike Swenson, we discussed:
- Few people recognize the true opportunity of short term rentals.
- You can start with short term rentals without even buying a property
- Don't ask how much it costs to start, but rather ask how much you have then go deploy the strategy.
- Short term rentals is to create a cool experience with a goal of selling the experience, not the product.
- Airbnb is more popular for investors and travelers.
- With short term rentals, you're in the hospitality business, so great service will maximize revenue and cash flow.
- On your short term rental listing, the first few photos are so important to get someone’s attention.
- In doing market research, start searching in traditional vacation markets and urban areas.
- Calculator tools are great tools to decide which properties to consider moving forward with.
- Authenticity really comes through with people.
Timestamps
0:38 - Michael’s journey
8:35 - First investment
13:08 - Thoughts about Airbnb
13:55 - Acquiring future properties
16:23 - Seasonality of properties
19:19 – Cash on cash calculation
22:19 – Risk on different types of properties
25:21 – Michael’s investment growth
32:55 – Success thru social media
39:44 - Contacting Michael with questions
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Full transcript here:
Mike Swenson
Welcome to The REL freedom podcast where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. Let's get some real freedom together.
Mike Swenson
Mike Swenson here, you know, when I started the podcast of real freedom, the goal was really to highlight people building time and financial freedom through opportunities in real estate. And today's guest is the perfect exemplification of that mindset. Today, we've got Michael Elefante on and he started a journey on purchasing short term rentals with him and his wife they sacrificed early on, they bought one, it turned into two, which now has turned into six, and just a short time between 12 to 18 months, and has now been able to travel around and RV. And they just purchased their dream property. $2 million in Greenville, South Carolina, and they're all under the age of 30.
Mike Swenson
And so this exemplifies time and financial freedom through opportunities in real estate. They're living it, they're doing it, they put in the work, they took the risks, and they're now reaping the reward of that, so much so that they have a baby daughter coming on their way in October. And they're able to live in the house. They want, do what they want to do make what they want to make and be able to raise their child in an environment that they can pick and choose what they want to do because of these investments. So this is a great story. If you're on Tik Tok, you may have already heard of him, he has 750,000 subscribers or followers on Tiktok.
Mike Swenson
So you may have run into him too before. But with that being said, I want to get into today's episode where you can hear all the fantastic stuff that Michael elefante is doing. And with that being said, let's get into today's episode. Welcome everybody to another episode of The REL freedom podcast. And today we are going to be talking about Airbnbs short term rentals and financial freedom. It's really what it's about.
Mike Swenson
So you know, the goal of the real freedom podcast stands for real estate, leverage freedom, to be able to highlight people that are doing that through opportunities in real estate. And I'm so excited to share with you today's guests we have Michael Elefante on. And if you've followed social media, you've probably ran across him at some point in time. I know. Right now, he's got over 750,000 followers on Tiktok. And just a wealth of information about short term rentals. And him and his wife have picked up a few along the way for in Tennessee to and Florida. And you guys just purchased a home in South Carolina as a result of the financial freedom that you've experienced because of investing in real estate. And so we're just so excited to have you on and share your journey. So welcome, Michael.
Michael Elefante
Yeah, thanks so much. I'm really pumped for our conversation, it would be a good one.
Mike Swenson
So for those folks that maybe haven't heard about you and don't know much about your journey, why don't you just talk a little bit about before getting into real estate, and you really haven't been in real estate all that long. So it's been a short journey, but you've you've gotten a lot done. So maybe just talk about kind of your life leading up to that and why you decided to pursue real estate and short term rentals as an investment vehicle for you.
Michael Elefante
Yeah, so just to provide a little background, I'm 29 years old, my wife's 28 I was a college athlete. So as soon as my baseball career kind of came to a screeching halt, I didn't really know what to do, right. So as most young people do, I was just looking for some type of job I thought I would have interest in and I also had the potential to make a decent amount of money to go spend it on awesome stuff, right? I mean, that's kind of just a young person's mindset. Got into a sales role for a technology company started pounding the phones really learned quickly, what the rat race was all about, you know, the more calls you make, the more time you put in, the more money you can make in commissions, the more hours you put in again, over like day in, day out, day in and day out, you can climb the corporate ladder, but I really quickly realized that that's not really what I wanted, it became less about money and more about how I spent my time.
