February 23, 2024

Over $100,000 from medium-term rentals…in just 18 months?! It’s a pipe dream to many, but it’s reality for today’s guest. After connecting with a few colleagues about real estate investing, David Rosenbeck left his established career as a nurse practitioner to dive headfirst into the investing world—carving out a niche that married his former job with his newfound passion: medium-term rentals for traveling nurses.

David and his wife bought their first rental property, and within 24 hours of going live, it had booked nine months out. The rest is history. David has since replaced his six-figure income with this flexible job that allows him to work fewer hours, stress less, and build the dream lifestyle for him and his family.

If you’re afraid that short-term rental properties are difficult to manage or that long-term properties don’t generate enough monthly income, this is the episode for you. David shares all of the secrets that helped him earn over $100,000 in only 18 months from medium-term rentals. He touches on pitching Airbnb arbitrage to landlords, moving every 12 months to build your real estate portfolio faster, and finding the “misfit” properties that make the PERFECT rentals!

Ashley:
This is Real Estate Rookie, episode 273.

David:
Yeah, so I went back and I figured it up before I had my first interview with you guys because I just wanted to know for myself and just from me, doing multiple house hacks in a row and doing an arbitrage, doing some co-hosting this and that, I’ve made over a hundred thousand dollars in the last 18 months off of medium-term rentals, which is absolutely insane.

Ashley:
My name is Ashley Kehr and I’m here with my co-host Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast where every week, twice a week, we give you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And Ashley, man, am I so excited for today’s guest.
We’ve got David Rosenbeck on the podcast, and we met David in person at one of our BiggerPockets meetups not too long ago, and then I bumped into him again at another conference in January, and I’m so glad we brought him on, because I feel like it’s not often, Ashley, that we get a guest where we’re learning so much in the moment from that person as well. But today was one of those episodes where I feel like our gears returning a little bit, right?

Ashley:
Yeah. We definitely used our position as the host to pick David’s brain to our advantage and to what we should or shouldn’t be doing. But one really cool thing about this, and this always gets me excited, is David tells us how much money he made off of his rentals in the past 18 months.
So I think if anything, this should be motivation for you guys that you can completely turn your life around in 18 months like David did.

Tony:
Yeah. He had a pretty healthy six-figure salary, which we’ll get into, and he left that high paying six-figure job because he had so much cash flow coming again from his portfolio, so many good things. But David talks about his journey, obviously, but he gives a quick breakdown on renting by the room and how he’s had success doing that.
And then we spend the majority of the episode really doing a deep dive on medium-term rentals and how he’s been able to just dramatically increase the revenue and profitability of his properties by going the medium-term rental route. And he talks very specifically about what he looks for in a city. Here, you need to search this term to invest in this city. He talks about what he looks for in his properties to make sure they’ll be good candidates for medium-term rentals, and just a really great episode about medium-term rentals today.
Now, one last thing, I just want to give a shout-out to someone who recently love to say five star review on Apple Podcast. This person goes by the username of Matco Justin, and Matco says, “I’m in a position after divorce to buy a home. So why not buy a property that pays me while I live there? As I’m going through the pre-approval process with the lender, I’m learning as much as possible from Ashley, Tony and their guest. And the more I listen, the more I realize I can do this too. Thank you guys both.” Man, what a great review. Not just because it’s a five star review, but just because I love it.
In a position that, maybe a difficult position, someone gone through a divorce, they’re finding support in the podcast, in the community. So for all of you that are listening, if you haven’t yet left us an honest rating review on Apple Podcasts or Spotify, please do. The more reviews we get, the more folks we can reach and the more folks we can reach, the more folks we can help.

Ashley:
David, welcome to the show. Thank you so much for coming on. Can you tell everyone a little bit about yourself and how you got started in real estate?

David:
Hello, Ashley. Hello, Tony. Thanks for having me on. I really appreciate it. Yeah. My name’s David Rosenbeck. I am a nurse practitioner by trade, but turned a real estate junkie within the last couple of years. I am from Fort Wayne, Indiana, but my wife and I, we’ve been traveling around the past eight months or so.
I switched jobs about eight months back to a remote position, and we’ve kind of been doing the nomad lifestyle for a little while, and now we’re back in Fort Wayne, Indiana because our 12 months is up for whenever we can buy a new primary residence. So we’re back in Fort Wayne and we’re house shopping again.

Ashley:
David, can you kind of break that down? What that last sentence is that you meant? What does that mean for anyone who has no idea about why would you move after 12 months?

David:
Yeah, absolutely. So in my humble opinion, it’s the way that we’ve built the majority of our portfolio. Is every 12 months you can buy a new primary residence, and so whenever we purchased our last home, we bought it with the thought that it was going to be a rental property in the near future. And so we purchased it and we knew that it would make sense as a rental in our portfolio down in the future. It wasn’t going to be a forever home for us or anything like that.
So we bought it, we furnished it, in the way that we knew that it would rent out as a medium-term rental, which is my specialty, what we do here in the Midwest. And we furnished it, didn’t put any really of our personal stuff inside there. No, it didn’t hang up pictures, didn’t do any of that stuff. And then within about three months, we took off traveling for the last eight months, and we’ve had a guest staying in there ever since then.
And so the idea is that, every 12 months you can use a nice low down payment, typically 5% for a new primary residence. So it’s a really, really easy way, as long as you have a little bit of flexibility and your wife is okay with it, or husband’s, spouse, whatever, is okay with moving every 12 months, it’s a really, really easy way to build up a portfolio and get the ball rolling with low down payment.

Tony:
One follow up question to that, David. So the type of debt that you’re getting, is it a conventional loan? Is it, what kind of loan is it that you’ve used so far?

David:
Yeah. So we work with a local bank here, and we’re just using 5% down conventional 30-year fixed rate, the best type of loan products that you can get because it’s made for the general consumer.
So whenever you start moving into some of the other stuff like commercial loans, stuff like that, usually interest rates start going up and it doesn’t make as much sense because banks have to protect themselves a little more, but they know that, “Oh, this person’s buying their primary residence.” They give them a little bit more leniency and they let the lower down payment usually with a lower interest rate as well.

Tony:
David, how many times have you done that where you move into a place, live there for a year and then move out?

