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[00:00:00] Sarah: Hello, listeners. Welcome back for another great week. My name is Sarah Karakaian.

[00:00:04] Annette: I am Annette Grant. And together we’re–

[00:00:06] Both Annette & Sarah: Thanks for Visiting.

[00:00:07] Sarah: Let’s kick off this episode like we do each and every week, and that is sharing one of you our fantastic, loyal listeners who’s using our hashtag, #STRShareSunday. If you’re new around here, use our hashtag on Instagram. We will find you. We will share you here on the podcast, on our Instagram channel on Sunday, and we’ll also blast you out to our entire email list. It’s great exposure and a great time to celebrate you as a host. Annette, who’ll be sharing this week.

[00:00:28] Annette: This week we are sharing @hyggesonoma. Finally know how to say it. @hyggesonoma. I’ve only been doing this podcast for four years, and I finally understand how to say it. All right, that’s @H-Y-G-G-Esonoma, and, wow.

[00:00:47] Sarah: What’s the first thing you said when you gone to their Instagram account?

[00:00:49] Annette: I want to go there.

[00:00:50] Sarah: You said, take me here, and you yelled.

[00:00:52] Annette: I said, take me here. Hygge Sonoma, need I say more? But let’s chat about it a little bit. One thing that I love on their Instagram specifically because they do have views, is they have a highlight section of just the views. And I think that is a very, very, very smart thing to do. And then they have a best of section, and I know most cities do a best of, so best breakfast, best lunch, best dinner, best date night, best coffee, best cocktail.

[00:01:27] Why not do that best of? That’s a genius way to help your guests maneuver your town. And really, if your local folks are voting at the best, I hope that people traveling in would also voted the best. So I thought that was a really clever way. If there’s a blogger, if there’s a publication, see what they’re best of.

[00:01:47] And a lot of times those are voted on by your community, and there’s a fresh one every year. So take a look at that best of. I thought that was brilliant of them. And talking about their listing a little bit, I really thought something brilliant that they did, number one, their copy is lovely because I really do want to escape to Sonoma. And I always talk about pointing out some of the negatives.

[00:02:13] They did that, and it made me want to go there more because it says the property is located directly beside a working biodynamic vineyard. So expect to see and hear tractors and golf carts working on the vines. I thought that was so cool because if you’re going to Sonoma and you can actually see the farmers working on the vines, take a look at like live action farming taking place on the grapes.

[00:02:41] I just thought that was super cool. But I’m sure that they’ve had their fair share of maybe– I know farmers get up early. I’m sure people working on the vines get up early. But I love the way that they pointed that out and you are aware of it. And I know they have another property.

[00:03:00] So they have a sister property. Check that out. Vista Luna Sonoma. And I just want to say thanks for using the hashtag. It really is a beautiful place. And when you’re looking at their Instagram and their Airbnb listing, take note, this is a secondary property on their main property. And so I just love that they’ve made a revenue stream on their own property already. They didn’t have to go outside of it, it looks like. I’m sure it wasn’t a simple build, but it is simple in the way that they present it, and I just think well done. And yes, take me there.

[00:03:39] Sarah: The landscape for me is so picturesque, all those color. Oh, it’s beautiful. So well done. All right. On today’s episode, I’ve got a special place in my heart for today’s topic. We’ve all heard of what’s happening in big cities with regulations, most notably New York City, because recently, in September of 2023, essentially, New York City banned short-term rentals.

[00:04:03] Now, there are some exceptions, which is why we had today’s guests on the show. So get ready to learn a little bit about New York City regulations and just what can happen to you and your family when you are ahead of the curve and you are paying attention to regulations and seeing ways that you can still do what you set out to do, do what you love, do what your intentions are, but still being a great community members and foreseeing the future.

[00:04:32] Annette: Yeah. And I love it because you’re going to hear how Laureta had her back up against the wall. She had to start Airbnb when her roommates decided to up and leave her one day. And so I love that it goes from that story of desperation into this amazing life that they’ve created now. So let’s get onto it.

[00:04:51] Sarah: All right. James and Laureta, welcome to the show.

[00:04:56] Laureta: Hi.

[00:04:56] James: Thanks so much for having us.

[00:04:58] Laureta: Thank you.

[00:04:58] Annette: Of course. We have been chomping at the bit to have some New York City hosts on the podcast, and we’re just glad that you’re here today. You’re going to share with us. But before we dig into New York City, the regulations, you guys have been around the block, my little J-Lo reference there, but you’ve been around the block for a while hosting in New York City. Would you just get us started with your story and how you got started hosting in the city?

[00:05:26] Laureta: I started by living in a three-bedroom apartment. I was sharing with two other roommates. They were two sisters. They decided to leave New York City, and one day they told me, hey, we’re getting out of here. So I was stuck with a high rent. I couldn’t afford paying by myself.

[00:05:49] I freaked out. And that’s how I found out about Airbnb. And at the time. I was a struggling actor working as a server bartender. And when I found out about Airbnb, I started renting out the other bedroom. So I was sharing the apartment with guests from all over the world, and that’s how I started the whole Airbnb hosting experience. And I loved it.

