Finding Financial Freedom In Short-Term Rentals With Michael Elefante
Real estate offers different paths toward achieving financial freedom. Currently popular is short-term rentals. How do you seize the opportunities this space offers? What can you do to stand out? In this episode, Stefanie Peters sits down with none other than a real estate investor and short-term rental expert, Michael Elefante. Michael is also the founder of BNB Investor Academy and the co-founder of Home Team Vacation Rentals, Somerled Designs and STRhub. With all these titles under his belt, he offers great insights and tips on digital marketing your properties through sites like Airbnb. He dives deep into dynamic pricing, game-changing platforms, and top markets. Providing more wisdom, Michael then shares the great lessons he learned that helped him in both his professional and personal life.
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Listen to the podcast here
Finding Financial Freedom In Short-Term Rentals With Michael Elefante
I have my co-host here, Ben Peters, and we have a phenomenal guest here. Michael Elefante is a real estate investor and a short-term rental expert. He is one of the lead educators in the industry and has over a million followers on social media. I was telling my brother right before the show, “This guy is on point in how he writes copy, does marketing, and tells stories.” Take note. If you are on the struggle bus with social media, check him out.
Also, Michael has coached over 900 people on how to successfully find, invest, and manage short-term rentals. It can be such a lucrative market, but if you don’t know how to do it, you will lose your shirt. I know from experience I’ve done great and not so great. He is going to share many amazing tips there. He’s also the Founder of BNB Investor Academy. It’s an incredible platform. He’s the Cofounder of Hometeam Vacation Rentals. That’s another thing that you want to sidestep the crazy of bad property managers. Check it out. Also, Somerled Designs and STR Hub.
Thanks for being on, Michael.
I appreciate you having me on. It’s going to be a fun conversation.
It was fun hearing a little bit of a backstory. We stopped you because we want to share all of this with our readers before we started interviewing. I’d love for you to share your backstory, your education, your rock bottom moment, and how this all came to be.
I got a little carried away in the moment of the story but I’ll try and keep it somewhat short. I grew up in Chapel Hill, North Carolina college town. I love sports. I played basketball and baseball through high school. I played baseball in Division I in a small school, Elon University in North Carolina. I played there for four years. I had an injury one year, so I redshirted and was hoping to play professionally. I had the talent too, but it didn’t quite pan out both injury-wise and performance-wise. Maybe I didn’t have the talent for it, all hindsight. After I graduated, I had a relatively high GPA in the business school there and Finance was my degree. I took a part-time sales job because I wasn’t sure.
I was waiting to see if I would get drafted, and then I was going to decide if I wanted to use that last year of eligibility. While taking a part-time sales job, it was pre-selling this awful product called Helix Medical. I was going door to door, had no sales training, and didn’t know anything. I secured two meetings and completely bombed those. The lady took the meeting. She’s an office manager and probably thought I was a cute little college boy. That was terrible. I didn’t make a single sale, a single dollar. I was like, “I got to make money.” I was still training a little bit if I was going to go back. I applied to all these jobs, like some part-time jobs, and some internships, and it was in South Florida.
I was living in the West Palm Beach area in Jupiter. I swear the only two people who interviewed me were Dunking Donuts and Chipotle. I had results like, “I don’t even care. I need to make some money for gas and food.” Chipotle didn’t hire me. I made it to the final interview. They hired some high school kids. I was more qualified than the store manager on paper.
Anyways, Dunking Donuts did hire me. She liked me. I was waking up at 5:00 in the morning pouring coffee, and I was okay with it. I was like, “I’m going to go back for a fifth year and see what happens.” Pouring coffee for $7.25 an hour sucked. That was a moment I was like, “I got to do better than this.” Fast forward, I did that. I don’t think I ate a donut the whole time. I lost some weight. I got in better shape, so that was a good summer. It was self-control to the fullest.
I went back for a fifth year, played baseball, and had a great time. I didn’t get drafted. I wasn’t having high expectations there and got my first real job post-college. In June 2016, I was working as an entry-level sales rep, business development, pounding the phone. I showed up and they gave me a computer and a desk phone, and said, “Pound the phones.” I’m like, “Who the heck do I call? What do I say? I don’t know what I’m doing.”
The training was awful. I quickly learned to hate it. I would have this numb feeling driving home from work into the little apartment that I could barely afford in Dallas, Texas by myself before my now wife moved out to live with me. We were dating for over a year at that point. I was like, “I got to figure something out.” I started to listen to audiobooks, YouTube, and podcasts on the way to and from work in the Dallas traffic.
One thing that resonated with me was these people who talked about this term financial freedom, financial independence, or passive income. I’m like, “What does all this mean? For somebody who has no money, no experience, and no background, how do I get started?” I started to dive into all of it, and a lot of it was still a little overwhelming for me.
