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Robert Abasolo

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2022-08-07
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2022-08-07
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  1. “Yeah, definitely. So there's a sliding scale on this, okay? So it's not, again, there's no right or wrong. There's what's right for you in the moment that you're in. I think for most newbie investors, for most people getting started, what is 100% the most important thing is cash flow. And there are a couple reasons for this, right? Everyone wants to make a little extra money, and that's why we're getting into real estate. So if you want to make a thousand bucks a month, you want to buy a place. Like you want to buy a place, make a thousand bucks a month. You're not really as focused on like, oh, well, it went up $5,000 in value this year because it's quote unquote paper money, right? It's not really liquid. It's there in the house. You have the equity, but it's not something you can actually cash in without doing like a cash out refi or a HELOC, which we'll get in, you know, we possibly get into that later. So cash flow is really important because people want to make that side income. Cash flow is also very important for most newbie investors because most people that are getting into real estate have one dream, right? They want to quit their nine to five.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  2. “I like people starting in a way that subsidizes their life. And there are a few ways to do this, like one really powerful way to do this would be through a second home loan. And there are specific criteria that you have to follow. But an example of this would be with the second home loan, you can put down a 10% down payment and you can get into a property. Now, in order to do that, though, the criteria and the guidelines say that you have to occupy the property for a portion of the year.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  3. “Are you sure? Like, are you sure that's going to work? And I was like, no, definitely not. But we can't pay the $2,000. And our first reservation came in and it was for like 1,500 bucks and our rent was $1,800. And that was for like a two-week reservation. And I was like, oh my goodness. If I get another two-week reservation, I want to make like $1,200. That was a life-changing amount of money because that was our student loan for the month, our total loan balance on that. And I was like, this is crazy. And then the day before they were going to check in, they canceled their reservation. And I was like, oh my goodness, we are screwed. Within an hour or two, another reservation came in that was like $1,600. It was like $100 more for that same day. And I was like, oh, okay. And that was the day I told myself I'm going to be a millionaire from Airbnb.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  4. “Real hopelessness for us at that point, right? Because it was just like, how do I get out of this? Like, advertising copyrighters make good money as you go up the scale. You know, you can jump up from 40 to 50 to 70 to 90 to 100. But it was going to be years, like a decade. And I remember thinking like, oh, man, the day I make $100,000, I'm going to be set. It's going to be so great. And that was tough for us. But I think the real shift when I finally was like, oh, this is it. Like, I think I figured it out was when I rented my first Airbnb apartment. I was doing what's called rental arbitrage. And I don't do that much now, but that's how I got my start. And basically, we had just bought a house in LA and we had our apartment lease that we were in and we were going to have to pay $2,000 to break it, which is a lot of money, by the way, for us at that time as well. And I was like, we can't afford the $2,000. So we're just, let's just throw it on Airbnb. I was like, I've heard of this thing that you can rent your house to strangers, apparently, and they'll pay you. And my wife was like,”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  5. “I was like, hey, do you know? Do you know, are you going to get paid in three days? Hey, are you going to get paid in two days? She's like, I don't know. They like, they won't answer the question. They don't really know. And I remember her mom was visiting that day on the 15th. She flew in to come and see us. And I remember that was the day she was supposed to get paid. And we were laying in bed. And she had just woken up and she was looking at her phone and she checked the bank account and she was like, hey, I didn't get paid. And I was like, oh no. I was like, what are we going to do? We had like, I think we had like at that time like a hundred bucks in our account or something like that. So not quite, you know, what you were going through, but not super far. I mean, it's effectively the same thing, right? We had enough for a couple Chipotle burritos. But I remember that was like the next two weeks were the longest two weeks of my life because I was so petrified. I was like literally if there's like an auto payment on my credit card or if there's some bill that I have on autopay that I have forgotten about, we're going to overdraft and we're going to have to pay the $25 fee, which we didn't have. And that was, you know.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  6. “We weren't saving when you don't make money or you don't have a lot of money left over, you can't save it because you're scared to, right? You feel like moving it over to your savings account makes you more broke even though it's all in the same place, right? And I remember this one time my wife was transitioning from being a nanny, which she was right before she got her teaching job. And she went from that, which was paying like $15 an hour or something, to being a salaried teacher. We were like, okay, this is it. Like, this is what we needed, thank goodness, because, you know, we had a lot of credit card debt at that point. I think we had like $16,000, $20,000 somewhere in there and high interest credit card debt, by the way. And I remember the way that the financing worked with all that or like with the payroll is they weren't super clear on if my wife was going to get paid in two weeks or in four weeks. And that was a big deal for us because the student loan payments came in on the 15th of every month at that time.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  7. “It was a very long time before I was full of hope from a financial standpoint coming out of college. I'd worked a few internships in the advertising world. That was a creative copywriter. And my wife's a teacher, which they make great money. And so I think when we first started our jobs, I was making, oh, man, I want to say like $40,000 and negotiated that up from $38,000. And I was like, woohoo, I'm rich. That was my first real paying job. And my wife was making about $42 because she was a specialized teacher. We thought, oh, you know, like $80,000 roughly. We're good. Like this is great. But when you start stripping away taxes, you know, I think we were contributing like 1% of our income to retirement savings. You start taking away the thousand dollars in student loan payments and the thousand dollars in mortgage costs and then anything unexpected. I think we were left at the end of the month with like $1,000 of quote unquote discretionary income.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  8. “I was like, all right, you know what, man? Why am I fighting over? If you just value your time and you assign an hourly rate to your time and you start to think about that, I mean, I spent 10 hours fighting this insurance company or the warranty company, and I was out a lot of money just in my time.