David:
So this will be our fifth time doing it this go around. And so the very first time we did it, we accidentally flipped a property, and that was back in 2019. And so that kind of brings me back to the beginning of my story of how I got started in investing.
2019, I graduated with my degree as a nurse practitioner and was making more money than I had ever made before making 100, 2000, $30,000 a year as a 25-year-old guy, but didn’t really notice any difference in my bank account, and I didn’t know why there wasn’t any difference in my bank account.
And so then COVID hit not too long after that. And so we had some time, that we purchased a home 5% down back in our hometown area and renovated it, and then COVID hit. And so we were sitting at home and I wasn’t seeing many patients from home, doing virtual visits, and I just got on YouTube and literally searched what should I do with my money in my twenties? And it wasn’t BiggerPockets that popped up first, it was Graham Stephan, but then shortly after watching Graham Stephan, he was talking about real estate. Googled real estate, came upon BiggerPockets and the rest was history after that.
So that first property that we had, we owned it for a year and nine months. And then my wife was like, “We need to move to Fort Wayne.” Which is where we’re living at now, because my commute was an hour and 15 minutes one way, and so she was like, “That’s done. We’re not doing that anymore.”
And so we found a property in Fort Wayne that had a carriage house outback, and my wife was like, “Would this work for that house hacking thing that you were talking about?” And I was like, “Oh my gosh, honey. Yes, this would work perfectly for house hacking.” And so then we sold our house back home. We made right at about $30,000 on that first house and rolled it into our next one.

Tony:
David, so I just want to comment on something because you kind of joked about this already about, if you can get your spouse to go along with this, but you’ve done this five times. Was your spouse always on board from the beginning? Did she say, “Hey, I love this idea, let’s do it”? Or was there kind of a period where you had to maybe convince her to get on board? And if so, what was that dialogue like?
Because I know a lot of our rookie audience, a lot of folks that are listening, they’re married or they’re in a serious relationship and they’re the person that’s listening to the Real Estate Rookie podcast twice a week, and they’re the one that’s on YouTube doing all the stuff, and their spouse is just in the matrix still not realizing what’s really available. So just walk through what it looked like for you and your wife.

David:
Yeah, for sure. So I think she just knows that whenever I really dig into something, I dig into it big time. And so I mentioned I was driving an hour and 15 minutes one way to get to work, and so I hammered through BiggerPockets podcast episodes.
And every time I would come home from work, I’d be talking about nothing but real estate for six to eight months that was going on. And she finally got to the point where she was like, “Okay, this isn’t just some flighty dream that David’s talking about. This is something that could actually work.” And so it was literally just me coming home talking about what I had learned about on that day’s two podcast that I’d listened to one there and one back, and she kind of got an honorary PhD in real estate just from osmosis.
So I think really it comes down to just making sure that your spouse knows that it’s something that you’ve actually put a lot of thought into. And so I listened for, I think it was eight months before we finally took our jump into buying that new primary residence in Fort Wayne. And it had the carriage house outback, like I said, and my wife actually was the one that found it on the MLS, which was phenomenal, and we were able to move into that.
When we sold our house, we were then able to take all the proceeds from that, it was about $30,000 and buy our second investment at the same time, which was a college house. And my wife was like, “Should we take this 30,000 and put it towards our student loans, put it towards this, put it towards that, whatever.” And I was like, “No, we’re buying a college house too.” So we kind of went for three properties all in one because of the carriage house, the main house, and then our college house.

Ashley:
Did you write out any spreadsheets, do any kind of math or run the numbers to decide that, that was the right move or you just wanted an investment property so bad you just didn’t care?

David:
A little bit of both. And so the thing that really, really helped me was the hospital that I was working for. There was a fellow, he was an infectious disease doc that was working there, and I knew that he was investing around the college that this house was by.
And so I reached out to him, I was like, “Hey, can I go buy you dinner and let’s go talk?” And he was telling me about some of the numbers that he was getting for his college house, and I was like, “Okay, if he’s getting that, surely I can get that.” And I told him about the house, showed it to him, and he was like, “Oh yeah, that’s a no-brainer. You should buy it.” So having somebody that I was able to ask, run my numbers by, and then once he said it was a no-brainer, then I was like, “Okay, let’s off to the races.”

Tony:
If I can, I just want to ask, because you said that you’re making a healthy six-figure salary and you’re mid-twenties, which is there’s a lot of people work 30, 40, 50 years and never make over six-figures.
So in a lot of people’s minds financially, you had already made it right early in life. So why even go down this rabbit hole of trying to become a real estate investor? Why not just let your healthy six-figure salary turn into a multimillion dollar stock portfolio that you can retire off of?

David:
Sure. Yeah. I think it was a combination of, I’ve always kind of had an entrepreneurial kind of mindset that I always told my wife. I was like, “I’m going to invent something someday.” I mean, I’m going to come up with some sort of an idea. And then on top of that, the group of people that I was working with in my W-2, I worked at a cancer institute and it was for upper GI cancers. So like pancreatic cancer, which is one of the worst cancers that are out there. Liver cancer, esophageal cancer, a lot of these really, really nasty ones.
And I just saw so many people that were in their mid-fifties or so, something like that, and they’re just about ready to get to retirement. They’re just getting excited about it. They might have just bought their second home down in Florida or something like that. Then they just get hit with this awful diagnosis and then they’re stuck financially. It starts to ruin everything that they’ve built and then potentially could be a life ending disease to where they thought that they had all this extra time and they really didn’t.
And so that really motivated me that I was not going to just put in 40 hours a week for the next 40 years, so that I could hopefully retire at some point. I knew that I wanted to be able to start making my money work for me sooner, so that we could have the life that we wanted to live now.

Ashley:
What would be your advice to somebody who’s thinking of making that transition? Are there any things that you did to safeguard yourself or prepare yourself for making that transition? Having that pay cut, maybe even talk about some of the conversations you had with your wife before you made that big move.

