Aug 23, 2019
More short-term rentals are cropping up every day thanks to platforms like Airbnb. But how does one get started with this type of business? And how does one prepare themselves to build out the system that's required for short-term rental success?
In this episode, Brandon Telesmanic of BLT Enterprises shares his secrets on how he became successful with this short-term rental business and how he managed to scale it up.
Contact Brandon:
https://www.marcusmillichap.com/about-us/agents/brandon-telesmanic-btelesmanic-1
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Automated Transcript Below:
Dean Soto 0:00
Hey, this is Dean Soto founder of freedom in five minutes and
freedom than five minutes.com. And we're here again with another
freedom in five minutes podcast episode. Today's topic is this
building wealth with short term investment properties, that and
more coming up. Oh, cool. So this is, this is gonna be a really
cool episode because this is something that I've been extremely
interested in, because I have several properties, but they're all
long term leases. And it's interesting because while while it might
be nice to get those long term leases, you there there with the
revolution of short term investment property, there's so many more
avenues to make more off of the assets that you acquire in the real
estate space. And I'm excited about this, because I have Brandon
Brandon talismanic, who is an expert in this he is He He is an
expert in actually setting up people with with short term with
short term property investments. And and I wanted to get him on
here. He he he has a just a great amount of experience with this
particular subject. And he is the owner of BLT Enterprises. And I
just thought it'd be great to have him on right now. So all that
being said, Brandon, how you doing my man?
Brandon Telesmanic 1:46
Doing well.
Dean Soto 1:47
Cool. So
Brandon Telesmanic 1:49
thanks for having me on here.
Dean Soto 1:50
Oh, no problem. No problem. It's, it's, it's my pleasure, for sure.
Because this is a topic that is I think, is going to be extremely
valuable to a lot of people. So first and foremost, give a little
bit of background about yourself, and how you got into this
particular industry that you're in right now with the short term
rentals.
Brandon Telesmanic 2:13
Yeah, so.
So I am 34 years old right now, I, I graduated from physical therapy school when I was about 2025, I think and I was living down in Southern California, and was living actually right on the beach in Newport. Oh, fantastic. And that's Yeah, the
Unknown Speaker 2:37
gig there.
Brandon Telesmanic 2:39
Yeah, not a bad gig at all. And that was, I graduated, and I was
working a few different jobs and hustling and making pretty good
money. But after living there for a few years, it became very clear
to me that I was not going to be able to ever afford one of these
homes that I was running on the beach, with my current finances,
and you know, what I was projected to make in the future. And so,
you know, at that time, there was a few different life changes with
me. And I made the decision to move back to the Central Valley
where I'm originally from from Fresno. And I was motivated, because
one I wanted to own a house and I wanted to start investing my
money rather than, you know, putting it into rent. And my family
owns a business in the Central Valley, a therapy business that I
wanted to be part of. And everything just kind of, you know, worked
itself out, I'd leave behind a lot of friends there. And that was
definitely definitely the hardest part. But came back to Fresno was
able to buy buy a single family home at a very good time, because
it was just just at the end of when the market was crashing around
2011. And started working with family business, things were going
pretty well, I was able to rent out the extra rooms in my house to
pay off my mortgage, and did that for a few years. And you know, I
was pretty happy with that. But as I started getting a little bit
older roommates moved out, I had a very serious girlfriend who's
now my wife, and I was not spending really much time at the house
at all, maybe 10% of the time of the house. So either hanging out
with other people or with my wife, and I just felt like man, I'm
paying this mortgage for this house. And under utilizing it, this
thing needs to be making money, I need to move out a year, you
know, I can rent this thing out for 16 1700 dollars a month
potentially, and, and be making money off of it. And at that time,
you know, you there's a lot of a lot of news about Airbnb, people
are talking about them, mainly in bigger cities, definitely not in
Fresno. And so I did some research and talk to a few different
people that I know, mainly, mainly in the Bay Area. And, you know,
most of the people said, You know who the hell is going to come to
Fresno, that doesn't really make much sense, you should just, you
know, you should just maybe get an apartment and rent out the house
and, and make a little bit of money that way.