Michael Elefante
And if I wanted to make more money in the realm of sales, I had to spend countless amount of hours putting it putting putting the time and work in. So I didn't want to spend my whole life working more and more to make more money and spend less time doing what I wanted to do or spend less time with my future family. So quickly started to watch a ton of YouTube videos, read a bunch of books, and then learned about this concept of financial freedom. And for anybody who's done their research and financial freedom, real estate often comes up as like that's kind of like where it leads to real estate being some passive or relatively passive income that you can generate the rental properties. So I started doing all the BiggerPockets stuff. Again diving into more books. I was talking to my wife about it over dinner many times and I realized that I didn't know how to like how many doors will it take making $200 a door to hit that financial freedom number.
Michael Elefante
And then it became not discouraging, but I was like trying to do the math in my head on how many down payments yatta yatta yatta scale scale scale finally. So I was like, Well, what if we could do it in less time the goal is like five to 10 years, learned about short term rentals and Airbnb, Airbnb, still kind of young at this point time 2018 2019. And I started crunching numbers on average daily rates, how often they were occupied and Nashville to where I live. And I was like, if these numbers are right, this is crazy. Like, why isn't everyone doing this? And I've used Airbnb, I thought it was a fun app to use a good way to enjoy a vacation instead of a hotel. So we got our first place. And we were all in I actually sold my truck I just finished paying off to furnish the house, because I realized that it's not cheap to furnish a big house. So we got that first one that was kind of like the road leading up to it.
Michael Elefante
Once we saw that bookings come in and the cashflow like well, I was blown away. So we quickly tried to scale as fast as possible, not financial advice by any standard, but we liquidated our retirement accounts to get the second one. Once that cashflow is rolling in, you know, we get a third one and then we get a fourth one. And we were financially free in like 11 months, and we quit our jobs and 16 months spent probably seven or eight months traveling and a campervan around the country bought, you know a house that we never really dreamt of buying here in South Carolina now on a lake and just kind of have this beautiful view, it's kind of like a surreal moment that we've created this life of relatively passive income and financial freedom for ourselves.
Michael Elefante
And it's just pretty, pretty amazing to look back on. Like you said earlier, it just happened way quicker than I ever thought possible. So it's just, I tell that story just to hopefully encourage other people that it can happen quickly for you to you know, so, um, short term rentals, I think personally, in my humble opinion is the fastest path to financial freedom. And we could dive into the different strategies, of course, but that's kind of my background and how I got into it where I'm at now.
Mike Swenson
Yeah, well, and it's so interesting, because, you know, being in real estate full time and having a real estate team, what surprised me when I got into the industry is how few people recognize the opportunity of just traditional rentals. You know, so many agents that I talked to, like, oh, my gosh, I'd really just love to get in and become an investor. But I don't know how it's like, you're an agent, like you have all the details at your fingertips. And what's stopping you is just taking the risk. Or if you don't have the money, you know, finding the money and kind of problem solving, and you're just allowing yourself to sit on the sidelines, and somebody like you that hasn't been in real estate sees the opportunity.
Mike Swenson
And you just come in both feet, and just rolling in. And you see that opportunity. And now you look at how quickly I can double down. And so there's so many people that sit in real estate all day long, and they do nothing with the opportunity. And so I think it just shows how great the opportunity to be in real estate is. And it's why I encourage agents, stay in it long enough until you figure it out and put the pieces together. Because you're costing yourself your future if you don't, and then somebody like yourself comes in and you just put 123456 pieces together now you've got this awesome income coming in, regardless of what you do each day.
Mike Swenson
And so you can show up and spend spend time moving into your new house and you're still making money at the same time because those bookings are still happening. So. So I know a lot of people would be curious to know. So the first deal, right, like, how did you get that you had talked about, you know, selling your truck.
Michael Elefante
So the first one we had saved up for a while we had focused on our income, you know, over the years leading up to that just the more money we could make and just stashed away. So when we were finally prepared to make that first investment, we were ready. But you can start with short term rentals without even buying a property so we can dive into those strategies. But I usually encourage people don't ask how much it costs to start, but rather ask how much you have and then go deploy the strategy that best aligns to your to your budget, right. But for our specific first deal, we did a 15% down conventional investment loan in Nashville, Tennessee, it was a four bedroom house.
Michael Elefante
The purchase price I thought was outrageous at the time, which is hilarious talking about that today but it was like a $495,000 house that appraised for four bedroom at the rooftop. And one thing we strive to do with our short term rentals is create a cool experience my goal is to sell the experience not the product and that helps us stand down as Airbnb becomes more popular for investors and for travelers alike there's going to be 1000s of properties so I want to sell someone on the experience and not be a race to the bottom price wise but hopefully sell it at a premium to someone who's looking for a fun experience have cool photo moments but in the house Hey bro look where I'm staying type of thing.