David:
Yeah, absolutely. So the biggest help to me was Fort Wayne actually has a really, really robust investing group and there’s a Facebook group and anybody can join if anybody wants to join the Facebook group. And there was just a lot of really, really good people that I was able to glean onto and learned a ton from.
And one of my early mentors in real estate investing in really medium-term rentals in, specifically because that’s my specialty. His name was Seth, and he was gracious enough to help me out to where he helped me set up my properties in a way that, and set up the minimum stays and bookings and things like that, to where I felt confident that I would be able to have my properties booked because I had never heard anything about medium-term rentals. This was a couple years ago, so Jesse Vasquez hadn’t come onto the scene just yet, so I was kind of flying blind, but then having that support group of people in an investing group, that was phenomenal.
So if you can find people, get to your local real estate, meet up groups and stuff like that, and start talking to people that are doing what you’re doing, and it makes all the difference in the world because then you’re not sitting at home thinking or trying to Google and then you’re wondering, “Is this good information or not?” Then you have somebody that’s tangible, that can pull out their spreadsheet on their phone and show it to you and it just makes all the difference.

Ashley:
Do you think that networking component and going to these meetups is a big part of why you felt comfortable to actually start making offers and buy that first investment property, or even the first house with the carriage house in the back? What are some things that you think made you different than someone who’s still stuck in that analysis paralysis?

David:
Yeah. I definitely think it was having other people around that I was able to ask questions. I mean, that’s really the, because in healthcare, whenever you’re working, especially in the nurse practitioner role, we have a lot of autonomy. We get to prescribe, diagnose, do all kinds of other things, see patients on our own. But there’s always a physician that we can lean on and ask questions to because they are the ones that went through all of the training to really, really get a firm grasp on everything that’s going on. And so that’s how my entire career has been.
As a nurse practitioner, I’ve always had a physician that I can lean on and ask questions to. So whenever I got into the real estate world, I knew that I needed somebody, because that’s the way that I learn and I feel most comfortable is having somebody that I can work through the problems with and ask them questions. So I was able to find a mentor that was able to help me out.

Tony:
We talk about this all the time, Ash, about just the value of community, especially as a rookie. And I asked you, David, how you got your spouse on board. And for me and my wife Sara, she’s my business partner, it was a lot of the same where she kind of saw my enthusiasm, but what really put her over the edge and really gave her the bigger picture of how successful we could potentially be was meeting other people who were already doing it.
And I think it was a meetup that we went to first, maybe a small conference, and then we went to Pecan and she met so many people there, and that’s when her eyes kind of opened and it was like, “Wow. There are really people who have built massive businesses in the world of real estate investing.” And it’s like, “Well, if they did it, why can’t we?” So man, I love that it was the network component that really spurred you all to take action.

David:
Completely agree. And most cities, they’ll have a Facebook group for real estate investors. So if you can get into that Facebook group, search inside there, surely you know a friend of a friend that is inside that group or something like that, or just shoot a message to somebody that’s doing a lot of stuff.
Replying to a lot of people or doing whatever within the Facebook group, because then you can send them a message, be like, “Hey, I’m going to come to this week’s REIA meeting. I was just curious if I could talk to you on the phone for 15 minutes before we go, just so I know what to expect.” Or something like that. And then that helps, you kind of be able to move into the REIA, be like, “Oh, I already know Seth. He’s already part of the group.” And Seth’s going to say, “Oh, hey David, how’s it going?” It’s not you just flying in there blindly.

Tony:
Yeah. David, one thing I want to circle back to as well, because you mentioned this briefly, and I don’t think we spent enough time kind of diving into it, but you said that you were going back to Fort Wayne. Where have you been in the meantime? What does your life look like now that you’ve kind of built up this real estate portfolio?

David:
So once we were able to build up, we’ve got five medium-term rentals right now and then one long-term rental, and that was able to offset a pretty big chunk of my W-2 income that I was making at the Cancer Institute. And I knew, I mean, this was one of the highest paying NP jobs that you could get in Fort Wayne and so I was really lucky to get into the group.
And so I was hesitant to step away from it because I was going to take a pretty hefty pay cut, but I was able, I felt comfortable doing that because I started having this residual passive income coming in from my rentals.
And so now my wife and I, we’ve been traveling around. Our first stop was in Denver where the first week that we were in Denver, we stayed there for a month. And the reason I wanted to go there was because I knew it was the BiggerPockets mecca. And the first week that we were there, there was a meetup at a brewery, where I met the two of you while we were there. And so I was like, “Okay, this is definitely where we’re supposed to be.” And spent a month in Denver, met a ton of really, really cool people out there. There’s meetups two or three a week out there. It’s crazy.
And then we spent a month in Oregon, spent some time in California, Arizona, Texas, Florida, Louisiana, South, North Carolina, Kentucky, and then back in Indiana now, over the last eight months. And it’s been a beautiful thing because we’ve been able to do it, and the reason we’ve been able to do it was because of the income that we were making off of our rental properties, because I was making decent or I’m making decent money at my remote job that I have.
I’m working for an insurance company now, but I’m making probably about two thirds of what I would’ve been making at my prior job. But now that residual income is replacing it, which is fantastic.

Ashley:
Are you working less than two with this new job?

David:
Absolutely. So I always tell people, I had probably a nine out of 10 stress level whenever I was working at the Cancer Institute, just really sick people, seeing lots of them. And now with this job, I work off productivity and I’m usually done by 10, 11 o’clock in the morning. I got my five appeals done, and then I can just relax and focus on real estate the rest of the day and just respond to emails when I need to. And it’s a beautiful thing.

Ashley:
That really is amazing. And I think a lot of people listening probably might be striving for that same lifestyle. If you’ve ever seen Tony at a conference, he pretty much is working while attending the conference or staying up until 4:00 AM to work after the conference, so Tony might even be seeking that lifestyle one day too.
But David, that’s awesome, and congratulations on finding that path and getting to somewhere where you want to be.

David:
Yeah. And that’s the funny thing too. Everybody always says that they want to get into real estate so they can quit their job, but it doesn’t need to be so black and white and so extreme. You can get into real estate and help supplement a third of your income, which is basically what I was doing. And I was able to take a job that had 10 times less stress and I’m still making some decent money, still have benefits and everything that I need to have.
And that’s a similar situation that other people can have, to where they don’t need to be able to quit their job, cold turkey because of all the money that they’re making from real estate, because that just sounds like such a big daunting task. But if you’re able to get into enough real estate that it’s supplementing some of your income, then you can move into an adjacent job that you might enjoy more or it’s more involved with real estate.
Working for a title company, you might not be making as much, but you’re learning more on the job, you’re meeting new people. So it doesn’t need to be, “Okay, I need to make $10,000 a month in passive income before I can quit.” You can make a little bit of that and then you’re able to transition into something else if you want.

