Mastering Scale: Insights from an Expert in Managing 300 Units

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In this podcast episode of the Boostly podcast, hosted by Liam Carolan and Syed from discusses his journey in the short-term rental market. Starting in 2017, Syed aimed to replace his regular income by investing in multifamily properties. He initially succeeded with Airbnb, rapidly scaling up to 300 units. His business flourished, with revenues reaching $3.2 million by 2019. 

However, Syed faced significant challenges, accumulating debt and relying on credit. The COVID-19 pandemic in 2020 severely impacted his business, leaving him with a massive rent payment and minimal funds. To survive, Syed secured loans, refinanced property, and renegotiated with landlords for revenue sharing or lease termination.


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[00:00:00] Syed: I said, you know, maybe in 10, 15 years, I could make enough income not to have to work, you know, instead of retiring in 30 years, maybe I could retire in 10 years. So I put their units on Airbnb. Every single unit that I put on Airbnb, was making three times the rent in the summer. So I was like, okay, this is like, a golden opportunity.

[00:00:19] Uh, I need to leave my job. Hey,


[00:00:21] Liam: welcome to the Boostly podcast. This is the podcast that gives hosts the tools, the tactics, the training, and most importantly the confidence. So you can go out there and get yourself direct bookings. My name's Liam Carolan, and today we're going behind the host and this. He's going to be awesome because we're going to hear this person's story, how they scaled 300 units, their ups, their downs, and all the things that you as a host can learn from.

[00:00:43] We've got Said from sayedbnb. com. Uh, you can go and check out his, his webpage and, uh, see what's on there, but I'm not going to take anything else away from him. I'm going to throw the mic open and

[00:00:55] Syed: say, welcome along. Liam. I'm happy to be here. Looking forward to talking to you. Uh, I'll kick it off by just introducing myself.

[00:01:01] I'm Sayed. And I have 300 units under management. I've been in business for seven years now, and I have 75 resources in my business. There's been a lot of ups and downs in my business, and I'm going to share my story of how I got started and how I got to where I am today. I'm looking forward to it.

[00:01:19] Awesome.

[00:01:20] Liam: I'm looking forward to diving in just before we go into that. Whereabouts in the world are

[00:01:24] Syed: you? I'm located in the Midwest, in the United States, in Chicago. That's where my home base is.

[00:01:30] Liam: Awesome. So from over here in the UK, we love to reach out all over the world. And it's great to have someone from the Midwest in the USA.

How did Syed get started?

[00:01:37] So take it away. Tell me your story. How did you get started? And I'm, I'm excited to share with the audience the, you know, how you got up to that many units, but take us back to the start first.

[00:01:49] Syed: Sure. So I initially got started. Uh, in 2017 I was obsessed with bigger pockets, bigger pockets at the time.

[00:01:59] And I would listen to all the podcasts and bigger pockets and it would talk about getting out of the rat race. And I listened to the ebook for Rich Dad Poor Dad and I was like super motivated and I was like, Hey, I want to replace my nine-to-five income. I want to get out of the rat race. I want to do something, uh, for myself.

[00:02:15] So the way I thought I could make this happen is, you know, purchasing multifamily properties. So. I said, you know, maybe in 10, 15 years, I could make enough income not to have to work, you know, instead of retiring in 30 years, maybe I could retire in 10 years. So after doing a lot of research, I was ready to, you know, take action.

[00:02:34] And I ended up researching that, Hey, I could house hack a property, live in one of the units and rent out the other ones. So I did a loan money down FHA financing. I got a four-unit plus basement. I lived in the basement for a year. And then now it's time to move out. And it was furnished. It was nice. It was nicely done.

[00:02:53] And I listened to another podcast. And this guy was killing it on Airbnb. So I was like, okay, you know, it's ready to go. Why not just, you know, put it on? Let's see what happens. So I put it on in February. It was the first month. You know, I broke. I broke even on my rent. Like, what I was expecting for rent is what I made in my first month.

[00:03:11] But I knew it was February and it's like, you know, winter's slow season. I'm like, okay, let's see what happens in spring break and all that. So coming March, I ended up making two times the rent. And I was like, whoa, this is like something else. Like, this is amazing. And then come April, May. It ended up being three times the rent.

[00:03:26] And then I was like, like, this is something that, uh, like, this is a once-in-a-lifetime thing. I want to have more. How can I get more? So at the same time, it was up for renewal for tenants in my building. And they, some of them moved out. So I put their units on Airbnb and every single unit that I put on Airbnb, was making three times the rent in the summer.