Anyways, I decided that I was going to put it as a short term rental, regardless of what everyone else was saying. And I cleaned the house up really nice, got some furniture. And the goal originally was just to make, you know, five $600, because I was still going to be partially part time living in the house, and then renting it out. And so that would help me, you know, offset my mortgage payment. And so I got it all all set up and was seemingly pretty proud of what I had put on the market took some good pictures, or I thought were good pictures. And lo and behold, the play started getting booked up. And, and it wasn't just, you know, one or two bookings this was this is approximately six years ago. And, and so it started getting booked up. And there was it was just very evident that there was a demand for this. Because regardless of what people in Fresno thought about it, it wasn't people in president that were renting the home, it was people coming from LA or San Francisco or, you know, out of the state, or sometimes even out of the country that were running the running the home. And so because, you know, there was so much demand, I was able to put more money into the house, make it nicer respond to, you know, people's feedback. And that's kind of, that's the basis of the business. And so from there, I was able to just continue to reinvest the money that I was making from the short term rental, that one short term rental, and continue to buy them remodel the homes, and, and then continue to rent them out. And in that time, you know, I got married, and my wife was able to bring in a good income. She brought many valuable things to the table, organization. And yeah, just continued to scale up. And so now I'm at a point where five short term rentals and have a team that's helping me out, and it's going pretty well. Wow,
Dean Soto 7:46
I love that man. It's cool, because as you were, as you were
actually saying, as you were saying that that the people here were
in because I I get to be a part of this central valley crew now
that now that I'm in pray there, California right next door to
Fresno. When people were saying like there's nothing here in
Fresno, why would anybody ever come here? One of the first times I
ever used personally used Airbnb was when we were traveling from
Southern California to Idaho, and we stopped in this literally like
no name, town like nobody, I it just it was a small, small, small
town. I did population was probably like 1000. But it was halfway
to where we wanted to go. And it was perfect. Because we we we
drove halfway to our final destination and stayed there. We
actually stayed at that place for two nights, I think. And then
because we wanted to go see Reno and a couple other places was it
wasn't it was outside of Reno. And had had you listened to them?
You wouldn't have got those people who are are traveling from
Oregon down to Southern California or or whatever, you know.
Brandon Telesmanic 9:14
Yeah, yeah, that is a big misconception that no one comes to Fresno
or that people only utilize short term rentals when they're going
on vacation. So, you know, when people ask the question, well,
who's coming to Fresno, you think, you know, President has a lot of
hotels, you know, they're not the nicest hotels, but they're
getting booked and they're doing business. So if a town has a
hotel, and most likely, you know, a short term rental will work on
some level, you know, people are coming to Fresno, oftentimes to
visit family, for weddings, for birthdays, for any event that can
take place anywhere. And large groups like to get together and stay
together and it makes it more fun. And so you know, the the short
term rental is far more desirable than you know, even renting a
hotel out. And it's not like we really have sweets or anything like
that, that you could rent out in Fresno. So it becomes a very, very
good alternative. And then in addition to that, with, with the
Central Valley, there's a fair amount of development going on. And
you have workers that are regularly coming to the valley, and you
know, need need places to stay. And so those are your, you know,
Monday through Friday gap. Yeah, where if you if you go have a
short term rental and in, say Lake Tahoe, you're going to get
guests that are every weekend going to be booked. And you can
probably put the rate insanely high on the weekend. Yeah, but who's
going to be staying there Monday? through Thursday? Probably it's
going to be a lot harder to fill, especially in the in the
offseason. So yep, that's where, you know, places like Fresno, or
Visalia, or said, you could make pretty good business out of it.
Yeah, this is great, man. This is
Dean Soto 11:11
that that's all the stuff that that is. So traditionally, when you
think of any type of rental, it's it's the it's, at least for me,
it's the it's that the typical where it's a it's a lease, you have
somebody in there, you get a turnkey, you get cash flow from it.