Michael Elefante
So we looked around Nashville and obviously you have the music. The music city right you The music theme bars are really fun. But there's murals everywhere, which a lot of people don't know. I didn't know when I moved to Nashville, I saw hundreds of people lined up on a Saturday morning to take in front take a photo in front of these murals with wings on the side of the building. And I'm like, This is madness. So how can we bring that into the Airbnb? So it doesn't have to be in Europe. But this is just what we did. We brought butterfly mural artists get into butterfly wings national and above it. And our target audience was more special occasions specifically bachelorette parties, nationals, probably the bachelorette capital of the world, I would say. So we are able to charge a huge premium for weekend travel. And we still get midweek bookings just to you know, some a lower price point. But that was our goal.
Michael Elefante
And it really panned out well, so ever since we did that. We're like, we got to focus on the experience. But yeah, that was our first deal. 15% down, it cost us like 30,000 furniture all in. That's four bedroom has a rooftop and two other patio. So there are some additional areas to furnish. And that included the cost of mural, which I think was like 2500 bucks. But that deals has been great a cash flows as currently, six to 7000 A month after all expenses and mortgage paid.
Mike Swenson
Yeah. Well, and I think that's the key for people, when they're analyzing Airbnb is to look at where where's that spot you want to be? Because we're not talking about 85 bucks a night, 90 bucks a night like, hey, what's what's the cheapest I can go? It's a totally different mindset, you know, whereas when I'm working with investors on long term rentals, you know, you're looking to provide good value for you. This is hospitality, right? So it's, it's a totally different mindset shift. I'm not providing housing, I'm providing hospitality and an experience. And so yeah, people are willing to pay more for that, when you can deliver a great experience. And that's where the financials can start to look really good versus 100 bucks at night, you know, it's kind of the floor, how cheap Can I go? Well, if this person is at 110, a night, I can go 105 A night and hopefully get bookings that way, that's totally different than the way you look at this.
Michael Elefante
Yeah, that's a great way to put it, you're selling you're in the hospitality business. So it's certainly as a kind of a different twist that you have to put on properties in order to maximize revenue and cash flow.
Mike Swenson
Yep. And then you're also looking for properties that have a few bedrooms, where you can have 810 12 guests coming in, not necessarily just a couple, or something like that also gives you opportunity to charge more. Because yeah, if you said like, it's, it's a bachelorette party, maybe it's two families coming together to share a spot, you know, something like that, that's where you can charge that premium. And I know for me having a family of five, whenever I try to book a hotel room now with five people, it tries to put me in two rooms. And so you always have to play with the filters.
Mike Swenson
We're fortunate enough, our youngest son is small enough, where you know, when you put in the ages, we usually look for two beds and a pullout or something like that. But that's where at Airbnb for a family of five can make a total difference. Because now I have room we can spread out we're not cramped in a tight space. So that's where you just have to change your thinking a little bit in terms of how people are staying. And that's what that opportunity is for people that haven't given Airbnb or short term rentals. Any thought?
Michael Elefante
Yeah, for sure. And there's actually a misconception in my opinion, on saturation of short term vacation rentals, there's actually a huge increase in demand year over year of a lot of new people looking for the first time on VRBO or Airbnb, where they were traditional hotel stairs. And then a lot of people now think I'm going to book an Airbnb instead of hey, I'm gonna book a hotel, it's just a different way for people to travel, especially like you said, in bigger groups, it totally makes sense. You get a kitchen you might have can get a pool, whatever amenities you want, you could search for and all the under one roof and have more privacy than being in a big hotel. So it's definitely a fun way to book travel as a guest to.
Mike Swenson
So when you're looking at spots for Okay, so you've you've got your first one, it's a success, you see the cash flow coming in? What filters are you using? Or how are you helping to decide where to acquire future properties.
Michael Elefante
So I do a lot of market research. Err DNA is an amazing data and analytics hub that I personally use and recommend to anybody who's who's first starting out. Basically, you can look at the past three years of average daily rate occupancy and revenue data, in any market in the world, pretty much. Pretty sure they operate most of the world. And you can also look at future occupancy and booking trends and median price points too. And then you could look at where the top properties are on a map and literally see the Airbnb and VRBO listings, which is really helpful. So you can see where are they clustered in a market or is it like in certain pockets of the city?
Michael Elefante
Where are those top performing properties you can use filters to so if I'm a townhome, they're not a two bedroom place. Is it a condo or is it a house and a beach town? Like where is it located? And then what amenities and what furniture what kind of vibes they have, why are people booking these properties and what I look for is what similarities they have and then put my own twist there's a unique twist on it add a couple like wow moments within the house. I usually try and go for like one to three key moments because those first few photos online are so important. I look at Airbnb is social media right and we our attention spans as people has grown so small like two seconds onto the next one, if you're scrolling through hundreds of properties, you have one photo to really get someone's attention to want to learn more, if you click on it, you get five photos on the splash page.