I migrated to the one thing that made a little bit of sense, which was real estate. I was like, “Maybe I do wholesaling.” I still don’t understand that concept at the time. “What about rental properties? How much does it take to get a rental property? In the meantime, I’m going to focus on my income.” I worked a side hustle and worked at a vineyard up in McKinney, Texas on the weekends and some weeknights. I would make more there per hour after taxes than I did pre-tax at my daily sales job, pouring wine and being like a little sous chef. I was like, “I’m going to stack the money.” I was an idiot. I went and bought a $44,000 souped-up truck.
I was like, “I’m in Texas, I want a truck.” I’ve never had anything super nice. I’ve never bought anything for myself at this point in time. I’m glad I did it because it taught me a debt for the first time, good debt and bad debt. I paid that truck off within two years as fast as I possibly could. I was paying $1,000 to $2,000 a month. I was like Dave Ramsey’s mindset, “I was going to get rid of that debt, just get it off my back.” Meanwhile, I was focusing on my job, got a promotion, and got a job at Google doing sales. That was okay. I met a ton of great people. I was in Austin, Texas then. I took a job in Nashville and worked my way up to an outside sales rep where all the money is to be made in sales.
The moral of that story is to focus on my income because I realized I couldn’t save my way to financial freedom. I was keeping a personal budget. I’m saving $200 a week or a month even. That’s not going to cut it. That’s why I got the side hustle job, paid the truck off, and I’m like, “I could have invested that money at a low-interest rate on the truck.” I got a job in Nashville, and that’s when I started to learn about Airbnb. I was like, “I’m ready to look at small multifamily or a single-family home rental.”
I was doing the math. It was $200 a door like you hear on BiggerPockets all the time. I’m like, “I need 50 units of cashflow, $10,000. How long is that going to take me? How much other people’s money I am going to have to use? I could do one short-term rental and potentially cashflow for $1,000 to $2,000 a month.” Little did I know that the first property I bought at the end of 2019 had the actual potential it did if you execute well. That property cashflow now was over $6,000 a month, a single property.
I was like, “All I need is two of these things, and I’m out.” COVID hit, so it pivoted our change. We focused on rural areas and got our second property in the mountains. Fast forward to now, my wife and I own and operate six short-term rentals. We’re under contract for our seventh. We own one in Nashville Gatlinburg and Fort Lauderdale, and this next one is in Asheville, North Carolina.
All these other things, content-wise, fell into place, which we can get to here in a little bit. That’s the general background and the lows and slowly working my way up and my knowledge to give myself the confidence to make that first investment. I’m glad I did. It’s been life-changing. A lot of things have happened over the past few years that I honestly never thought would be possible for myself. It’s cool.
I can identify with you in the fact that I had a chance to play pro basketball. I played at a small school like you. It fell through because of an injury. My very first job was cold calling. I feel you in my soul. It was a tough way to make some money, but it propelled me to what I do now, so I can identify with that. Here’s one of my first questions right off the bat. Short-term rentals have become very popular. How would you say you set yourself apart from an average short-term rental investor with your properties?
The biggest things that set us apart and will help us have longevity in the markets we operate in is doing the market research upfront to understand not just what markets are good but what ZIP codes, what neighborhoods, what property types, what size of the property, who’s the client avatar, taking that information, and finding a property that fits the location. Does it have views? Is the proximity near the activities that people want to be nearby? Most importantly, creating an experience that you can digitally market with through sites like Airbnb, Vrbo, and Direct Booking.
We live in a digital world, and a lot of people don’t understand this. They think, “I’ll buy a property, bare-bones furniture, throw it up on Airbnb, and I’m going to be rich.” As it gets more competitive, it’s a rude awakening that you won’t cashflow that well. You still can if your pricing strategy is good, but you won’t cashflow that well if you’re not putting something out there that people are drooling at the mouth like, “I have to stay there. That’s cool. That photo moment is cool. I don’t have a hot tub. I don’t have a game room. I want that experience with my friends or my family.”
It’s about crafting the experience, staging it with professional photos, and then marketing it in a way online. It’s like scrolling on TikTok. You have 1 or 2 seconds to earn somebody’s interest to watch the next ten seconds and watch the full video. Airbnb’s no different. You have to earn 1 click through 1 photo and a title to get to the splash page, which is five photos. You see people make the biggest mistake all the time. The first five photos are of the front door from different angles. I’m like, “What are you doing?”
That’s where traditional property managers completely poop the bed. Throw your five best key moments of the house up right there, and that’s going to get someone’s interest to click. “I want to see all the photos and read the description. I want to look at the reviews.” That’s going to help impressions and conversions like bookings, positive reviews, and then ultimately long-term ranking in Airbnb search, which I was talking about longevity and the listing.
The last thing I’ll mention is the operations. You have to have those super dialed in. You can automate a lot of it or work with an actual good PM. Most of them are not good with revenue management and operations. Revenue management is the biggest thing, dynamic pricing. You have to understand the pulse of your market. I see too many people in Nashville, Tennessee, for example, as a market that walk past probably $20,000 a year in revenue because they don’t know how to price midweek days or not pricing enough on weekends.