Ashley:
David, I want to go into kind of the strategy piece of your real estate investments. So you primarily focus on medium-term rentals. Are you doing any other kind of strategy right now or just that?

David:
I have one college house that’s actually doing really, really well for me. I rented out by the room, and so I was able to find a five bed, two and a half bath house that was right next to a college. And renting it out for 400 bucks per room with $50 flat rate for utilities. And the house cost me $91,000. So my mortgage is 480 bucks and I’m bringing in 2250 a month, and so it’s been a cash cow for me.

Tony:
David, just one question on that. First, I love the rent by the room strategy, and all of our portfolio is short-term rental, but eventually we want to start adding more long-term rentals, but when I do make that transition, I want it to either be maybe more of a medium-term rental or a rent by the room strategy because I like that approach.
But one of the things that always gives me a little bit of hesitation around renting by the room, or I guess two things really. One, is if you’re in a college area, everyone pretty much leaves at the same time during summer. So how do you account for that?
And then second, how do you manage the folks that are sharing that space? Do you supply things like dish washing detergent and or laundry detergent and who’s doing the household essentials? Or do you just let them figure that out?

David:
Yeah. So I actually, going into this, I advertised it as renting by the room, but that was just my justification for the big $2,250 price tag was like, you will be staying in this house with your utilities included for 450 bucks for your room. And my main strategy was that I wanted a team because that was already all those people know each other.
And so I actually started going through and I made a list of all of the coaches for all of the teams at Indiana Tech, which is the college that’s in Fort Wayne. And I emailed all of the coaches that were there, and then I happened to see somebody’s last name that I knew on the volleyball team.
And so I shot her a message on Facebook because we had a mutual friend that kind of quasi-knew her, and I was like, “Hey, are you guys, I just bought this house, here’s the address. Would anybody on the team be interested in renting the place out?” And so then we were able to get five girls from the volleyball team that already knew each other, that all agreed that they were going to rent the house together.
And the second reason that I wanted the team, other than they already all knew each other so, theoretically they should get along because they’re going to be on the same team together no matter what. So the reason that I wanted the team was that, there’s always going to be perpetual overturn with these teams.
And so you’ve got upperclassmen, then there’s junior, sophomores, freshmans that are on this volleyball team. And so you should theoretically always have new people that are going to be coming through and staying at your property. And the reason that we chose girls teams instead of guys was because there’s been, I’ve been to plenty of guys college houses, it doesn’t look great. And so my wife was like, “We need to do girls if we’re going to do college rentals.”

Ashley:
I remember when I was in college, my boyfriend in college, he lived in a house that was five bedrooms I think it was, and they were in the downstairs part of it. And I mean, it was literally you just got the house empty and you had to bring your furniture for the common area, there was nothing provided. I don’t think the house was even cleaned before they moved in.
But we’ve had guests that have been on that talk about doing house hacking or they do rent by the room, but I think the college experience and expectation is very different than if you are renting to professionals or even just people who aren’t in college, where I’ve seen a lot of them supply the dining room table. They supply the couches and the common area of furniture, and then maybe they’ll supply some of the toiletries or things like that.
So have you kind of seen that with colleges as to, it’s very different than if you’re renting by the room to, I don’t want to use the word adults because obviously college students are adults, but not student housing rent by.

David:
Sure, yeah. And so I didn’t provide anything, whatever, it was just like they were basically signing a long-term rental lease, and the way that I did it was I had all of them sign an individual lease, but that was just the way that I pitched it was renting by the room. And one of the most important things, because renting a college house, everybody thinks of the worst, how college house parties and stuff like that going to ruin everything, is I reached out to my attorney and I talked to him.
I was like, “Okay, what can I do to protect myself in this situation?” And so he said, “Have them sign a parent guarantor form.” Is the name, and so what that does is have the girls all physically sign the lease together. So there’s five signatures on that lease, but then I individually send out through DocuSign this just one page document that says, “I blank, blank, agree to uphold all of the terms of the lease individually and holy.” So I now have each one of these five sets of parents that are also responsible for everything within the lease as well as taking care of the property.
And so I don’t have to rely on the kids making rent because the parents are on the hook for it, if they don’t pay. I don’t have to worry about if they destroy something, trying to squeeze money out of a college kid. The parents are on the hook for it. So that has made a huge difference and made me way more comfortable with going into, getting into a college rental space.

Tony:
That’s a really, really good tip, David. And we had a recent guest, Ashley, who also mentioned something about getting the parents to sign for the students. I can’t remember who it was, but it seems like that’s a common thing, and honestly, I would’ve never thought of that. So I appreciate you sharing it, man.

Ashley:
I think that’s great advice for even not somebody who’s in college, but somebody who’s a first time renter. They’re moving out of their parents’ house and they don’t have maybe any credit. They just got their first job. There’s no rental history. That’s something you could ask for as having their parents kind of co-sign.

Tony:
That’s such a good point, because I got my first apartment when I was in college too, and I remember being shocked when they approved me for it. I was like, “You’re actually going to give it to me?” I almost applied thinking they were going to reject me. So I love that idea of even if you’re a first time renter, whether you’re in college or not, it might be beneficial.
Well, David, I want to talk a little bit about the mid-term rental stuff because obviously maybe being a short-term rental guy, Ashley’s kind of expanded her short-term rental portfolio, but the MTR space is starting to get a little bit more love, especially as we’re seeing kind of fluctuations in the economy and what the short-term rental market might look like.
So you’ve got the one long-term rental where you’re renting by the room and then the rest of your units are mid-term rentals. Correct? So I guess if you can, I think the first, I guess first, if you can define what mid-term rental is, because there might be some folks who aren’t familiar with that phrase. And then second, how are you sourcing people to put into your mid-term rentals?