Michael Elefante
So that's what I start in like kind of the general market research, there's really two different ways you can start searching, you can look at traditional vacation markets, which is beaches, mountains, lakes, or you can look at urban areas such as Nashville, Las Vegas, Austin, Texas, that are growing cities, but also have a massive amount of tourism, there's reasons to visit the city. And then you also have the work travel and the local events and things like that. There's pros and cons to each right vacation travel pretty much always gonna have that in those areas. And it's also kind of a hedge against anything like COVID ever happened. Again, what I noticed with COVID Is there was a major shift to those markets, the traditional vacation markets. But now it's starting to shift back. So Nashville is going crazy.
Michael Elefante
But it's I want to elaborate too much on that specific question. I'll talk all day. But that general market research is really important. But you can make money in so many different markets, as you're well aware being where you're located, you don't always have to go across across the world to find the perfect property per se, you just have to find the right property in really any given market.
Mike Swenson
What are your thoughts on seasonality? Because I know I live in Minnesota, Minnesota is cold. You know, we work with a lot of out of state investors where even the idea of having renters in the winter, they just can't fathom that. And it's like, well, we still have jobs here in the winter. So we still have people that need to stay here. How do you analyze kind of the the weather and the seasonality piece? Because you're you're you know, markets are more warm weather? What about those colder climate areas?
Michael Elefante
Yeah, that's a great point I do focus on I really try to have less seasonality in my business, I'd like steady cash flow each month of the year, you can still make a ton of money in a seasonal market, if you just crush it during the busy season. What you have to do and makes the biggest difference in an extra $10,000 a year in cash flow is how do you capture bookings during the offseason, what some people do in his specific location, they may switch it to like one season one to three month long stays may be catered to like traveling nurses, if there's a hospital system nearby, or even rented out on like a three to six month lease in the offseason, just to kind of lower cash flow, but still cash flow and then make all your money in, let's say the summer months, if that's what it is. So I personally do like to focus on less seasonal areas.
Michael Elefante
But I wouldn't be like shy away completely just because the market is you know, has basically late spring early fall, which is typically like a summer season and then it quiet quiets down. So just just know what you're getting into. And that's why your DNA is so helpful because what you can do is see what the traditional occupancy is, and then also how the average daily rates tank or fluctuate how much they fluctuate and kind of craft a forecast that makes sense.
Mike Swenson
Yeah, and I think another thing that you're very open about insurance is you have a great calculator tool, and I think that's something to recommend to folks is is you got to be able to put together a nice tool to be able to analyze those properties. And so you can actually look at, okay, if I plug in this average night nightly rate, I've got my vacancy rate, I've got my expenses figured out, here's what it can cashflow, and you do such a good job of just showing people how easy it is. And I think sometimes people shy away from it. And you're like, hey, let's not overthink this, let's just plug in the numbers and make a business decision here. And if it makes sense, move forward. Yeah,
Michael Elefante
100% You got to strip the emotion out of it, especially with short term rentals, because it's really easy to do, like look at a place to be like this is a kick ass place, people will definitely rent it. Well, if you don't know how much people are really willing to spend or how often those clientele is actually going to come into town and spend that kind of money they're like, you don't really know how profitable it will be. So it is really helpful to strip the emotion out of it and just focus on the numbers and then just stick to stick to your criteria. Honestly, the calculator helps me eliminate properties more than anything, I just if it doesn't meet my cash or cash expectations. They're out the door and I'm on to the next one, right? Because eventually it's just a funnel how to get to like a property that fits and has upside.
Mike Swenson
Yeah. So on the cash on cash, you know, calculation what what do you look for
Michael Elefante
my minimum is usually 25%. With upside with higher interest rates. Now, I would still be pretty happy with 20 Plus, just because it's more expensive to borrow at this point in time, but I still think there's opportunity to tap 25 plus and if you're able to leverage a second home loan by only putting 10% down if you plan to use the property at all during the year for personal use. Then there's major upside the highest we've had on one of those was 100% cash on cash, which is pretty wild to think about it then if you're deploying rental arbitrage which you're not buying the house but you're actually doing a corporate lease to rent and then furnish and re rent you can have I mean my expected return would be like 100 to 300% and some people that focus only on arbitrage or like it has nothing to do with touching it. So it's pretty wild to hear that out loud. But those are numbers are very real in the short term rental world.
Mike Swenson
Yeah, why don't you just take a minute or two and talk about the arbitrage piece for for folks that have never heard of it? Or like, are they? They can't get their mind around it? How does that work?