It’s a matter of getting booked at what is your peak rate that you will get booked at on busy days and then what is the threshold that you need to come down to be one of the properties that get booked when people are a little more price-conscious. If you can figure the pricing out on top of the design of marketing, you’re going to do extremely well. That’s what we’ve been able to figure out on our own. It doesn’t have to be super complicated either. It’s a long-winded answer for you, Ben, but I hope I answered it.
Short-Term Rentals: If you can figure the pricing out on top of the design of marketing, you’re going to do extremely well.
That’s so powerful because even for our family, we’ve done Airbnb for quite a while. The first one didn’t get a lot of traction. For the second one that I did, I tweaked little things on the platform, the pictures, and videos, and even put it on my own social media stuff. It was amazing. Dynamic pricing is incredible because people are leaving thousands and thousands of dollars on the table because they don’t know about one software.
To me, not all Airbnbs are created equal. That’s so far from the truth. When I look and see some of your numbers, I’m like, “That’s phenomenal, but success leaves clues.” Those tipping points are everything. What would you say have been your biggest leaps in the business that you’re like, “This was something that took me to new heights,” from going to Dunking Donuts to a seven-figure business and growing? Tell us the details.
Looking back, you don’t have to have an absurd amount of money to get started in short-term rentals, which is cool. There’s rental arbitrage, partnering, co-hosting, and all these other strategies that you can start sooner. Also, you don’t have to know everything to get started. Even when I started, I thought I knew everything, and it took me twelve months to get everything dialed in. I wish I paid for mentorship initially. A large part of the reason why I do coaching now is to help accelerate people’s journey into better cashflow and better operations and to scale to where they want to go faster.
“You don’t have to have an absurd amount of money to get started in short-term rentals.”
One thing I did not take advantage of was the software tools like property management software and pricing. Those are the two biggest things. Airbnb could be a very active business. It can also be a relatively passive business if you self-manage and automate. You could hire a VA. You could outsource and eventually do a PM. The tipping point for me was finally adopting property management software, and outsourcing all the maintenance, cleaning, and dynamic pricing tools as well. Those tools are lifesavers time-wise and will help you make more money.
It’s important to be aware of those specific things because that’s a make-it-or-break-it. Besides dynamic pricing, what would you say would be a couple of other platforms that were absolute game changers?
AirDNA is very helpful. That’s the one I used. There are some other data tools out there, but I live and die by that tool. For a long time, I didn’t use it because I was like, “I don’t want to spend $50 to $100 per market per month.” I was such in the money-saving mindset instead of the money-making mindset. I do that with my business now too. I’ve rarely been shelling out money on my own education, and I kick myself for not doing that sooner. I’ve spent almost $100,000 in the last few months on consulting and coaching for myself to help grow my other businesses.
I’m seeing massive changes in transformation in my own business. Not to change the subject, but leveraging tools like AirDNA and paying for data in the marketplace is crucial because that can help make a data-driven decision that will be the difference in thousands of dollars per month potentially. Leveraging a tool like that or data in the marketplace is critical.
That’s one thing. Coming from us, my sister’s an Airbnb investor. She has some long-terms as well. I’m purely long-terms. I had one Airbnb, and I thought I did all the research I possibly could. I bought it right before COVID. I then bought it in Minneapolis, thinking, “It’s a cool wedding destination,” all this stuff. George Floyd, that whole thing happened, the riots happened and so Minneapolis became unsafe to the outside world.
The way to make Airbnbs or short-term rentals is in travel destinations. You can make some money in a non-travel destination, but that’s the true ones that are cashflowing the best. I will probably buy another one eventually. I might need to get some coaching from you. What do you think about that? Do you agree with that?
You got to divvy it up into two different markets for me. Short-term rental markets like more urban areas may also be tourist destinations. Nashville’s a perfect example. Another example would be a vacation destination, like beaches, mountains, and lakes that are always going to get foot traffic. There are pros and cons to each. You have better backup strategies in an urban market.
You can always midterm rent if there are hospitals, businesses, work relocation or if it’s a growing city. There’s always a demand for short-term midterm rental housing that’s furnished. In vacation markets, you don’t have that. If people aren’t vacationing, you’re not going to make money. There’s not a demand for long-term and mid-term tenants there. Regulation is changing ever faster in urban markets. It’s not always a bad thing for investors to put a soft cap on the supply and markets.
If you can legally operate within the guidelines and demands rampant, you can crush it like Nashville. There are pros and cons to each. If it’s a destination, and this could be an urban market like Nashville, people are going there for a specific reason, not just pass-through traffic or work. They’re going there to celebrate an event like, “I’m getting married. I’m going to go to my bachelor’s party. I’m willing to spend a lot of money for the most kickass experience because I want that memory. I want my friends to have that memory, and I want to show everyone online on Instagram like, ‘Look at me having an amazing time. Look at this kickass place I’m staying in. Look at this photo. Everyone likes me. This is my moment,’” and people will pay for that.