David:
Absolutely. Yeah. So medium-term rental, at least in my definition is anything that’s a 30-day stay that’s furnished where you’re paying the utilities. And so it’s basically that you have an Airbnb, that instead of renting it out for a weekend or three, four nights, whatever you’re renting it out for at least 30-days plus.
And the main reason for that was because Fort Wayne’s not a vacation market. People aren’t coming here for leisure, they’re coming here for work. And me being in healthcare, whenever I went and I walked through the hospital once we were allowed to come back after, I think it was six weeks, they had us NP stay at home and try and do video visits.
And then once I got back in the hospital, I didn’t recognize anybody in the hospital. I didn’t recognize any of the nurses. And I was like, “What is going on?” And so I started talking to people and everybody was a travel nurse, and I was like, “Where are you guys staying?” And they’re like, “Oh, I’m staying at the super eight down the way.” And I’m like, “How much are you paying for that?” “Oh, 60 bucks a night.” And I’m like, “Are you kidding me? That sounds horrible.” And so it got my wheels turning.
I was like, “Surely there has to be a market for this.” And then that’s how I got synced up with my mentor, Seth. I just asked in the Facebook group that I was part of, I was like, “Is anybody doing 30-day stays furnished for travel nurses?” And then Seth reached out to me, and then that’s how we got started.
We started renting out the carriage house. And so we furnished it and it’s 600 square feet. It’s a little brick A-frame, it looks kind of cool, and my wife did a wonderful job of making sure that it looked really, really good. And within the first 24 hours of us going live on Airbnb, we had a nine-month booking. And the nine-month booking was not even for a nurse, which is what I expected our bread and butter to be.
It was somebody that was coming to town with his wife and he was a lineman, like power lines. He was working on them for Indiana Michigan Power, the power company. And so not even somebody that was on my radar. They booked it for nine months. And so that just really opened my eyes that, “Hey, there’s a huge industry for this. Not just travel nurses.”
And so then we expanded, we’ve got now our main house that was with the carriage house, we moved out of that, and that’s now a medium-term rental. That’s a two-bed, one bath. And then we have a town home that’s a three bed, two and a half bath, that’s a medium-term. We did an arbitrage of a one bed, one bath that’s near the hospital that I worked at, that is a medium-term. And then I’m co-hosting for a friend of mine, that’s a medium-term.

Ashley:
Can you explain what arbitrage is?

David:
Absolutely, yeah. So there was one apartment complex that was really, really close to the hospital that I used to work at on the north side of town that it’s kind of far away from downtown. It’s kind of all by itself. And so there’s one apartment building there, and I was like, “Surely, if I would be able to.” Because I was looking, there’s no apartment building or apartment units on Furnished Finder or on Airbnb.
And so whenever I was looking around and I just gave them a call, I was like, “Hey, my name’s David. I do medium-term rentals for travel nurses. I work at the hospital, there’s not enough housing. Would you guys be willing to do a corporate lease with me so that I can rent out to some travel nurses?” And the fact that it was going to be for 30-days only, I told them, I will never do anything less than 30-days.
It’s going to be for healthcare providers at Parkview, which is the hospital. They knew how close they were to the hospital, so they were like, “Okay, that makes sense.” They were perfectly fine with, they were like, “Yeah, absolutely. Come on in, we’ll have a conversation about it.” There wasn’t even any of this, “Oh, trying to woo the landlord.” Or, “Woo the apartment building into letting me do it.” They were happy to do it because they felt like they were contributing them.
And so basically you go in there, you sign a lease saying, “I will pay X amount.” Which is whatever the market rent is. And then we furnish the building, put all the utilities in our name, and then we’re rerenting it to travel nurses, and then we make the spread.

Ashley:
Did they require, did they do a whole tenant screening on you, do the credit and background check on you?

David:
No.

Ashley:
As the renter? No?

David:
They didn’t do anything.

Ashley:
Wow.

David:
I made sure that I walked in with my scrubs on, with my badge on, so maybe that helps.

Ashley:
I liked how you used the word, when you kind of approach them, you want to do it as a corporate rental, because that has been, that’s actually been done for a really long time, is corporate rentals where this medium-term stay is kind of new where more people may not know what it is. So I really like the way that you kind of worded that and pitched that and that’s really awesome.

David:
Yeah, I made sure that I never once mentioned the word Airbnb. I was like, because then they’re going to freak out, but it was, yeah, I think it was that I’m going to be having nurses that are coming into town that are working at the hospital. And so it’s pretty hard to try and turn somebody down with that whenever they’re coming to the community to help out with the sick people that we have.

Tony:
David, one follow up question. So you said the first one came on Airbnb, a few hours taking the live you’ve got a nine-month booking. Are the majority of your medium-term rental guest coming from Airbnb or is it coming by you directly reaching out to the hospitals and offering that? Or what’s your biggest source for folks coming in?

David:
Yeah. I would say early on, I would say it was probably 75% Airbnb, 25% Furnished Finder. And so Furnished Finder for people that don’t know is an online booking platform and it’s tailored for travel nurses, but now other people, other traveling professionals are starting to figure out that, “Oh, it’s not just for nurses.” And so all you do is pay a $99 fee for the year for that booking. And so they don’t take 3% Airbnb or anything like that. It’s literally just a place for you to post your property that somebody can find you and contact you.
But I think over the last probably six months, it’s kind of flipped on me, and now I think it’s about 50/50. Because I think before, whenever I first started, travel nurses were making so much dang money that they didn’t care, they just booked through Airbnb and they didn’t mind the extra fees. They didn’t want to do so much searching, they just wanted to get to town and get to work.
But now, the travel nurses, their pay has been cut down quite a bit because there’s not so much of the critical need that there was during the pandemic. So they’re looking more on Furnished Finder and stuff like that. They used to try and get a little bit of a lower rate. But I’d say probably about 50/50 right now, Airbnb and Furnished Finder.

Ashley:
For our medium-term rental, we actually got somebody that booked it over the summer, their grandparents that want to come and visit their grandchildren for the summer. So we have the whole summer booked out because of that, and find it interesting too, that you’ve had construction workers.
We recently just had two different engineers contact us that are coming in for a six-month job that they’re doing in the area. So yeah, there’s definitely more potential than just traveling nurses too. So I think that’s just an added bonus that, being by a hospital is great, but you could also try and market to other types of people too.

David:
Absolutely, yeah. And I would say the lead driver of the economy in Fort Wayne is healthcare. And so that just made sense in my brain. I work in healthcare, that’s the lead of economy, but I would say maybe just by a hair, 50% of my bookings have been nurses. The rest have been other people.
So I’ve had people that were in town for a physical therapy internship. I had somebody that was a concrete guy that was working on the courthouse for three months. I had a guy that was a crane worker, had another person that was in town for a law internship. I mean, there’s just a million different reasons that people need to come into town and stay for two or three months at a time. And they’re obviously not going to lease an apartment and they don’t want to stay inside a hotel for that long because even these extended stay hotels at $60 a night, they’re still paying multiple thousands or well over a thousand dollars for a month to stay there.
And my sweet spot that I’ve found has been right around that $2,000 a month mark, which works really well in the Midwest, which is where I work at with our low purchase prices.