All of those factors that you that you're talking about, right,
there are things that with, you know, your typical long term lease
one or two year lease, you're not going to have that as a those as
an issue, or, or a factor. Which brings me to the question, like
what, what are what? Are they comparing it to your typical long
term, you're renting out your house to somebody for a year or two?
what's what's the what are the big differences? And what are the
pros and cons of each one? And why do you think? And do you think
short term rentals beat out? Long Term rentals in in the long run?
No pun intended?
Brandon Telesmanic 12:17
Yeah. So you really, to answer the question of do they beat them
out? It really depends on what your specific goals are. If your
goals are to maximize your profits, then the no question you can
make a lot more money as a short term rental. But it's also the
difference between a passive and active investment. And so a long
term rental is going to be more passive. There's some work up front
in finding the tenant preparing the home each time you have a
turnover. And you know, then you just kind of sit back and probably
either manage it yourself or have a management team, that really it
shouldn't be too labor intensive. There's lots of, you know,
potential issues with tenants that don't pay rent, and then you
have they have their renters rights, and you know, evicting tenants
and things like that can be a major major headache. Yep. So that's,
you know, I, I don't have any of the homes as, as long term
rentals, my dad has been around it, you know, my whole life. But
with the short term rental, you you set up the even if it's longer
than 30 days usually do the rentals in increments of 30 days. So
and the reason for that is so that the renter, or you know, your
tenant, whatever you want to call, it, doesn't have any rental
rights, so you're not going to get a squatter in your property.
They're throwing a loud party or they you know, damage your
property, you can kick them out. And that's, that's within your
rights as the owner of home if they're not abiding by your rules.
Oh, I
Dean Soto 14:04
didn't, I didn't know that. So. So for those who are listening,
basically, what you're saying is, if you if you say if, if you were
to allow, like a duration longer than 30 days, and not like chunk
it out, they would be able to you run the risk of them having
certain rights as, as renters, as opposed to if you say, let them
only do 30 days at a time, is that kind of what you're saying?
Brandon Telesmanic 14:32
Correct? Yeah, I mean, I've never had to go down that path. But
that's pretty much the gist of it. Wow,
Dean Soto 14:39
that's great.
Brandon Telesmanic 14:40
So, so with, with the short term rentals, you have, you always have
to remember that you're really in the customer service business,
and a long term renter, your landlord, but a short term rental,
you're more like, you know, more like a should be, in my opinion,
like a luxury hotel. Yeah, where you have clients that are coming,
and your goal is to make those clients happy with with their
accommodations. And so, you know, that means different things for
each person, but, you know, you have to put a lot of time and money
and effort into it into setting up the property appropriately. And
then regularly, maintaining it, cleaning it, you know, having a
crew really because it's pretty hard to maintain, by yourself, if
you're, if you're doing multiple homes, that that's going to help
you run, run these, maintain these homes and run them efficiently.
So that you know, you have you have happy customers that are going
to leave positive reviews. And, and so where you know, as a, as a
long term rental, you're not getting any reviews on your property,
there's no site that I know of that's going to review you, you
know, if you have a single family home, and you're running it out,
they're not going to review the landlord, maybe on larger apartment
complexes, there definitely is. But yeah, with with a short term
rental business, you have to constantly make adjustments and and do
everything you can to keep your customers happy. So that, that you
keep your reviews up, because that's, that's how you're going to
generate more businesses, people seeing those reviews and knowing
that it's a quality place to stay at.
Dean Soto 16:29
That's interesting. That's so you're
Brandon Telesmanic 16:31
so there's a lot, a lot more time and effort, you know, you really
have to be available 24. Seven, to deal with, you know, any
potential issues that come up. So it's a very, very active, active
investment. Well, the the
Dean Soto 16:48
Yeah, it seems it seems like you get it. So because it's more
active, it really is the difference between like a cow flow and
investment from from, you know, sit back and let the cash come in
type thing. And actually creating a business a hospitality
business.
Brandon Telesmanic 17:12
Where Absolutely, it's, you're creating a hospitality business,
Dean Soto 17:16
and is it and that's why and hence why you're actually able to make
more in profit. If if you actually treat it like a business. Mm
hmm. So that's really interesting.