[00:03:48] So I was like, okay, this is like a golden opportunity. I need to leave my job. I need to accelerate what my plan was 10, 15 years to now it's like three, four months, you know, and I need to do this full time now. So, um, I ended up going to my manager at work and I told her like, listen, like I'll give you my like one month notice.

[00:04:07] I'll give you six weeks, like, you know, you could replace my job and I want to try this out full-time.

[00:04:12] Liam: You were pretty persistent. You didn't give up. Whereas so many people would have just gone, you know, I've tried it once. They said, no, I hate rejection. I'm not going to try again. So. But I keep going back and getting in front of that owner.

[00:04:25] And then even when you got in front of that owner, he still said no. But you figured out, well, what was his objection? And how do I solve his objection? And it's, it's what I'd call the foot in the door method, where you've got these two properties. Just to, it's a taster, right? Before he gets the full, full meal, which is amazing.

[00:04:44] So yeah, what, what happened from there? So you got 35

[00:04:47] Syed: units. Yeah. So, uh, I had 35 units. Things were amazing. You know, I was so happy that I, uh, you know, started this business and I'm, you know, making cashflow, I'm making profit. I'm able to grow and scale the business without outside funding because, um, the little trick that I've been doing was like that two months free upfront.

[00:05:05] Um, so, um, I thought like, okay, like this is pretty good. I'm at like 45 units now. Um, like what's next, you know? Um, so, uh, ended up being where, um, some of the deals that I did with this landlord were not. In contract because we were adding some units so fast, like initially we did leases and all that, and all of a sudden we're not doing contracts, um, and we're like, okay, we'll figure out the contract on the back end.

[00:05:30] We're not, we can't do the standard lease anymore. Uh, we need a commercial lease and, uh, we need to have these terms. I'm like, okay, um, that's fine. We can figure that out, but I just wanted units, right? So I'm like, all right, just give me the units. I'll figure it out later. He's just checking keys, keys. You know, I have two months free upfront.

[00:05:46] It's okay, you know, whatever, my money comes back anyway, fast, you know, but it's opportunity. So, um, I ended up getting 35 units with them and then finally, um, like the winter season started coming up and I'm forecasting a bunch of loss and I'm, I don't have a contract and I'm like, wait, what if this landlord ends up saying something like, okay, you know, um, I want these units back now.

[00:06:06] Um, and after the winter, and I just did this all for no reason. So I started getting scared. So I'm like, okay, listen, like a landlord, you have to, um, let's do a contract now. Uh, and that was probably, um, not a good thing to do a contract after you have the units. Um, there was a lot of like negotiation and it put like, um, uh, not a good like relationship between the landlord and I, and he stopped talking to me.

[00:06:29] You know, we did a contract, but he stopped talking to me. So I'm like, okay, you know, I need to, um, branch out, like let's. Find other landlords, just like him, that have thousands of units. And let me name-drop. Now, let me say like, Hey, I do business with this guy who is one of the biggest ones. Can I do business with you?

[00:06:46] He's your friend. He's your colleague. I pay him rent. There are no problems. So I started doing that pitch instead of like six months to finally get approval. And now it's like a month to get approval, you know, from a landlord, because I have a reputation now and I have some, I do business with somebody that they know.

[00:07:02] So. The next landlord, I did the same thing. And, um, I asked for two units and then four units, 30, you know, with this landlord. Um, and then I started going to the next landlord, um, and said the same thing. I do business with landlord A, and I do business with landlord B. Can I do it with you? And the pitch just kept on getting easier and easier, you know, and, um, depending on the time of the year, because, um, busy season for landlords is the summer and then slow seasons of winter.

[00:07:31] So they're motivated at different times. So I would go to them at they're like October when there's going to be like vacant for the next couple of months. And, um, they would start giving me units and, uh, I started scaling on my portfolio. Um, you know, the first 2018, um, is, you know, when I had that 40, 50 units, I had like 1.

[00:07:49] 2 million worth of revenue, a 200, 000 profit. And then in 2020, I scaled up some more. I ended up having 3. 2 million of revenue and maybe like 500, 000 a profit. Um, sorry, 2019, that was 2019. And then 2020, um, that, that winter, um, right before March, um, I said, okay, like winter time, let's scale up units. Uh, at the same time, I'm getting losses and at the same time, I'm adding units.