Michael Elefante
Yeah, and this is like, listen up, if you if you feel like hey, man, I'd love to do real estate, I don't have a ton of money like this is for you. You don't need a downpayment, you don't really need credit or anything like that, what you would do is just form a basic LLC, let's call it Michaels corporate housing company. And then you would approach either traditional property managers for an apartment complex, you can also do single family homes or condos. And what you're doing is basically signing a corporate lease, basically, you they're renting to you as a business, not a residential lease, not as a person renting there. So what you're doing is gaining permission to actually furnish it and then reread out on a short term basis to your clients.
Michael Elefante
So that traditionally, it was more like work, relocation, travel, nursing, things of that nature. But it's kind of transitioned into some of that, but also short term, just short term rental travel in general. So it could be vacation, leisure, travel, family, travel, whatever it may be. But basically, all you need is money to furnish it. And then some costs associated with setting up the lease if there are any. So much less cost prohibitive for people, especially if it's a smaller unit, you could start with a few 1000 bucks, Max, and then you're in and then anything you bring in on Airbnb, VRBO, any of these other platforms minus your monthly rent, and minus your operating expenses, like utility bills, Wi Fi, things like that is cashflow.
Michael Elefante
So the return can be substantial. And that's an amazing way to scale. Because let's say you start with five grand, or 10 grand rather, and your cash flowing 1000 bucks a month, it only takes you five to 10 months to get into another unit, you got two grand a month, like just you could do the math and very quickly, all of a sudden, you could be making five to 10k a month in cash flow that's life changing that you could leave your job if you wanted to, at that point, or just continue to scale. Right? So it's just an amazing method that I think people should should look into.
Mike Swenson
Do you find a certain type of property might lend itself better for that, like, you know, like a urban condo or something like that, or you'd also mentioned single family homes, are there types of properties where you feel like, the risk is a little bit less, or there's maybe a higher upside.
Michael Elefante
So honestly, I think you can go either way, I think it really comes down to the individual property, what the rent is, and then what you know, the market, average daily rates are an occupancy. So it really comes down to individual property analysis, I think, if you're looking for something that feels a little less risky, and there's less money on the table on your side, go for something smaller to a studio apartment or something.
Michael Elefante
The benefit of going the apartment route is if you form a real because it's really about relationship building with the property management organization or whoever owns the place. If they like you need to make it a win win scenario, right? You aren't they're doing you a favor renting out a short, short term rent, you are doing them a favor because you're reducing their occupancy, vacancy rate, right, which is boosting their overall revenue and cash flow. rent is paid on time, every single month. And the property stays in for sale condition, because you have to professionally clean in between every group of guests. Normal tenants, not all of them are great a lot.
Michael Elefante
Some people really live in a place and they don't clean up after themselves. So there's a lot of benefits both ways. So what I'm getting at is if you can form a great relationship with that property manager, they may come to you for the same property or other properties be like, Hey, I have 10 Open units, like do you or anybody else want want to rent them? Because I need to fill them. And if you can build that type relationship, that's where things don't just go bonkers for you. And growing that business.
Mike Swenson
Yeah. And I think you had mentioned to, you know, having that good relationship, and then making sure that the property manager is keeping up on repairs and stuff that they need to still keep up on. Because you need to have that when when they're so that way you continue to have great reviews, and they're keeping up on the property. You're providing the cleaners and all that. So yeah, I mean, go go research that on YouTube, find people out there that are doing it at a high level, but that's a legitimate thing. And like you said, you don't have to have a lot of cash to do it. Or even so if you have a home, and there's an empty bedroom. You know, that's another great way to start. You know, you're now in the hospitality business, though. So you're having people coming to your house. So if that's something that interests you, it's still another opportunity. It's a way to get going in a way to get your foot in the door.
Michael Elefante
Yeah, absolutely. I mean, you can house hack to Airbnb use many different methods. And then the last strategy I'd like to mention is just co hosting. There's a lot of people out there who don't want to manage their own Airbnb or they're paying traditional exorbitant costs to have a property manager typically charge 20 to 35% of revenue. To manage your properties. If you've come in as hail co host, I'm just going to manage your listing manage guests. I mean, it's the cleaners I mean it maintenance. You can automate a lot of that through tech now, but I'll manage it for half the price is your big bucks PM. Right? If you're going to charge 10% And you do a private property that does 100k a year, then you'll make 10 grand a year. is to manage it, right.