A lot of people, maybe legacy or vacation rental investors are like, “You don’t need that.” I’m like, “Yes, you do.” That’s how you stand out in a market. Vacation markets, it’s great because you have that all the time. It might be someone’s family vacation once a year vacation. They go to the Smokey Mountains every year, and that’s where they save up all year for that one vacation. They want their family to have the best time and make the best memories. That’s where you can make the extra crazy numbers. You’re right, Ben. If it has somewhat of a destination or a purpose why people are visiting for something special, that’s where you can make big money.
Let me ask you this. Let’s say you are a new investor and you want to jump into the Airbnb market. What would be the top three markets that you would recommend that someone starts to research?
It’s not necessarily top markets. I hate to pigeonhole people into looking at certain markets, but I would say the top three types of markets. Number one would be to start local to you. It doesn’t have to be your own market. Near the biggest Metro areas in the state that you live in, where are the weekend getaways that get the highest amount of tourism? Do your research. What are the tourism numbers? There are things like state parks and national parks. What are the weekend getaways? That’s where you might be able to go and capture some good demand.
The other thing would be cities with solid tourism. Like Scottsdale, Arizona, people go to golf. There are events all year long, or Nashville, the music scene, and bachelorette parties. Twofold, it’s a growing population because if it’s not a growing population, the long-term capital investment or capital appreciation may not be there like a lot of vacation destinations.
“If it’s not a growing population, the long-term capital investment or capital appreciation may not be there.”
If you have that, it’s the best of both worlds in the investment. Like I said before, you have a backup plan. If all things hit the fan or if they ban short-term rentals, which, hopefully, they don’t in your particular market, you have an opportunity where the city’s growing. There are a lot of investments and people moving there. You can rent midterm or long-term. That’s number two.
There are the top three types of markets. The other one would be traditional vacation destinations. You don’t have to look where everyone looks. You don’t have to look at Smokey Mountains, Gatlinburg, Tennessee. You don’t have to look at Panhandle Florida because those prices have gone crazy. I have some clients for our vacation rental management company that have these houses or cabins up on random lakes in Maine or New Hampshire.
Some of them are well-known lakes like Lake Winnipesaukee, but they focused on places that have the amenities. They don’t have to be lakefront but maybe it has a pool. There’s only X amount of properties that have a pool in that market. They’re getting ridiculous bookings like $20,000 bookings for a week or two stays in the peak months. Those are the types of markets that maybe are sleepers where it presents an opportunity to go do something creative.
Not a lot has changed on Lake Winnipesaukee and the Smokey Mountains where almost everyone’s place look like grandma’s cabin or grandma’s house. The competition is not that stiff. It’s getting there, but if you can get in a stagnant market and put your unique twist on it and advertise well, that’s where someone who’s new could open up the door for something special for themselves. Those are the three types of markets. I don’t want to pigeonhole into specific cities.
Our parents, like my dad, approached me and were like, “I’m going to turn our house into an Airbnb in Faribault, Minnesota.” I was like, “It’s in the middle of nowhere. Nobody’s ever going to rent from you.” He grossed $60,000 in 2022. I was like, “What?” He’s found a little niche. The great thing is his niche is because the county says, “You can’t run an Airbnb unless you live there.” Whenever he’s living there, he uses it as an Airbnb, and it works out. He gets tons of bookings. I agree with you. If you can find a smaller market where you can find a niche in there, you can make a ton of money. That’s great.
You did a big fish in a small pond. It’s harder to be like a megalodon shark in an ocean in some cases.
Here’s another question for you. You’ve scaled up your business. What’s the end-all-be-all for you? What’s your end goal? What’s your why?
For me, the why was always time freedom, travel, spend time with my wife, and then grow our family. We have a baby, which is awesome, but because of the social media growth and all these other things, I’m trying to take advantage and I’m becoming an entrepreneur. I never thought I would be an entrepreneur. It’s a weird thing. You get into real estate or a business to achieve time freedom or financial freedom, which we did. All of a sudden, you get caught up in things that you enjoy doing. I’m like, “I love it,” but then I find myself working 8 or 10 hours a day, and I’m like, “I like it but it defeats the purpose of the whole mission in the first place.”
Now, it’s a balancing act. I’m still focused on growing these businesses and trying to stabilize them, and hiring people, which is very time-consuming. The goal is to stabilize it and be in a hyper-growth mode to boost income and acquire more properties. Who knows? Maybe eventually pay off all the properties and live a kick-ass life. That’s all I want to do, travel, live a kick-ass life, and be less stressed.
We’re in the middle where we have the time freedom and income, but there’s still a lot of stress and there are growing pains. I definitely want to uphold that promise that my wife and I made to each other. That was the ultimate goal. The last thing I want to do, the why, is I don’t want to be on my deathbed and have any regret about how I chose to spend my time. The regret minimalization framework is something I try and live by. I don’t want to think, “Will I regret doing this or will I not regret doing this twenty years from now?” It should help me make the decision now that will better suit that end state.