Ashley:
So David, you have told us a lot about your portfolio. You have cut back on your position, you’re living the life that you want right now. We all have to ask, how much have you made in the past 18 months since you started doing this off of your rentals?

David:
Yeah, so I went back and I figured it up before I had my first interview with you guys because I just wanted to know for myself and just from me, doing multiple house hacks in a row and doing an arbitrage, doing some co-hosting this and that, I’ve made over a hundred thousand dollars in the last 18 months off of medium-term rentals, which is absolutely insane.

Ashley:
That’s amazing.

Tony:
Yeah.

Ashley:
Congratulations.

David:
Thank you.

Ashley:
And I do think a big component of that is being able to, you did change your job and having more time to focus on your rentals and real estate too.

David:
Yeah, absolutely. I completely agree because now with this job, I mean, I’m able to take multiple phone calls a day. I’m able to underwrite properties, I’m able to just have one laptop open that’s for work and one laptop open that is for the fund work, which is real estate and answer emails whenever I need to, but then I’m perusing Zillow and looking for other things. And so yeah, it’s made a huge difference because now I have so much more time flexibility that I didn’t have before whenever I was working at my previous job.

Tony:
Yeah. Well, congratulations brother. That’s an amazing achievement. So you’ve shared so much information. I really enjoyed this conversation David. I would love if you can talk a little bit about your process for selecting these homes that you’re using as medium-term rentals. Do you have a process in place or what kind of thing do you looking for to say, “Yes, this property makes sense as a medium-term rental”?

David:
Absolutely, yeah. The reason that I think medium-term rentals is one of the best investments out there is because a lot of people aren’t looking for the type of properties that I personally think do the best. And so I like to call them my misfit properties.
And so whenever you’re looking around for these homes, you find these little one bed, one bath, two bed, one bath, less than a thousand square feet places that no investor wants to buy because how much are you going to rent a one bed, one bath for maybe 600 bucks a month and it’s not going to cash flow very well. And then no family’s going to want to buy that because they’re going to grow out of it in no time.
And so if you can find these properties, it’s usually a very, very low down payment because it’s a cheaper property, you can usually negotiate pretty well on the price and then the renovation on these types of houses because they’re less than a thousand square feet typically renovation is very, very cheap. And then your utilities, once you have everything renovated is very low because your heating bill, electric bill, everything else is usually very, very low.
And a one bed, one bath house or a two bed, one bath house is fantastic for a travel nurse that’s coming into town because they don’t need that much space. They’re usually at work the majority of the time and they just want to come back and crash and then watch a little bit of Netflix, go to sleep, and then go back to work the next day. And so I think that these houses are the perfect thing that people can start looking for.
And the way that I like to tackle a new market, because I’m looking to branch out of my home city of Fort Wayne because things are getting a little bit saturated here because I keep preaching medium-term rentals from the mountaintops, and so now everybody’s getting into it, but I’m reaching out into some of the more tertiary Midwest markets.
And my favorite way to do it and the way that if somebody wants to do this for free right now at home, super easy. You pull up Furnished Finder on one side of your screen, you pull up Zillow on the other side of your screen, you find a misfit property somewhere in whatever city that’s closest to you. And I always like to look for at least a level one trauma center hospital. So 450 beds, typically level one trauma center hospital, because then you know it’s big enough that there are going to be travel nurses there no matter what, because there’s such a nursing shortage still.
And so if you can pull up Zillow on one side, pull up Furnished Finder on the other, you look at where the pocket of Furnished Finder properties are because that must be, “Okay, this is a safe enough area.” Then you pull up Zillow and look and see, “Are there any overlying areas? Is there a nice little misfit property hanging out inside that spot to where I can go and underwrite it?” Like, “Oh, this property’s getting 2200 bucks a month and it’s got grandma furniture inside it. I wonder if I could purchase this little house and I can make it nice and get even more than that.” And so it’s just a really simple way that people for free at home could pull up their internet browser and be able to look for properties right away.

Tony:
David, one thing you mentioned, level four trauma center and you said 400 beds. How does someone who’s not in the healthcare industry identify that?

David:
Yeah. So level one trauma center.

Tony:
Oh, level one.

David:
That’s the highest level that you can get. So a level one trauma center is somebody that’s critically ill in an accident or something. They would fly them by helicopter to a level one trauma center.
And so you can literally just Google level one trauma centers in Cleveland, Ohio. Level one trauma centers in Louisville, Kentucky, and then, or if it’s not a level one trauma center, which is kind of ideal because then there’s lots of people there. They have ICUs and all this other stuff. You can just Google whatever hospital is in, whatever town that’s closest to you.
I’d say you’d want at least a hundred thousand people. A hundred thousand people in the town population-wise, because then it’ll probably have a big hospital. And if you get a hospital that’s at least 450 beds, you’re going to have so many nurses that are within that network that they probably aren’t meeting the supply for the nurses that they need. And so then they’ll likely have travel nurses that are coming in.

Tony:
I just googled level one trauma centers for my county, and there’s three that are within, I don’t know, probably 25 minutes of where I live right now. That’s so crazy. I never knew that, man. That’s awesome.

David:
Yeah, it’s a nice way that you can just suss out smaller hospitals from bigger hospitals because there’s not going to be a 50 bed hospital that’s a level one trauma center. It has to be a large one. So whatever town that’s within, I mean, just about everybody listening to this right now has a level one trauma center within two hours of them.
And so whatever town that that’s in, then you can start looking on Furnished Finder, set your parameters on Zillow for two bedrooms or less thousand or 1200 square feet, thousand square feet or less. Find those cheap misfit properties, turn them around, furnish them, put them up and see what you can get for it.