Michael Elefante
So think about how many properties you would take to onboard to, you know, I mean, whatever your financial freedom goal is and then you could take that money and funnel into your own investments but coasting takes nothing but just grit and hard, hard work and networking. That first one is definitely tough if you have no experience but once you lock one in I've known people to scale very quickly to multiple
Mike Swenson
properties for folks that don't know your story. Just share a little bit about that growth then, you know, each of the properties that you've gotten, you know, your your move to Florida, finding those properties, just to share folks that maybe haven't heard how that's happened for you.
Michael Elefante
Yeah, so like I mentioned, the first property was in Nashville, it was just an easy market to investing because we live there and it was a high tourism and high growth city. So we got the second one also in Nashville is a smaller place a two bedroom condo downtown, that rents very well very happy and see. The third one we actually leverages a second home loans vacation home to 10% down out in Gatlinburg, Tennessee, so we could go and visit for pretty, you know, three and a half hours away, not too bad. We did a more of a rehab on that one. And that one rented out like nuts. It's crazy. we pivoted there during COVID Because Nashville was pretty slow for several months, but the mountains lakes beaches just went nuts.
Michael Elefante
So we did that one there. And then we partnered on the fourth one, which was a great opportunity. We actually met this guy who is a homebuilder and house flipper in Nashville, he built the two houses across the street from us and we just became friends over time while he was building the homes over what an eight or 10 month period and he said hey, if there's ever an opportunity for us to partner, let's do it. And I was like, okay, like, let me look for one that needs a lot of work that we can basically do the burr method on, which is buy rehab rent, refinance, repeat, and pull a ton of money back out that will also be a high cash flow property.
Michael Elefante
This is probably the most insane investment we've ever made. I don't know how we secured this deal at this point in time but we bought a place it's a four bedroom plus a loft in Gatlinburg, Tennessee for under $500,000. it appraised for 4575 When before we did any work, something about $110,000 into and but did about 70,000 and furnishings, furniture and in design data property about 12 months later appraised for 1.2 million. And it cash flow does it'll cashflow six figures a year, which is just nuts to think about. But what we did as a cash out refi we pulled out over 2x What the total amount we invested in. And we so basically, it's just an infinite return on our investment, which is amazing about the burr model. So that was really cool. Then like I said, my wife and I both quit our jobs. At that point.
Michael Elefante
We were cash flowing around $30,000 a month. And we bought a camper van and we long term rented our primary home in Nashville for a year. And we traveled around the West, we were trying to figure out where we wanted to actually live and in the meantime are like hey, let's also hit some markets that maybe get short term rental markets while we're out. stumbled through Florida bought two homes down there because just we saw how steady South Florida was. It wasn't very seasonal, and it was actually busiest during the winter and early spring, which is when we're slowest in the mountains and even in Nashville's. So for us it was more of a balancing act on when the heavy parts of cashflow would be. So it's kind of worth level throughout the year.
Michael Elefante
And we also saw a major trend during 2020 2021 2022 of people leaving major metro areas for sunny, warm Florida. So we saw that mass migration and what it did to the housing market. So we're like, well, it's a good long term hold in addition to the cash flow that we could do there. So that brought us to six homes, we actually sold our primary home in Nashville, and we ended up buying our primary our new primary in south in Greenville, South Carolina. So it's just been a pretty while two and a half years. But now with six properties, our cash flow should be 40, upwards of 50k a month from just a six. And we have focused on larger properties. And as we've gone on, we've tried to make them more luxury experience.
Michael Elefante
And the reason we've done that personally, I'd rather manage one big property than three small ones that both produces total same amount of cash flow, because it takes the same amount of time to check in a guest and a big property does a small property. So one set up about the same amount of time commitment.
Mike Swenson
Yeah, it's a little bit of a different mindset shift, because people will naturally think bigger property, bigger wrist, but at the same time, it's the same amount of work. And you're able to capitalize on those higher returns. I think sometimes people just naturally think, Oh, I'm going to start small. But from an efficiency standpoint, it's very efficient to do it that way.
Michael Elefante
Yeah, for sure. And I wouldn't discourage anyone from starting small by any stretch of the imagination. But I just think as time goes on, especially since we we still currently self manage I'd rather manage less larger properties than more small ones just because it from a time commitment perspective. It just makes more sense.
Mike Swenson
Yeah. And for people out there that think that self managing would be a headache. Talk about that process because I know it's it's very simple. If you have good partnerships, good boots on the ground, really it's just making some phone calls and doing some very minimal stuff. So it's not like use self managing six properties is now you're working 60 hours a week to make that.