One of my favorite quotes is from a family friend that helped design our family trust and everything like that. He shows up, and we have to sign a bunch of things as a family. This guy’s maybe 60 or 65. We asked, “How old are you?” He says, “I’m 85 years old.” We’re like, “You’re in amazing shape.” He said, “A little debt gets you out of the bed in the morning.” I said, “What do you mean? Expound on that.”
He says, “I’m an entrepreneur. I love what I do. I still work ten hours a day, and that’s why I’m where I’m at. That’s why I look the way I look.” I thought about that. There are so many people who are like, “I want to retire and go to a beach and not have to do anything for the rest of my life.” You’re going to die real quick if that’s the goal.
What you and I are getting at is you need to have some type of purpose or something that gets you up and motivates you every day, especially for your mind to stay focused. You think about people like Warren Buffett, and they’re like, “Why doesn’t he retire?” He’ll probably die if he retires in a year. His diet sucks. I don’t know how that man is still living the way he is. He eats McDonald’s every day and drinks Coke. There’s cancer every day.
The people like him live so long. One of my professors at Elon was teaching until he was 92 years old and then died. It’s because he’s constantly challenging his mind by reading and engaging with people, and there was a purpose for him. There’s that fine line to chasing purpose in life. If that’s business that gives you fulfillment, helping other people, whatever it is, that’s where you’re going to get longevity in life and fulfillment for sure.
Short-Term Rentals: There’s that fine line to chasing purpose in life. If that’s business and helping other people, that’s where you’re going to get longevity in life and fulfillment.
It’s so important to define what your definition of success is, what your definition of fulfillment is, and its significance in every season that changes, and to be able to listen to that and be in alignment because that’s going to get you out of bed in the morning. If you keep going down the same path that you had this vision ten years ago, but your life has completely changed, you’re still running to that thing because if the world says that you should be busy and it makes you a lot of money, the likelihood of you actually feeling fulfilled is going to be slim to none. You have to check in with yourself in each season and be honest.
I made a hard pivot at the age of 30, and many people around me were like, “What the heck are you doing?” I’m like, “This is what I got to do.” I’m so grateful that I made that decision early on because if I wouldn’t, I’d be not anything against back in Minnesota and doing what I was doing in that last career, but it wasn’t where I needed to be. It’s powerful that, Michael, every step of the way, you’re like, “This is the next thing,” but you haven’t lost sight of, “This is why we’re doing this for the family.” There are going to be seasons where you drive and seasons where you shift out a little bit, and that’s your prerogative.
It’s more so chasing a lifestyle and creating habits versus chasing an end state. A lot of people think the first week of January like, “I’m going to lose 10 pounds.” What if you lose 10 pounds? I’ve been down this rabbit hole a ton of times. “Sweet. I got in the best shape of my life for my wedding.” I was like, “I’m there,” and then I gained 15 pounds on my honeymoon. It’s the end state instead of chasing an end state.
I was talking with someone who’s been very successful. He’s like, “I got hundreds of thousands of people following me on YouTube. I’ve reached every milestone I ever dreamed of 5 and 10 years ago.” He’s like, “Now what?” It almost leaves an empty feeling. I would encourage people to chase the lifestyle and the habits that make you happy each day. There’s no end state. It’s a state of being instead of reaching the end goal, whatever that is.
“Chase the lifestyle and the habits that make you happy each day.”
What would you say would be one of the best pieces of advice that you’ve learned from a mentor that has coached you through the years?
It’s thinking bigger and then outsourcing things. I would be so bogged down with operational tasks as my business. My coaching business and social media have blown up. I was trying to keep all my cards close to my chest, manage all the content, manage how I communicate with people, the sales pipeline, and closing with people. I was taking all the calls and doing all the coaching on my own, and it was so overwhelming. I was like, “I’m going to be burned out in a week. I can’t do this.” It’s pivoting.
Why I invested a ton of money into myself and my business was how I build this thing to where it’s sustainable so I can work on the business, not in the business. I heard that many times from people, but I could never comprehend the mindset of, “Nobody can do this better than I can do it.” It’s like, “They probably can.” It’s about picking people who are good at certain aspects of the business, and I’m still getting there. I’m not there yet, but working on the business so I can have more time back and let the business kind of flourish and then help other people succeed as well.
As you have scaled your business, I like that. A lot of entrepreneurs get to this tipping point where they’re making really good money, but they’re a little bit scared about bringing on that 1st or 2nd hire. They’re like, “If I take my eyes off of this, then this income isn’t going to come in,” or all these live rent spaces in their heads. What would you say would be the first step in hiring that person so that you can get out of the rat race, essentially?
Everyone’s different depending on their situation. Something I still have to hire for this position essentially is an operations officer or an executive assistant, more of a life assistant. Someone told me, “This is the best thing you’ll ever do, and that person will move into COO eventually if you find the right person.” For every task you do every single day, write down that task. At the end of the week, you can come by it and check a box. 1 of the 2 boxes is, “Was this an operations task that I could easily teach and delegate? This was a task that only I can do to grow the business.” Ninety percent of those tasks that are chewing up six hours a day are tasks that I know I can delegate.