[00:06:22] Annette: And that was what year, Laureta?

[00:06:28] Laureta: 2015.

[00:06:29] Annette: Okay.

[00:06:29] Sarah: Okay, so you’ve been doing this for quite some time.

[00:06:32] Laureta: Yeah.

[00:06:33] Annette: We’re probably thankful for the sisters now that they up and left, but man, that was a bold move on these sisters’ parts. But that’s what happens.

[00:06:42] Laureta: It was so scary.

[00:06:42] Annette: Your back against the wall. Yeah, your back was against the wall. You made it happen. So, James, when do you come into the picture? Did you rent one of these bedrooms?

[00:06:51] James: I did not, no. Would’ve been a much better story. No, I think I found out about Airbnb– found out. Everyone knew about it, but I found out the value of it probably on our first date.

[00:07:01] Laureta: Yeah.

[00:07:02] James: Because I was thinking about, I wanted to buy a building for long-term rentals and all that stuff, and she said I was a moron and that I should do Airbnb. Not anymore, just a that idea of more economical answer. And that’s when we started digging into that. And that led to our first building in Brooklyn.

[00:07:22] Annette: I love that. So date number one, Laureta’s like, this is what’s happening in my world.

[00:07:26] Sarah: [Inaudible] girl, Laureta. I love that.

[00:07:28] James: Yeah.

[00:07:29] Sarah: Okay. What year was that first date?

[00:07:33] Laureta: 2018. 2017, 2017.

[00:07:38] Annette: Laureta, after the sisters moved out, your back was against the wall. You start listing your place. Clearly, you’re sharing. We don’t have a lot of guests on our show. You are sharing this space with these guests from around the world. Did you have trepidations in the beginning? You being a single female there by yourself, what did that hosting look like in those early days, sharing the space?

[00:08:04] Laureta: Everyone ask me that question when they hear that, especially I remember my mom. She was freaking out when she heard that, hey, I’m hosting people from all over the place, and they’re coming, and they’re just staying next door. She was freaking out.  It was actually one of the best experiences I’ve ever had. And I was terrified myself too, but I tried to not let fear indicate what I’m going to do and what I’m not going to do. So I did it, anyway.

[00:08:35] So honestly, I do not remember not even one negative experience where I was scared or even annoyed or frustrated, nothing. They were just interesting people, like-minded, and they had this beautiful stories from their countries, and they just wanted to know where to go. And I was happy to share my local favorite places.

[00:09:06] So it was just wonderful. And prior to that, I think it was one of the worst times of my life because I was so lonely. I had just moved from Europe to New York City, so it was just perfect. It was what I needed to get back and start going.

[00:09:28] Annette: I love that. I’m just going to dig into some money really quick. Did the money start coming in and you were like, I’m not even in the look for new roommates, or was the plan in the beginning maybe I’ll host for a while I’m looking for new roommates? Did that cash infusion change your mind?

[00:09:53] Laureta: It was a three bedroom, so I couldn’t afford to rent both rooms at the same time on Airbnb. So I just did one bedroom and the other one long-term just to see how it’s going to go. And I remember I didn’t even have money to put furniture, but I wanted to make it nice. So I remember the one bedroom I made a bed from platforms.

[00:10:19] James: Palettes.

[00:10:19] Laureta: Palettes, wooden palettes that I found from a place in Astoria where I was living, and I put a nice mattress on top. I couldn’t buy nightstands, so I made them with ropes. I was very crafted back then and resourceful, which I missed.

[00:10:34] But it turned out so nice and people liked it. And I think within a couple of months, I was like, ooh, this is nice. And I’ll say I wasn’t very liked with the roommates I was getting, and I can be a little annoying with like how I want the place to be clean and looking nice, and this, and they didn’t really have interest in that.

[00:10:59] So I found myself being the mom and chasing them around and like, hey, can you please clean up here, all this? And I’m like, you know what? I’m going to clean everything myself and decorate it nicely and take care of the apartment, and I’m going to rent out the other room too. And I did it, and it was great.

[00:11:17] Sarah: Wow.

[00:11:17] Laureta: So within a couple of months really.

[00:11:20] Annette: That’s great.

[00:11:21] Sarah: That’s incredible. And operationally–

[00:11:24] Laureta: For the second bedroom, I did get a regular bed.

[00:11:28] Annette: You had some cash.

[00:11:28] Sarah: You had more income coming in. I love it. Operationally, did you have a lock on your door? Did your two Airbnb guests have locks on their door? Did you give them a key to your apartment, or did you have a smart lock? Talk to us about how once you figured it out, what worked best by having in-home Airbnb guests.

[00:11:53] Laureta: In the very beginning, because I didn’t know what to do either, I would greet them in person always, and I like to get to know them and see who is going to be staying in my house. But after a while, I want to say within the first year, I felt comfortable doing a self check-in with them. But in the beginning, it was all in-person, and they would have keys to the building and to the apartment and to their bedroom. And I had to log myself too. I used that.

[00:12:33] Sarah: Yeah, I love that. Okay, okay. So this is working great. 2015. 2017, you meet James. What happens next?