Michael Elefante
Right? Yeah, maybe 20 years ago probably wouldn't be. But the beauty of technology and the rapid evolution of technology is, there's just so much cool tech out there that automates a lot of old manual tasks, especially in the vacation rental space, right, as long as you have good local cleaners, and they communicate well through his cell phone. And you'd leverage apps that help automate guests messaging, cleaner, cleaner, scheduling, and then even cross pollinate your calendars between verbo booking.com, Airbnb, but all the guests messaging is automated, the pricing is automated. So it's really just responding to specific things from guests questions, and then specific things from cleaners or if there's ever damage.
Michael Elefante
But honestly, it's probably about 30 minutes a week per property. I would say some weeks more, some weeks less. But that's just the beauty of it now. And most I think I mentioned earlier, most traditional P anvils and they still do charge 20 to 35%. So if we'll do, like last year, we grossed around 600k. So if we were to do 20%, even it'd be about $120,000 that we've given to do a PM, that takes us two hours a week to do from a van in the middle of nowhere. So I was like, I'd rather pocket that now to help scale faster, and then sit back and pass it off to a pm later down the road.
Mike Swenson
Right. So what what does the future look like for you? What what irons do you have in the fire here? What? What's the twinkle in your eye for the next 12 to 24 months as you think about your your business?
Michael Elefante
Yeah, so I've actually lately I've been focused a lot more on the my coaching business and my social media brand, because I have a lot of kind of things that have just happened organically over the past, you know, 12 to 14 months there, which I wasn't really expecting. So just kind of hitting that full force and helping other people do the same thing that I've been able to do, it's been really rewarding, both financially and just kind of like intrinsically just seeing other people hit financial freedom through short term rentals is just like amazing, amazing feeling for me. And so I focus a lot on there, and I'm being more opportunistic.
Michael Elefante
So we're kind of, we just set up these two properties in Florida, which was a lot of work. So now we're kind of sitting back sitting at Barone home. And once I'm still, you know, hunting for properties, of course, every now and then. So once we find a great opportunity, regardless of where the markets at, I think I'd like to be prepared to just jump on it and be more opportunistic to like wait for like a homerun. But that's kind of kind of where we're sitting right now.
Mike Swenson
You know, why don't you just quick touch on the social media piece for a little bit? Because, you know, you're up to, you know, 750,000 followers now on Tik Tok? How did that what was your mindset around that? And as you started to see some value in that, you know, what, what type of priority to get did you give to making sure that you're continually posting kind of mapping out, you know, what my posts are going to be and doing that, because your, your method is very simple, straightforward, honest and open. And I think people really value that, but talk about that, that social media piece and how you're able to be successful there.
Michael Elefante
Yeah, so I actually started doing longer form content on YouTube in 2020, I think it was, and didn't get a ton of traction, my content was actually pretty subpar as far as like camerawork, lighting editing. So that's probably why but I was really just regurgitating what I was learning in real estate, and just sharing all this awesome stuff that I found. And then I started I actually did a challenge with a real estate buddy of mine on Tik Tok like a post a day for 30 straight days, and I've never used Tik Tok. So a couple of videos, hit the algorithm pretty well got a few 100,000 views. And I was like, This is crazy, because YouTube is really, really hard to kind of hit that at the beginning stages. So then I was like, let me just keep this up and just see where it goes. So started to figure out that just being open, honest and kind of organic with the audience and saying, Hey, here's what I'm doing.
Michael Elefante
And here's how much money I'm making from it, you can do it to, like you said, that really resonated with a lot of people. And a lot of people messaged me saying you really opened my eyes, I didn't really know this. And I'm like, that's really cool. So I just found a lot of just fun and doing it didn't really I didn't make any money on social media for at least 12 to maybe 24 months total. And then finally, all of a sudden, all these different business opportunities bubbled up. i A lot of people asked me for calls I took a bunch of free coaching calls. And then people are like, Why aren't you charging for this? And like, I don't know, I never thought about it, you know?
Michael Elefante
So like, if you build a course I would take it like this is all like you already have it all planned down like okay, never thought of myself as a course guy or any of this but build a course did coaching do like, like six month long mentorship program, I sell like the calculator, spreadsheets and a bunch and then I partner with brands to that I'm already using and loving every day. So I can basically promote what what I love about their product and I get paid to do so. So it's just amazing. What kind of leverage you can have if you can grow a personal brand and grow a following. That's why I've been more focused on that just the scalability of that is It's just crazy. So I'm just kind of seeing where the tide takes me. I guess as you can say,
Mike Swenson
Yeah, it feels very natural, it doesn't come across as forced, you know, the ads that you that you do. It's not out of the scope of what you're trying to do. You share your analysis tools in your videos like, Hey, here's what I'm looking at. I know, a recent one is Birmingham, Alabama, here's my, you know, here's my spreadsheet and plug in the numbers. Well, naturally, people are going to ask like, Well, how did you get that calculator? Well, you go click on the link, and you can go download your calculator. So people want to know what you're doing. So they obviously want to be coached by you, they want to have those mastermind or those training calls.