[00:08:21] I'm going for outside funding. I'm opening up 10, or 15 credit cards. They just kept on approving me for credit cards. I started taking some private loans from my friends and family. Um, so I'm like at 200, 300, 000 of debt from like the, um, from my, my, my loans I took out. And then another 200, 000 loss from the big actual business.

[00:08:43] And I scale up maybe 60 units during the winter. And I'm like, okay, you know, March. 15th, the spring break, uh, I'm back in, um, I have no money right now, but I'm back in business. I'm going to start making money again. And then like, boom, like, uh, COVID comes right. Flight stop. Yeah. Flight stop. Airbnb is refunding.

[00:09:03] Uh, nobody knows what's going on with travel. And uh, now I have a 500, 000 rent payment coming up in a couple of weeks. And I had like 5, 000 to my name. So I was like, like, whoa, like, this is like, I'm done. This is, there's no coming back from this. You know, it's like the bandaid got ripped off so fast. So it was like something that I wasn't even able to react to.

[00:09:26] Right. It just happened. So

What was that moment like?

[00:09:28] Liam: yeah. What was that moment though? Like, because I mean, I know that you know, the funny thing is now I speak to people and some people started their business post-COVID and I'm like, you don't know what it was like, man. You weren't there as in there. Cause COVID is one of those things which just.

[00:09:43] It just completely wiped the floor with, it's grounded us, you know, Airbnb closed their doors, all sorts of, of issues as we frequently, we talk about at Boostly. Um, in that moment where it happened, what, what were the options, you know, what, what was going, how did you feel, I guess, in that moment?

[00:10:02] Syed: Yeah, so. Uh, at the moment, I talked to my colleagues, like I created my own like a little professional group on Facebook, uh, at the time there was like a bunch of guys doing like, uh, these like masterminds that would connect people with like, uh, scaled operators, and it would be buy-in and I'm like, wait, why do I need to pay to, um, talk to people with my business?

[00:10:20] So I created my own Facebook group, um, with some of the players that, you know, Um, are still around today and some aren't, but, um, I started talking to them. I'm like, okay, well, what are the repercussions? What are you thinking? What are you doing with your business? And we started having discussions. We started having meetings.

[00:10:33] Uh, we never met before. Like, uh, we started having phone calls and then some people were very bearish on what was going to happen. They're like, you know, this might be it. You know, if you can get out of your leases, it's time to start talking to your landlords and seeing what you could do. Um, so, and then they would give examples of this land, uh, this operator getting rid of this amount of leases.

[00:10:53] So I was like, okay, you know, I have this 500, 000 rent coming up. Um, so, uh, let me, like, I felt like my business was done just like how everyone else felt. There was no way coming back from it, but I'm like, okay, let me make a list. And in this list, Um, I wrote down 10 things that I needed to happen to, you know, continue my business.

[00:11:14] If I hit these 10 things, maybe I could survive. I'm not sure, maybe, you know, and you know, uh, one thing was I need to get an injection of cash. Where can I get cash from? Uh, at the same time, they started coming out with that EIDL loan. For 150, 000, um, which was huge for me, you know, I took that one 50 and I paid off my private loans to my friends and family.

[00:11:36] I didn't want that on my conscious. Like I took that much money and didn't give it back. Um, then there was PPP. Uh, but unfortunately for PPP, there was, uh, I had all contractors cause all my cleaners were contractors and not W2, um, employees. So I didn't get that much money, but like 30, 000, it helped, you know, I paid down some credit card.

[00:11:54] Um, I refinanced my building. I had a building that I purchased. And I had 120, 000 I could pull out of it. So I took that 120, 000 and paid on debt, uh, credit card debt. So I didn't have this crazy 25 per cent interest, you know? Um, that was, that was from the injection of cash that which I needed. So that happened.

[00:12:12] Uh, next.

How many units at the time?

[00:12:12] Liam: How many units were you on at the time, at this stage where this was all, all

[00:12:16] Syed: tumbling down? Yeah, 180 units at that time. So the next thing is like, okay, uh, I got to talk to landlords. So I had about 10 landlords and 180 units, and I gave them three options. Uh, option one is to get a revenue share.

[00:12:35] Uh, let's do a 50 50 split, 60 40, whatever you guys want to go back to the management type of agreement. Uh, and option two is to allow me to pick up my stuff or, leave and terminate the lease or keep my stuff and I'll just terminate the lease, but I'm not going to be able to pay you. And option three was like, you know if I stay in the unit, I'm not paying, you could sue me, you could bankrupt me and you can do what you want.