Brandon Telesmanic 17:34
Yeah, and I'll say that there are people that, you know, do the
minimum and provide the most basic accommodations. And, you know,
there's, there's different ways to do it. I'm not saying what's
right and what's wrong, but those people are still making money,
and many of them are making very good money because they're
capitalizing on opportunity out there. Yeah, it's been my approach
to the do it the best I can and provide the best product I can
because I believe if I do that, then I'm going to, you know, net,
the most amount of, you know, returns profit. And I feel like
that's what's happened. But, you know, there's other ways to do it
as well. But yeah,
Dean Soto 18:17
cuz it's, I think if with that type of mindset, it's as as it
becomes more and more and more popular. It people expect a lot
more. Because I remember my first time with Airbnb, I was just
like, I was just happy to get the house. But then I started seeing
Yeah, yeah, you know, I started seeing different of different
places I stayed at they would they would have the cure eggs and
cure eggs all set up for you. They would all they have waters, they
have coffee stations. Yeah, you know, all of that. And you start
actually expecting more and expecting more and expecting more. The
last place I stayed in Chula this stuff for was doing a Brazilian
Jiu Jitsu tournament. It was a duplex. And we we we paid $250 a
night for this duplex, because there was because there was a lot of
people staying for this tournament there. And, and we walk in,
there is no waters in the fridge there was there was it was super
small and cramped. There was no snacks and whatever. And I'm like,
hey, this sucks. I was like, you know, I just paid 250 bucks. And
like, I'm so used to getting all of what you would typically get at
a hotel, you know?
Brandon Telesmanic 19:40
Yeah, yeah, yeah, the level of homes and the quality. On all the
short term rental websites have gone up pretty dramatically over
the past three to three years, I would say. And you know, Airbnb
has different levels. Now, where there's Airbnb plus Airbnb, Lux.
Lux, I think they called her luxury, which is the highest level.
Yeah, and, you know, these homes are under a strict, you know,
criteria of guidelines that they have to adhere to, to achieve
that. That status before it was the host, you know, the highest
level would be that your be like super hosts on Airbnb, or I forget
what they call it on Dr. Bo, but that was just more more generated
by your reviews, and less so you know, the criteria of your home.
But now there's all these other ways to differentiate these homes.
And, and people have a high expectation, they expect a very high
level of cleanliness. And I think you have a lot of people that
probably wouldn't have been open to the idea of a short term
rental, three, four years ago that are, are coming over, you know,
really want luxury accommodations. Yeah, and, and that's good. I
mean, that means more business, those are probably the most
difficult people to have as guests. But, you know, you gotta, you
gotta do your best to accommodate everyone and, and do your best
to, you know, have a high level across the board, whether you're
having, you know, some some guys that are coming to, you know, work
and do a plumbing job for five days, or a family of four that's
coming for a swim tournament.
Dean Soto 21:30
Yeah. Man, I love this. I love this. So, so how how do how, like,
what are some of the steps to even get started? in doing any of
this type of short term rental stuff? Like what would you say like,
so if someone, someone who had the capital to to actually invest in
something like this, where where would they start? Like, what are
some of the what is what are some of the kind of like the, I should
say, like the, I don't know, roadblocks, or, or just like,
Brandon Telesmanic 22:07
yeah, yeah, I understand what you're saying. Yeah, yeah. So the
first thing is, you know, you've got to make the commitment for the
time and not only have the capital to be able to, you know, put a
down payment on investment property, but probably put a significant
amount of money into remodeling that property. And maybe you could
buy a property that already has under, undergone some remodeling,
or just looks nice to begin with. And then you've got to furnish
it. And, you know, buy all the things that you need to run the
Airbnb, all the linens and cleaning supplies, and, you know, all of
that stuff. And, and so, so the biggest thing is finding the
correct property. And right now the market is, is Hi. And it would
be hard to find a property right now, that would make sense, under
my criteria for something I would buy. And the Fresno market, and I
would say it's fairly saturated. But if you look, and I'm talking,
you know, just about the Central Valley area, you can apply this
to, you know, anywhere wherever you're at. But, you know, look
looking more in some of these other cities around Fresno, Visalia
said, Bakersfield, that, that don't have a huge number of short
term rentals. But you know, there is a most likely a need there,
that would be that would be the market that I would be looking at.