Mike Swenson
So it just very much is an organic overflow of you just doing a good job, and telling people about it. And being honest, you know, I think there's, there's probably some people that are rubbed the wrong way by your honesty. But I know people appreciate that, versus all the BS that's out there in the real estate world of, you know, because there's, there's people that are sharing how much they're how much money they're making, by sitting in their Lamborghini, with Jack, you're sharing how much money that you're making, and just a very open and transparent way to help others. And so I think that authenticity really comes through with people.
Michael Elefante
Yeah, and I appreciate you saying that. And yeah, I've seen my share those videos out there, which lead you down a rabbit hole of like, trying to find where the value is, like, show me what you're doing. Like, I want to know. So for me, I just want to like give as much free value as possible. And I think that is what has enabled my brand and all these other things I'm doing and making money on now to just grow exponentially. And just, it's just wild. But so I hope to continue that I just want to be authentic and be myself, I don't need to be posting or flexing being anything crazy. or anything like that, just to try and pump pump the algorithm, you know,
Mike Swenson
yeah, I remember having a conversation with another person in real estate a couple years ago about like, you know, like, where's the genre for like, the, I want to be a good husband and a good dad at the same time that I'm being in real estate, like, you don't really see that genre very much because it's always the the flashy cars, or this, that or the other and it's like, I just want to be a good father a good dad and do a good job in my business and, and grow that way. So
Michael Elefante
yeah, yeah, there needs to be more of that, for sure. Like that. It's unfortunate, because I feel like the videos, the other side of it is when like the flashy videos, those heavy algorithms so perfectly, because you have a lot of people, especially younger people, like I like that lifestyle, like like, comment, share, and then you have a 50% of the crowd being like, middle finger up, like, and screw you, there's bullshit content you're putting out like, this lifestyle isn't real. You're just flexing so then it just creates bickering in the comments. Like all this just pumps the algorithm. That's why a lot of people do it. Yeah. So for better or worse, that's why a lot of those videos tend to do well.
Mike Swenson
Yeah, I had, I had somebody reach out on a comment on a Facebook ad, a virus talking about real estate investing. And they're like, you know, something about, I would rather take $20,000 less than to sell to a greedy person like you. And it's funny, because I wrote back, you know, because I want to keep the algorithm going, I don't want to just delete a negative comment. And I said something along the lines of like, you'd be surprised to see what kind of flashy cars we pull up in either it's my seven year old minivan that has a dent in the side where somebody hid in the parking lot, or my pickup truck where the AC went out,
Mike Swenson
you know, over the winter, you know, and it's like, that's, that's the type of guy that I am, like, I'm not, you know, this flashy person that a lot of people when they think investor or real estate, they think of that type of person, like, you know, I'd rather spend my money on more productive means versus a flashy car, you know, so, yeah, so you can't have the flashy cars down the road, but you just got to build, build the foundation.
Michael Elefante
yeah, one of the things that was a big takeaway for me when I first started was, you know, let your assets pay for your liabilities in life. And I think it was like Cashflow Quadrant or Rich Dad, Poor Dad, where I kind of got like, the first whiff of that concept. And that was right after I bought it, like a dream truck that I you know, I started making commission in my sales job, like, oh, I can afford this truck now paid it off as fast as possible. And I'm like, why would I do any of this? I was doing everything that I totally shouldn't do. So instead, sold the truck bought the assets, and now pay for the liabilities in life. And I'm like, This is what people were talking about. It makes total sense, right?
Mike Swenson
Yeah. And you can afford the truck and not feel guilty about it, because you've allowed the assets to pay for that.
Michael Elefante
Exactly. Yeah, you don't have to wake up every day and be miserable, miserable, but like unhappy driving it because you know, you're driving to a job that you have to go work in order to pay for the month and No, not at every month. So it's like a totally different feeling. Having cash flow paid for things in life.
Mike Swenson
So for Yeah, so for folks that want to find out more about you some of the tools, the offerings that you have, how can they do that?
Michael Elefante
Really everything flows through any of my social media platforms, Instagram or Tiktok would be a good starting point, which I think my handle is m elephant tastes It's where you can just search my name Michael Elefante. You should find me there. So yeah, feel free to drop me a comment or shoot me a DM I try and respond to everyone that reaches out with like a genuine question. I appreciate them.
Mike Swenson
Awesome. Well, thank you so much for coming on the show. Thank you for sharing with everybody, and just wish you the best of luck in the future.
Michael Elefante
Yeah, thanks so much for having me.