Tony:
David, that’s an awesome breakdown man, of kind of how to get rock and roll in the medium-term rental space. And I might have to steal that whole level one trauma thing because I’ve always, I don’t have any long-term rentals. I never had any long-term rentals in California, but we have short-term rentals here.
So maybe a medium-term rental could do well in California also, because I like the idea of having assets in California because they appreciate well, and you’re going to get the long-term upside, but obviously as a traditional long-term rental, it gets a little tough to find properties and make sense, but this level one trauma center might be my goal, man.
Cool. So I want to take us to our next segment, which is our Rookie Request line. So for all of our rookies out there listening, you guys can give us a call at 888-5-ROOKIE, and if we like your question, we might just use it on the show. So David, are you ready for today’s question?

David:
Yeah. Let’s do it.

Tony:
All right. So today’s question comes from McKinley Ward and McKinley says, “I have a few questions around medium-term rentals to traveling healthcare professionals. I’m about to close my first single family property this week. This house has a fully furnished, I’m assuming. One bed, one bath basement, equipped with full kitchen and laundry as well as separate access entrance. We plan to house hack, live in the main level and originally rent out the basement as a traditional long-term rental.”
“However, I recently came across the idea of renting to traveling healthcare providers and found Furnished Finder. I’m thinking of the cash flow much more each month doing it that route and have a higher quality tenant. My question is, does analyzing the numbers change much with this approach compared to a traditional rental as in look at it more as an Airbnb. Also, has anyone had much success doing this or using Furnished Finders. Anything to keep in mind?” So what is your advice David, to McKinley?

David:
100% would say go with the medium-term rental route, because likely if it’s a basement unit, you’re probably not having separate metered much of anything. Maybe you have separate gas, maybe you have separate electric, but if it’s a basement unit, probably not. So you’re already going to have to figure out a way to split those utilities or you’re paying them yourself already. And so that’s one of the things with medium-term rentals is you’re paying your own or you’re paying the utilities for that unit.
And one thing that she mentioned as well was you get a higher quality tenant, which theoretically that’s the idea. You get a traveling professional that’s going to come stay at your place. It’s not somebody that’s renting out a basement unit for 500 bucks a month because they can’t afford anything else. Then you might start getting some lower quality people that are going to be staying there.
But if you can rent it out, typically what I see is about twice whatever you can get for a long-term rent, I would say at least two times, that is what you can probably get as a medium-term rental, usually even a little bit more than that. And so if you’re doubling what you’re getting, you have to shave out a little bit for the utilities that you’re going to be paying, but then you’re going to be making much more in regards to profit off of that property. And in my opinion, I like it more with our carriage house that we have behind our house. We had people that were living close proximity to us.
If we signed a lease with somebody for a year, they’re there for a year and we have to put up with them. But with these people, that’s typically three months, four months, something like that at a time. And typically then they head out after that. And so you usually have a shorter amount of time that you have to deal with them, but usually you don’t hear anything from them because they’re off, working. That’s why they’re in whatever town you’re in. It’s because they want to work hard, make a bunch of money and then go back home. And so I think it’s a brilliant idea, I think it would work out beautifully.

Tony:
I just had another epiphany while you were talking, David. So my sister-in-law, she’s a nurse, she’s a freaking nurse, and I just googled her hospital and it’s a level one trauma center and I didn’t even know that.
So I got to go call her after this and say, “Hey, where are all of your coworkers living? How many of them are traveling nurses?” So I think I got my end at the local hospital.

David:
Yeah. Just pull up Furnished Finder and look around the hospital and see what the Furnished Finder units look like. And then if you’re seeing, “Okay, there’s a quadplex.” And one of the units in the quadplex is renting for X amount, then you can just kind of extrapolate that out and you can kind of see what the market is bearing because that’s whatever price that they have on there.
Furnished Finder and Airbnb make it really, really easy to see what people are willing to pay for what quality you have. And then if a guy like you, I’ve seen your short-term rentals, they’re phenomenal. I know that you guys are going to do an amazing job furnishing it. And a lot of people on Furnished Finder, it’s like Airbnb six years ago, everything is hand-me-down, Goodwill looks horrible.
And so if you can go in there and do a bang up job with your decorations, actually, because I would bet 90% of the people on Furnished Finder do not do professional photos and it blows my mind. And so do professional photos, make it look really nice because these travel nurses, they’re usually young, single females, 90% of travel nurses are females and I forget what the number was, 80% of them are single or something like that.
And so you get a young single female that’s making like $125 an hour, she wants to stay somewhere that’s really nice. She doesn’t want to stay at grandma’s place, but within reason, they want to be able to stack up some cash but live somewhere nicely for the three months that they’re in town.

Tony:
I got one last question for you, David. So when you’re analyzing how much you can charge for your medium-term rental. Obviously, there’s tools on the short-term rental side. I’m not sure how accurate those numbers are on the medium-term rental side, but I know one process is you can just open Airbnb and you just open Furnished Finder. You can see what those properties are being listed at. But the only downside with looking at that is that there’s there’s no guarantee that, that’s what they’re actually booking for.
So someone could list a property at 2,400 bucks a month, but then when they actually book and get paid, maybe it’s some other number. So do you have a process for, on the medium-term rental side, projecting what that income might be?

David:
Really, the ENEMY method, which is what you mentioned, just going around and looking what other people are getting is the best way that there is right now, like PriceLabs, AirDNA, stuff like that. They’re not up on the new up and coming asset of medium-term rentals.
I was actually just on a Instagram live last week where it was Jesse Vasquez and the CEO of PriceLabs and they said that they’re currently working on tools that will help underwrite medium-term rental properties. So that’s something that’s on the horizon that I was excited about.
But something just a quick little nugget that I learned from that, ways that you can utilize PriceLabs for medium-term rentals. The worst thing that you could have happen is that you have somebody that’s moving out and then somebody books for four months, but they booked it five weeks from the time that your current tenant is moving out. So you’ve got five weeks that are dead in the water right there because no one’s going to want to book it only for a month. They’re not typically.
And so he said that a new rule set that they’ve set up in PriceLabs is that you can determine how long of a length of stay it needs to be for you to allow it, for how close it is to whenever somebody moves out. And so let’s say that you’re okay with a three-week gap after your current guest leaves, if that person books for six months, but it needs to be them booking for three months, if it’s a two-week gap or they need to book for one month if it’s a one-week gap. And so there’s all these new rule sets that PriceLabs is coming out with to be able to help you with that.
So it’s nice to see that these big companies are coming out with tools to try and help with the underwriting process for medium-term rentals because it is still kind of shot in the dark and you’re just hoping that you can get a good average on things whenever you’re looking like Furnished Finder and Airbnb.