It’s just I have to build the confidence to do it and to hire somebody, teach them, and then let them. They’re going to do a better job and be more organized than I ever will be on my own. That would be the first hire, which I should have done a long time ago. I hadn’t. For me, in my personal position, it was hiring to help coach clients with me, and then secondly, to take closing calls, which now I have 5 or 6 of them. I take calls from clients, educate them on the program, ask about their situation, and move them into the actual coaching program itself.
How did you find those first couple of hires?
The first one was somebody I coached personally. He’s my first-ever coaching client. It’s not the video course I used to sell, but I coached him for twelve months. He’s the story I always tell people. He and his wife scaled from two long-term rentals to $40,000 a month in net cashflow in twelve months working with me. They were 2 feet in head first in the deep end type of couple. Not everyone’s going to scale like that, but they were all in.
Now they’re cashflowing well over $50,000 a month and have 9 properties that partnered with 3 different people. They’ve done the arbitrage. His wife has a marketing and design background. One of her best friends is an interior designer. They founded Somerled Designs, and I was doing all the marketing, lead business, and lead generation for them.
I came on as an equity partner in the business, and I was like, “I’ll do all the marketing and bring you guys business through my coaching program,” because everything they touch turns to gold. By gold, I mean cashflow. I’m trying to reel this back in, but Logan, eventually was like, “I’d love to coach with you.” I was like, “I never thought about that.” I started up by doing one-on-one three-month sprint coaching plans that I would delegate to him and give him a pretty good chunk of what the person would pay and he would do one-on-one coaching.
Now it’s turned into, “Logan, do you want to be a sales rep and help educate people and see if they’re a good fit for the program and close them on the program?” He has a sales background. He’s like, “Sure.” He started doing that, and now I’m hoping to transition him into managing the sales team, which has grown to 2 or 3 appointment setters and 5 closers and he could manage them so I don’t have to spend all the time doing that myself. I could focus on content and lead gen and do what I do best in the coaching program itself. Long story short, that’s how that developed. That’s also how Somerled Designs came about. It’s pretty cool to see all that come to fruition.
This might be a morbid question. Let’s say the government comes out tomorrow and says, “No more short-term rentals.” I follow a Reddit thread called Real Estate Bubble. It’s all about these people who are saying, “These short-term rentals and these landlords are the scams of the earth,” and all that stuff. Let’s say the government comes out and bans short-term rentals. What would you do?
It might happen at a county or city level, but it will never happen at the federal level. That’s like saying, “We’re banning vacations.” People would storm the Capitol again and be like, “What are you doing?” Seriously, if you’d have to ban vacations, it’s going to have to be market-to-market. A lot of cities are getting smarter about it and saying, “Let’s set parameters.” There’s a fine line between saying you can’t do what you want with the property that you bought in a free country and doing whatever you want like willy-nilly. There’s a line that we need to tread. As an operator, my eyes have been opened a little bit more to this operating in some neighborhoods that were traditionally residential.
“There’s a fine line between saying you can’t do what you want with the property that you bought in a free country and doing whatever you want willy-nilly.”
I don’t want to disturb neighbors. I don’t want to disrupt their life. They’ve been there for twenty years. They love that neighborhood. I don’t want to be the reason that they’re upset. I try and keep it dialed in with my guests. I have their contact info. I say, “Call me if there’s ever an issue, and I’ll fix it right there. If not all, call the police and get them kicked out. I don’t care. I want to make sure you’re happy,” and where we get good reviews too. There is a fine line between completely banning it and then willy-nilly. At the city level, especially in Metro areas, you’re going to see more regulation. I don’t think cities are going to completely ban it. There are too many people operating at this point in time. It will happen to some.
I also think that if a city bans it, the city next door is going to be like, “Why don’t you come to boost our local economy?”
Slicing that money, the tax revenue through permits, vacation rental tax, and hotel tax, whatever else people are charging, they’re realizing, “This is an income generator.”
Any other questions, Ben, before I go into the Lightning Round with the Lady Boss?
No, I don’t think so.
Here we go. Michael, you have to answer these in 30 seconds or less. If you hadn’t started in the Airbnb arena, what would you have gone into?
I don’t know. Thank God I did. I would have done content and tried to pivot to something else that interests me, especially knowing what I know now, but I honestly, don’t know what that would’ve been. I would’ve continued on with sales until I figured out another way to create some type of residual income that would give me the freedom I was seeking.
That burning fire under me is what ignited the journey to real estate Airbnb. If it wasn’t that, it would’ve been something else. I don’t know the exact specific thing it would’ve been, but it would’ve eventually revolved around content too. That happened naturally to me. With sharing real estate, I would’ve shared whatever experience I was learning at the time too.
That’s your zone of genius. I love watching your stuff. People would be surprised that you spend so much time doing what?