[00:13:02] Out of those like, uh, 180 units, uh, three of the landlords that had like 50 of those units ended up saying like, listen, uh, we're not COVID charity, uh, we're going to bankrupt you until you have nothing. You better pay us. Uh, maybe 30, 40, 50 units, um, ended up saying that, uh, just pick up your stuff. We don't want to touch you, you know, just get out of our units.

[00:13:23] And then the most important were two landlords hadn't, I had 90 units with that ended up saying that, okay, let's get on this revenue share. Let's see if we could, uh, survive this, we're partners in this versus like adversaries, as you pay me, I collect, it was like, uh, you know, you were providing value.

[00:13:42] If you're going down, I'll take a little hit. Um, but, uh, let's stay in business and let's figure it out. And if it doesn't work out, you just pick up your stuff. And, uh, eventually those landlords that said that they wanted to sue me until I had nothing ended up realizing how bad COVID was going to be to the world and the economy, they ended up settling with me, like, you know, two months rent or keeping their furniture or whatever the case is like they ended up settling with me.

[00:14:06] So now all of a sudden, um. I ended up removing 90 units from the market for my supply. And then now I have 90 units on revenue share. So now I'm in business still, you know, uh, and

Where do you pull the resilience from?

[00:14:18] Liam: Just jumping on in there. How, how did you feel? So when you're talking to these landlords, the, I mean, there's some tough conversations, right?

[00:14:26] That you're having to have all day, every day at that stage. Like, I guess, where did you pull the resilience from, to do that?

[00:14:34] Syed: Yeah. So. Um, it was just in me, like my thing is like, if something is going bad, I just got to go right in front of that person and tell them like, Hey, I see something bad happening.

[00:14:44] Let's take action. And, you know, it caught some landlords off guard to like when I was starting to walk in people's offices again without meetings without calling without anything and I'm, and I'm like, Listen, this is a big problem, like I want to let you know, these 30 units that I have with you, I'm not going to be able to pay in a couple of weeks.

[00:15:02] What do you want to do? And then. Uh, like the landlord, one landlord commented, like, you know, in all years of doing business is 25 years of doing business. I've never had somebody walk into my office like this and tell me that they're not gonna be able to do something. Um, they're like, this is a problem, but you know, it's good that you came to me, you know, to tell me.

[00:15:21] Liam: Looking at people in the eye and being able to do that must go some way to

[00:15:25] Syed: help. And I think that approach was the best. I started just walking people's offices and telling them like, um, and they appreciated the transparency. They, I provided them with certain types of scenarios and situations.

[00:15:39] If we go through a revenue share, um, how much expense do I need to continue my business to pay my people? Cause I'm like, all I need is be able to pay my people and pay my rent for my house, you know, and let's, I'll give you everything else. Like, I don't, I'm not doing this to like make money. I'm now doing this to survive.

[00:15:53] And. Um, and I told them like, listen, and like if it doesn't work out at any given time, one month, two weeks in, three weeks in you, and if you could rent it out yourself, go rent it out yourself. You know, I was giving them options. Like I'm not, I'm not this person that is just gonna, uh, ignore you and not pay you and then hold onto your unit.

[00:16:10] Cause I think that was the worst, worst thing a landlord can ever experience is that, and they just don't want somebody to do, uh, something, uh, like malice against them, you know? Um, so, you know, that's one thing about me is like, Uh, I'm just able to like, I'm able to just approach people about problems.

[00:16:30] That's just like my personality. You don't, um, I was never scared to do that. And if anything, uh, I feel like they appreciate that when I'm able to like, tell them about the future, then that's, that's why they like kept me along. Cause I would continuously talk to them about the two-month outlook, the three-month outlook, and the next six months' outlook.

[00:16:47] And then I would reflect. I'm like, okay, this, this is actually what I predicted. And this is what happened. I was right about this. I was wrong about that. Let's see what happens in the next two months. You know, so like them, they followed along the story. They believed in the story. And, um, I think that's what they appreciated, but don't get me wrong.

[00:17:04] It was tough. Cause like some landlords were like, like, uh, uh, you know, they didn't want to hear me, you know, they didn't answer the phone call until like, I, um, you know. I started getting lawyers involved and having my lawyer reach out to like, like each landlord had their style, right?

[00:17:20] Liam: Having a blast gonna get it on the Boostly podcast. Bruce Lee. Let Bruce Lee 'cause it's so hard on the tea's Loose leaf, making up those rhymes. Don't write it, just do it loosely.