And, and so to share a little bit about how I purchased the homes,
the the criteria that I was using, was that the purchase price of
the home had to make sense. Basically, if I looked at it in, in
three different ways needed to make sense, obviously, as a short
term rental that I was going to be able to make, you know, very
good profit on it, it needed to make sense, as a long term rental,
where I would at least make, you know, $200 a month. And then
thirdly, it needed to make sense as a flip. So if I wanted to
completely get out of it all together, I could turn around and sell
the house and make a profit off of it. And so, you know, it's hard,
right now to hit those last two criteria. Yeah. So first one, you
can you can make money as a short term rental. But if they change
the laws in Fresno County, you know, then, well, I don't want to be
stuck with this overpriced home and all this furniture that, you
know, I've got to sell on Craigslist or something. Yeah. So yeah,
so that's those, there's a three criteria. And that's the markets
at a place right now where it's where it's tough, but there are
unique properties, and you know, different ways to think about it,
and different types of properties that you can bring on the market.
But you've also got to think about your proximity to the property,
and how time intensive it is, and how frequently you're going to
need to be going there. And, and managing it. Whether it's, you
know, doing it yourself or meeting with people that are going to,
you know, do do the work for you. So, you know, those are the those
are the big things, big things to consider.
Dean Soto 25:44
Yeah, man, I love I love that, though. Especially the three
criteria, because, because, yeah, I've been in situations where
I've had to offload real estate. And if if I was if I did you know,
if I didn't have that criteria, and which I didn't at the time, I
just got lucky, by the way.
Brandon Telesmanic 26:09
That's usually how it happens when you start
Dean Soto 26:11
Yeah.
Brandon Telesmanic 26:12
Put yourself in the right position.
Dean Soto 26:14
Yeah. And and man, but But yeah, like not being able to flip it and
not, you know, offload it or be able to get the the minimum of cash
flow from a long term lease. Those those are actually really,
because I know my my, for me, I probably would have just looked at
the profit from long term lease and from short term, but I didn't
even consider, I didn't even consider you know, things can happen.
laws can change, things, things, things can happen to where you
they won't let you do a short term things. I have a friend in
Hawaii, where they have to get like permits and stuff like that for
it. They don't always hand them out, you know?
Brandon Telesmanic 27:03
Yeah, yeah. Yeah. Yeah, the laws, I mean, we really have no control
over, you know, when they, when they change the laws, laws are
different from county to county and from city to city. And they
could be they could change them at any time. I mean, I keep up to
date with, you know, what's coming down the pipeline. And in
Fresno, I would say is better. Fresno County is, is more insulated
than lots of these other big cities, like, you know, Santa Monica,
or San Francisco, for example, where there's just such a huge
rental shortage, that they don't want short term rentals, because
those are eating up places that, you know, people could live in.
Yeah, long term. Yep. So Fresno doesn't really have that problem.
It's cool. Because like,
Dean Soto 27:51
yeah, I mean, it kind of it goes toward is actually kind of goes
toward the, the five minute mindset shift, five minutes, strategic
mindset shift, question that I always ask people, and, and now's
the time to actually start doing it to at least trying to do the
short term rental because, you know, ride the wave when you can,
and one of the things that, because you actually filled out my
questionnaire, so I knew what this was going to be, you mentioned
that that your your five minute mindset shift is actually, you
know, doing things as quickly as possible. Can you elaborate on
that?
Brandon Telesmanic 28:37
Well, yeah, making the my five minute mindset mindset shift is more
so than doing things as quickly as possible, it's more to believe
in the product that you're putting out there. And, as opposed to
trying to put a little money in something as possible and try to
get as much out of it, and little effort, you know, trying to see
if it works, well, that works to a certain degree, but at a certain
point, you have to believe in your idea, and invest the capital,
and time and be proud of what you put out there. I am saying. So
rather than that, how you're going to have long term success, and
be able to, you know, really have pride in the product that that
you're putting out there,
Dean Soto 29:31
I see what you're saying, Okay, now I get I get the the language
that you use to basically getting out of the mindset of trying to
do something quickly and get paid quickly. But having much rather
than that having the the long term in mind that, like, where where
you might not see a CA, you know, get rich type quick thing happen.