I would probably say to spend time goofing around with my wife. I love to be outside and do stuff like that. She’ll probably be like, “What are you talking about? We don’t do that as much anymore.” People are surprised that I’m super goofy and the most normal guy you could ever imagine in the background. People see content and they have this one image of me and that’s it. I’m the most normal person behind scenes and love to goof around.
It’s even fun hearing the backstory on Ben when he married his wife, Angie. Angie went on the first couple of dates with Ben, and he’s so strait-laced and business. On the third date, he got fun and goofy, and that was the tipping point. She’s like, “This is my guy.”
You’re lucky she went on the third date, Ben.
She almost dumped me after the second.
That’s a whole other story for another episode. Chipotle or Chick-fil-A?
Chipotle.
Your favorite way to spend downtime.
My favorite way to spend downtime is I like to golf and be outside golf, fishing, or anything outdoors. I unwind, even a walk with my wife around the neighborhood.
Where are you located? Are you in a spot where you can be outside all the time?
I’m on Lake Keowee in South Carolina with a pretty lake and nice mountains. There’s a golf course here too. This 2023, I never thought I would get into golf. I would go out and play and be so bad I would hate it, but after playing a few times, I got improved a little bit and got some new clubs. It’s more of an unwinding thing. I got to go out there and play for 4 or 6 straight hours with myself and like it.
It’s an athlete thing that it’s like, “I want to be able to improve on something and make myself better.” I get that.
What are you absolutely addicted to?
Coffee.
We can be good friends.
That is bad. The coffee’s a drug, for sure. I’ll get until 11:00, and if I haven’t had one, I get grumpy and my head starts to hurt a little bit. I get irritable. I’m like, “This is bad. I cannot imagine what heroin is like.” If you’re on hard drugs, I mean that wholeheartedly. If coffee feels this addicting, I cannot imagine what people with addiction actually go through every day. When I was younger, I was like, “They’re a bum like a coke addict,” or something. I never thought about it until a couple of days. In 2022, I was like, “I could probably quit coffee but it would kind of be hard almost.” It’s what people feel like smoking cigarettes or doing hard drugs.
My brother says that hands down. He always gives my mom and I a very hard time because we are very addicted to it. I’m so surprised that you can go until 11:00 because I get up at 4:59.
That’s not by choice, Stef. I had a quadruple-shot espresso. I’m still trying to finish it because it was so strong but I did it from 4:00 to 8 AM.
My sister and mom try and get me into coffee, and I’m like, “I don’t want to take up cigarettes. It’s something I have to have every single day.”
You’re missing, Ben.
We’re done here. It’s the simple things in life. What are you reading now?
Honestly, I’m not reading anything now. I just ordered 14 or 15 books.
What’s one of them that you’re the most excited about?
The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
I’m excited to read The House of Morgan. It was recommended to me. I’m about to launch my own podcast. Nate O’Brien, who’s a super YouTuber, a genuine guy, and down-to-earth, reads a book a week. Here’s the advice he gave me, which I love and I’ll share it with you guys and your readers. He’s a very minimalist type lifestyle.
He has a van.
He has a truck that he travels some in, but he grew up in Pennsylvania. He travels a bit, but he has an egg timer, a $1 one you could get from Dollar Tree and he sets it for 30 minutes, phone do not disturb, and locks his door. That’s his time when he reads 30 minutes a day, and he’s a book a week. He told me, “The book of Morgan, I just finished. It was fascinating to see how the Morgan family essentially dominated the entire country and financial system and controlled the government and everything.” I’m interested in diving into that one and trying to understand broader economics and how financial institutions work in this country and even in the world too. I ordered a lot of books around money, debt, company growth, and stuff like that.
Most embarrassing moment.
I don’t think I can share that with you guys. I’m trying to think of a truly embarrassing moment. I embarrass myself all the time, to be honest. I mispronounce words a lot. I don’t know if I have a completely embarrassing moment. I’ll give you one example. When I was a kid, I always ate DiGiorno pizzas. I would eat a whole pizza by myself, and it’s disgusting to think that now. I’m going to cook it faster, and I am an idiot. Heat rises, and I could fit the frozen pizza in the top layer of the oven, cooking it. Thirty minutes later I go in there, and the coils for the oven were inside the pizza because the pizza rises. It’s rising crust pizza. I called my dad. It is smoking, and he’s pissed. I’m like, “I’m sorry,” and we yank it out, and the cheese is dripping from the top of the oven. I wrecked it, but I still ate it.
Good for you. I would do that too. I’m not a cook here. Favorite food on that topic.
I’m a foodie. I love a ton of different types of Italian. I love Italian. My wife too. If we get pasta every night, we’ll be happy.
Describe yourself in one word.
Maybe motivated. It’s not motivated in the sense of what most people would think, “I’m motivated to make all the money.” It’s more motivated to improve, like self-improvement, and also motivated to give back, help people motivated to be a better husband, be a good father, those things. I want to be in a constant state of improvement. I’m far from perfect, and I’ll never be there, but it’s that constant state of being motivated to not achieve a specific state of mind, but that state of being like what we talked about earlier.