Ashley:
You can always go back to the old-fashioned way too of just tracking listing. So every week just writing what listings are available and then usually if they’re not there the next week, they most likely rented for what they were listed for.
They’re sitting wild. There could be the risk that they were renegotiated, but if you’re thinking of doing medium-term rentals, even short-term rentals or long-term rentals, that’s just kind of the pen and paper way of tracking what rental prices are in your area.

Tony:
Absolutely.

Ashley:
So David, we have three more questions for you. So this is our rookie exam. Are you ready for it?

David:
Let’s do it.

Ashley:
Okay. The first question is, what is one actionable thing rookies should do after listening to this episode?

David:
As I mentioned before, one thing that every single person should do because it’s free and it’ll take you five minutes to do, is find whatever the biggest hospital is within two hours of you in whatever town that is, and look at Furnished Finder and you can do furnishedfinder.com/stats and you can type that city in and it’ll actually tell you what the demand is.
How many requests there’s been, how many views there have been for that city. And that kind of helps give you an idea of how many people may be looking to get into that area as well. But then look at what your competition is doing, look and see how much people are getting for a one bedroom, a two bedroom, if it’s an apartment or if it’s a house. And then pull up Zillow right next to it and see if you can find any properties that would kind of meet those same parameters that those properties are for on Furnished Finder and see what the, and then underwrite it using one of BiggerPockets calculators.
It’s super simple. You just go in there, use whatever your utilities are. If you have a similar type of property that you’re living in, if you’re living in a one bedroom apartment, you kind of have an idea of how much you’re going to be paying for it, and then use that against whatever you’re getting on Furnished Finder and you can come up with what you’re going to be making. And I think it’ll shock a ton of people how close by people can get a property that’s cash flowing hundreds and hundreds of dollars a month and it takes little to no management whatsoever.
That was one thing that I didn’t get a chance to touch on, but these things are so, so simple to manage, it’s unbelievable. Across my portfolio, I usually tell people I spend about three hours a month on my portfolio and I bet that’s being generous because I just don’t have turnovers. People are there for four or five, six months at a time. It’s beautiful.

Tony:
All right. Question number two, what’s one tool, software app or system that you use in your business?

David:
Always use Airbnb. Always use Furnished Finder. I haven’t ever gotten onto VRBO because I’ve just never heard of any other medium-term rental person being on VRBO. But typically those are my two go-tos for trying to bring people in as well as trying to underwrite properties.
And always use the BiggerPockets calculators because they’re phenomenal. And then when I’m starting to now look to bring on investors, and so whenever you send over that BiggerPockets underwriting where it’s got the nice pie graph on there and everything else that makes you look really, really professional. So that’s one tool that’s been invaluable for me.

Ashley:
Where do you see yourself in five years? What is kind of your goal, your plan? It seems like you have a pretty good hold on your journey right now and happy with it. What’s the plans for the future though?

David:
So I have always been a dreamer with doing super cool, super unique short-term rentals. That’s something that I’ve been looking to get into, but I knew that medium-term rentals would be a really, really good baseline for me. That’s kind of the foundation that I’m building my financial empire on is medium-term rentals because it’s something that’s more stable than short-term rentals, but it makes more money than long-term rentals. It’s easy to manage like a long-term rental, but it’s doing better than what the traditional long-term is.
And so next step for me, I think I joined Rob’s host camp, Rob Abasolo host camp, and I want to start getting into some of these more unique short-term rentals. And so been working with some of my old physician colleagues that I had worked with and they keep asking me, “Hey, what are you doing?” “How are you doing this?” “What’s going on?” “We have money that we want to invest.” And so I’d like to be able to bring on some of that private capital and be able to deploy it into some of these kind of unique properties and these cool short-term rentals.
But then on the other hand, then keep building my personal portfolio of these super easy to manage medium-terms because I’m almost hesitant to get into the short-term rental game because I just know how easy it is to manage the medium-term rentals. And then I know how stressful and how strenuous it can be at times with short-term rentals, as I’m sure Tony can attest to.
And so I am almost hesitant to do it and that’s why I think it’s going to have to be these very unique tree house properties and things like that, things that are not your standard run-of-the-mill short-term rental because it needs to be something that makes it worth my time versus just pursuing more medium-term rentals.

Ashley:
David, I am so sorry, but I lied to you. I have one more question, a fourth question. As soon as you mentioned stats, I was googling away at the Furnished Finder Stats. So when I did Buffalo, New York, it said for the map searches and housing requests for the Buffalo area in the last 12 months was 26,130. Is that a good number?

David:
That’s a great number. So I mean, there’s 26,000 people that were searching in your area trying to find somewhere that they could stay. And so if there’s 2000 people a month that are looking for somewhere to stay in Buffalo, New York, then I’m sure that you could have somebody that would be staying in your property.
And that’s also another thing with medium-terms where there’s a lot more room for more properties. Whenever it comes to short-term rentals you’ve got people staying for 2, 3, 4 nights or something like that. And so it takes a lot of people to get that occupancy rate up to 90% or something like that.
But with a medium-term rental, whenever one person stays there for six months, it knocks that property out of the pool for half of the year. And so there’s a lot more room for a lot more medium-term rentals to be in the market because there’s more people that are staying in them for longer.

Ashley:
Well David, thank you so much for coming on with us. Tony, and I have our brains going a mile on this, and we appreciate all the valuable information that you’ve given.
Can you tell everyone where they can reach out to you and find out some more information?

David:
Absolutely. Yeah, I’m on BiggerPockets, David Rosenbeck. Rosenbeck is R-O-S-E-N-B-E-C-K, And then I’m on Instagram, @davidrosenbeck as well. No spaces, no dots, no anything. And I’ve started doing some coaching and consulting for people. So that link is in my Instagram.
So if anybody wants to learn how to do medium-term rentals, find those misfit properties in the Midwest, reach out to me, I’d be happy to help you out.

Ashley:
Awesome. Thank you so much.
I’m Ashley, @wealthfromrentals and he’s Tony, @tonyjrobinson on Instagram. Make sure you guys are part of the Real Estate Rookie Facebook group and that you are subscribed to the Real Estate Rookie YouTube channel. And we’ll see you guys on Saturday for a Rookie Reply.

 

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