But in the long term, it did you build you build wealth and
stability, overall, as that kind of a kind of,
Brandon Telesmanic 30:08
absolutely, right? That's absolutely right. I feel like when I was
when I was working, you know, as a physical therapist, you're,
you're just trying to work as many hours as you can, and try to
make as big of a paycheck as you can. But the big shift, for me
with this business was that I did not want the amount of hours I
was working to be directly correlated to my income. And so you
know, with this business, it's always been about doing things the
right way, setting it up appropriately, and setting up the business
so it can scale up. And once it scales up, then you're able to, you
know, realize some of those larger profits. And, you know, I'm at
the point now, which not it doesn't fantastic, but haven't been
able to transition careers where I'm managing this business, and
now involved in commercial real estate, and still do a little bit
of physical therapy here and there. But I'm less tied to, you know,
that hourly income.
Dean Soto 31:18
And that's what we like here on the on freedom in five minutes, all
about scaling, yeah, being able to scale, automate, and so on, you
know, because that's, yeah, that that is a big, big change. From
that kind of small business mindset of, of, I'm going to work this
many hours, I'm going to get this many clients, and, you know, I'm
going to cap myself off rather than building out systems for your
short term rentals, and then building even building, you know, sale
systems and stuff for your, for the commercial real estate that
you're you're into now. But so that so that you have the time to do
that, in turn that active active income into a semi passive income,
if not totally passive through through business system. So that's
pretty, pretty awesome change.
Brandon Telesmanic 32:11
Yeah, yeah, it's been good.
Dean Soto 32:12
So how can people reach you because, you know, rather than trying
to do it on their own, and, and basically fail, because that can
happen? I've been in situations where if I did not have somebody
who was a mentor, I would have crashed and burned very hard. In
this in in any type of investment type stuff like this, you can
really get burned? How can people reach you and actually work with
you? who are interested in doing short term rental properties?
Brandon Telesmanic 32:53
Yeah, well, my link will, from my website, with Marcus and
Millichap will be on. You're on your website, they can just access
that, and then email me and I'll be happy to help them out.
Dean Soto 33:09
Awesome. Awesome. So yeah, though, that'll be that link will be in
the show notes. So if you check out the show notes on your iPhone,
that link will be on there. And, and you can go and work directly
with Brandon and save yourself a lot of trouble, especially when it
comes not just with getting the property itself, but actually
building out the system that's required for for short term rental
success. And there's not there's not a lot of people out there yet
that offer this type of offer the the the ability to do this, I
have a I have a few friends. I have a friend in Memphis that does
it for a select few people, but it's something that I think is
going to be the wave of the future. So you're like, on on top of it
already. So it's it. I'm excited for anybody who starts working
with you. Yeah, yeah. Thank you. Awesome, man. Well, thank you so
much for being on the show. This is this super exciting. And it I
think it's, it's this is going to be one of seriously one of the
best episodes that we had, because have because it really is we're
only seeing the beginning of these types of short term rental
opportunities. And I believe that within the next decade or two,
it's going to be it's going to be very, very common place to and in
your people are going to be essentially kicking themselves for not
moving in this particular direction. So I really appreciate you
sharing all the stuff that you know,
Brandon Telesmanic 34:47
well, I hope, I hope that some direction that it moves in.
Dean Soto 34:51
That's my prediction. That's my prediction. Hope. Alright, Brandon,
thank you so much. And guys, if you want to work with Brandon, once
again, that link is going to be in the show notes. And it'll also
be on the blog post that we do over at freedom and five minutes
calm forward slash blog. If you go and check out the actual blog
posts that we do for this, it'll also be on there as well. So that
is the end of this particular episode, but it's not the end of the
podcast. So if you want to have more of these, make sure you
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right. So we will see you in the next freedom in five minutes
episode.