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  9. “This just happened to me, man. This is a really great example, okay? My pool filter broke and my home warranty is supposed to cover that. And so I paid the $65 that came out. And they said they sent someone out and the person said that it was broken because of a faulty installation, whatever. He didn't even look at it. He just wrote that up. And so I have spent the last two months fighting my home warranty company to fix this dang part. And honestly, the part was 500 bucks. And we have not used our pool at all and we've been very frustrated about not using the pool. And I was like, finally, like literally a week ago, I was like, you know what? I'm just going to pay the 500 bucks. And I felt really dumb in that moment because I was like, well, the result was the same. I paid the 500 had I paid it two months ago, then I would have been able to use my pool for two months, which would have contributed to the happiness of like our life because we use the pool like all the time. So that was a lesson for me that”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  10. “Not cringe so hard, but for some reason, I'm still fighting that broke mentality of like, oh, you know, it's 500 bucks. I shouldn't spend that. And so recently I've started making more strides in understanding that, you know what, when it comes to Airbnb, for example, I've got like 16, well, I guess now I actually have 36 units because I just close on a motel. But at a certain point, you don't have time to scrutinize every single expense. And it actually costs you more money to do that than to just pay the first available vendor to get your AC fixed. Because if you don't do that, you're going to have to refund the guests their entire stay. And it always ends up being a wash. So little by little, I'm trying to work on just spending the money on kind of convenience and spending the money on a quick.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  11. “Example, I would always be standing at the meeting room, like waiting to get the leftover sonate or whatever. And so people were just always like, oh, Rob's the deal guys, I was trying to get a deal, you know. And so now I'm still just so cheap. Like I made a video about this on my YouTube channel not too long ago called like the world's brokest millionaire and it really talks about how if you're a really good millionaire you strive to be broke and so what this means is you strive to be broke because instead of spending money on yourself, you're always trying to funnel that back into your real estate business or whatever entrepreneurship ventures you have before that though before my income had grown with my real estate portfolio i was just always broke and then i actually started making money and i just funneled my brokenness right into like all my investments i feel guilty spending any money on myself and it's something that i am working on to be honest like i don't have to treat myself this way like i can like order the avocado on my on my salad for a dollar fifty”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  12. “Oh man, this is the struggle of my life. If I'm being completely honest, this is the thing that really is the greatest bottleneck of my current, I don't know, life stage. And when I was getting started, I didn't have a ton of experience or money. Like, you know, if you watch the content on any of my platforms and you go to the comments, a lot of people are like, oh, it must be nice to be a trust fund baby and this and that. You know, and I'm always like, oh man, if only you knew that, my parents were immigrants. My dad was a doctor in Mexico. He left that behind and worked minimum wage for most of his career just to support us. So like, I didn't come for money and I had to pay for my own college with student loan debt. So I was really broke. And I was always made fun of by all of my friends. Not for being broke, but for being like, well, for being broke, but in the sense that I was always trying to get a deal, like they were always like, oh, here he is, trying to get the free meal. Like, you know, if a conference let out and they had ordered food at my company for.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  13. “No, that's a house hack, man. I mean, a house hack very simply is you subsidize your mortgage by renting out a room or a space in your house. It doesn't even have to be a room if you don't want it to be a really popular form of this is having a roommate and renting out your room, another, you know, the origins of Airbnb was like air, bed, and breakfast and the air in that means air mattress. And people would put air mattresses in their living room and rent it out for 20 bucks a night. And I really appreciate that. So if you look at my house in LA, for example, that studio that I was telling you about wasn't even really much of a space. It was like a crawl space that the previous owner converted into what's called a bonus room. And that we were renting that out and we were able to, you know, make, I think on that one, two to three thousand dollars a month just, you know, out of the 4,400 mortgage that we had. So there is no technical. I mean, it's not a technical term. No one's really mandating the terminology. But I think someone pays you to live on your property for any amount of time while you live there.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  14. “Example, if you can save your monthly mortgage and use that to invest, I always think that's a really great starting point.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  15. “And we moved to LA and still relatively broke, by the way. And we bought a house that was four times as expensive, and we still house hacked. It had a studio underneath. And then I rented out the guest room to a buddy of mine. And then I rented out the studio on Airbnb. And between that and my other Airbnb that had just launched, I wasn't paying a mortgage. And my mortgage on that house was about $4,400 a month or something like that, which again, a sizable. I think at that point it was about the 25% of our income thing. Over the course of owning that house in LA, I have made between $180 to $200. We're probably closer to like $210 now in rents. And that's how much I would have paid to a mortgage had I not house hacked. And I've been able to roll that, you know, let's call it $200,000 into the portfolio that I have today. And it's really just catapulted like where I am today. So it's all because I wasn't paying a mortgage. That's kind of a very practical.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT

  16. “You know, there's a few things that I always say people. You can approach this so many ways, Trey. I would say ultimately there is no right or wrong for this stuff. There's just what's right for you. And honestly, it really depends on where you are in your life and how much capital you have and all that stuff. But my first piece of advice for most people, honestly, like if they really want to get into real estate, I try to get people to stop paying their mortgage. And what I mean by that is, how can you subsidize your mortgage in a way that allows you to stash that cash to basically allow you to invest, right? Really great example of this. My favorite example of this actually is a house hack. For me, I was house hacking really since the very first house that I purchased. I lived in Kansas City. I think our mortgage was like $159,000. Our mortgage, I think it was like $1,050, which was sizable. That was like 25% of our take home at that point. We brought in a roommate and he was paying us $400 a month. And I was like, oh my goodness, we are rich. We've done it.”

    2022-08-07 · We Study Billionaires · TIP467: The King of AirBNB w/ Robert Abasolo · IDENTIFIED FROM THE TRANSCRIPT