If you were a superhero, who would you be and why?
Maybe Batman. I love Batman when I was a kid. I wasn’t super into the comics, but I like the movies and the little TV Batman show. I remember as a kid, I was like, “I could be Batman.” I dressed as Batman for 1 or 2 Halloween.
Be a billionaire and have all the gadgets in the world. Absolutely.
What’s wrong with that? You did well on the Lightning Round with the Lady Boss. Here are the last handful of questions. Who is another guest that you know in your circle or one of your friends that you think could be a great guest for the show and why?
Do you need somebody who I am tight with?
It doesn’t matter.
Someone who I admire a lot is Ryan Pineda. You guys probably are familiar with him. He’d be a good guest. He seems like a genuine guy. I’ve only swapped a couple of messages with him, but I know people that have met him in person and said he’s a terrific person, a family guy, and has an amazing story. Not a failed baseball career, but a professional athlete, made no money, an assistant teacher, and house flipper turned into a mega social media entrepreneur.
He’s going to be one of the biggest real estate and social media entrepreneurs in our generation. I don’t know how he does it. I feel like I don’t have enough time. He’s good at building teams and systems. I’ll probably meet with them or pay to meet with him at some point in time to pick his brain and get to know him a bit. He’d be an amazing guest.
I know one of his partners. They’ve collaborated for a women’s empowerment platform and helped them scale their businesses. Heather Blankenship and I connected. We hosted an event together, and it’s been fun watching them collaborate. Also, Ryan’s wife has been stepping into that role a little bit, which has been fun to see. Good call. I like it, Michael. What is your definition of a boss?
This is interesting for me to answer since I’m technically now a boss for the first time ever. From that standpoint is motivating other people and helping them succeed beyond levels that they ever thought were possible for themselves. That’s only going to benefit you as the boss and/or a business owner. Making sure people are happy and successful, that’s only going to help you long-term and help them stay with you and build whatever you guys are trying to build or accomplish.
“Motivating other people and helping them succeed beyond levels that they ever thought were possible for themselves is only going to benefit you as the boss and/or a business owner.”
It’s such a win-win. Any last words of wisdom?
There are probably a lot of people out there that wake up with some sense of numbness, and that’s normal, so don’t feel like you’re alone. If you’re working a job that you have no passion for or maybe you don’t know too many people in your local town, give it some time. Put yourself out there and remember that you don’t have to stay there.
You can take action and make changes. It doesn’t have to be massive action. You don’t have to be a millionaire tomorrow or start a business tomorrow but think of little things that you can change or try. You got to try things so you don’t feel stuck. You’re not going to be there forever. I felt that feeling a hundred times over driving home from work every day in Dallas, Texas, as we talked about earlier in the show.
I know other people feel that. The last thing branching out from that is you see people on social media and you assume like, “If I could live that life,” a lot of those people are probably miserable and not happy. It’s a very demanding thing to create content, be an entrepreneur, and do all these things. A lot of those people feel burnout too like you feel burnout in your own jobs. Don’t assume that someone else’s life is so perfect and you’re miserable because you saw a 30-second video and you only saw the good things.
“Don’t assume that someone else’s life is so perfect and you’re miserable because you saw a 30-second video and you only saw the good things.”
Michael, preach. Ben tells that to me all the time. I’m always telling myself, “Stef, keep your eyes on your own yoga mat.” You have many great resources. I would love for you to share where they can find your platforms, your handles as far as the coaching, the property management, and all the other resources that you have to help people take it to that next level.
Instagram’s probably the best place, @MElefante6. There are a lot of spam accounts out there. Instagram hasn’t verified me. I don’t know why. I don’t know how to. I think you have to pay for it. I’m such a stickler. I’m like, “Verify me. I’ve been in business and news articles, and I’ve done what you tell me to do. I’m not paying for it.” I’ll probably have to pay for it. Be aware. There are a lot of spam accounts that are similar.
It’s @MElefante6, with no underscores, and no dots. You could DM me there. There’s a link in my bio with all my personal resources and other businesses, including BNBInvestorAcademy.com, which is the main one, but you can always find it through any of my social media channels. That would be the best spot.
Michael, thank you so much for your time. This was phenomenal. It was great to hear your wisdom, not only within the business but also within your life. Thank you for sharing that. Guys, as I say, from day one, it is time for you to fire your fear, build your faith, and become the boss of your own life. Let’s get after it.
Thanks, Michael.
Thanks, guys.
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About Michael Elefante
Michael Elefante is a real estate investor and short term rental expert. He is one of the lead educators in the industry and has over 1 million followers on social media. Michael has coached over 900 people how to successfully find, invest in and manage short term rentals. He is the founder of BNB Investor Academy, and the co-founder of Home Team Vacation Rentals, Somerled Designs and STRhub.