[00:12:45] Laureta: Before that, I had also found an apartment. Yeah, I had found an apartment in-house kitchen, and the owner was not happy with the long-term, how it was working for him, and he didn’t really have time to do any maintenance or really anything. He just wanted to collect rent, and he wanted a high rent for not providing any amenities or any work on the apartment.

[00:13:16] So I just said, hey, I’m happy to take care of everything, like maintenance and paint it and make it beautiful and all this all with my expenses, if it can allow me to do short term rentals. And he said, sure, go ahead. So I had also started doing that in-house kitchen, and that’s when he came–

[00:13:38] James: Into the picture.

[00:13:39] Laureta: Into the picture.

[00:13:40] Annette: So you had two different. Well, that’s great then because, James, you saw proof on two different properties in two different locations that were viable, that were creating revenue. So that probably helped sell you that she had that secondary location also under her belt.

[00:13:55] James: For sure. Yeah. Seeing it, eventually becoming a part of it and helping clean here and there, just seeing everything, it was eye-opening as to what the benefits of the short-term rental versus long-term is. And it was really no brainer after that. Just got to move forward.

[00:14:12] Laureta: I was doing the cleaning by myself back then, so when he wanted to go on a date or something, I was like, gosh, that again. Because I have a check in, checkout, I’m cleaning stuff. He’s like, I’m going to come and help. I was like, ooh, he’s a good one.

[00:14:28] James: You were too.

[00:14:29] Annette: He’s a keeper. Yeah. He’s helping you clean. James, did you already own some long-term rentals at this point in time, or were you planning on buying some additional real estate?

[00:14:39] Laureta: No, I didn’t own anything. It was just like everybody else in the world probably in the back of your mind as a way to get ahead. I had no action before that time, and it was really us talking and gaining confidence and knowing each other. That led us to that next step of, hey, let’s find a building that we can make this work. And that’s where we started going.

[00:15:02] Annette: Ooh, tell us about this building.

[00:15:03] Sarah: Yeah. So what happens next? So now you’ve got the Hell’s Kitchen. You’re arbitraging there. You are having guests in your own apartment. James is in the picture. He’s helping you clean. What’s next?

[00:15:15] Laureta: We got married and pregnant and all these things, but it’s our personal stuff.

[00:15:20] James: [Inaudible] all at the same time.

[00:15:22] Laureta: And on top of that, we found an abandoned vacant building in Brooklyn. I had started doing research on what’s happening in New York City and in other big cities regarding Airbnb because I knew that there’s going to be a day where the whole short-term rental in big cities and other places has to be regulated.

[00:15:50] Not everyone can rent whatever property they have, even if they’re renting a room or a house like that had to be regulated somehow. So I started doing research, and I found out that in New York City, there are buildings, class B buildings. They’re designed to be rented for less than 30 days. So you can legally rent them for less than 30 days.

[00:16:24] They are called single room occupancy, SROs. And I also presented all that to him. It was part of my pitch. We only started looking for those buildings. The idea was to have vacant buildings that are also distressed and in need of repairs because part of that also played– those buildings also help.

[00:17:02] I believe they’re designed to also be rent stabilized. So we didn’t want to mess with any of that. It’s perfect that it exists. People need that. Great. So our goal was only to go after the buildings that someone cannot just go and get it and start renovating it because it takes a lot of time.

[00:17:28] It’s actually complicated to turn it from class B, at least back in the day, to class A. It was just so complicated. So for us, made a lot of sense to go after those buildings that no one’s using and they’re just sitting there.

[00:17:44] James: Yeah. It also helps that as a result of that, with a year and a half time it takes to convert it from class B to class A, they’re an undervalued asset class, so we were able to buy this building at a discount to what a normal brownstone would cost. Because nobody wanted it. It took a long time to be able to convert it into a nice two family, and then it might sell out a premium, but that timeline, it’s a lot of money.

[00:18:10] So we were able to step into this, and it fits perfectly the mold of what Airbnb is and what short-term rentals are, typically under 30 days, typically that transient usage, which is what this is. So it was a great find for us.

[00:18:26] Sarah: So for all intents and purposes, was it commercial, class B? Is it commercial? Could you have turned it into, have you turned it into a hotel, or were there any implications there with the city?

[00:18:42] Laureta: Yes. Hotels are class B also, so they’re all in the same category basically.

[00:18:48] James: Yeah. We have registration with the city. We pay hotel tax. We’re not like a particular hotel. We don’t have a brand name yet, but we are in the same line and same classification as most hotels.

[00:19:00] Laureta: Just a class B part of it doesn’t make it all to be able to rent. Legally, you have to get the registration and license and collect occupancy tax and all this, but the class B is the first step and the major. Because you cannot anymore, I think, since September 3rd on any class A building, you cannot rent an entire apartment, an entire home. It has to be only a room.

[00:19:31] Annette: So what year did you have this foresight when you were looking at these class B properties? What year did you start doing your research on this, Laureta and James?

[00:19:43] James: It closed in 2019, but we started looking early in 2018.

[00:19:47] Laureta: Yeah, so my research was in 2017. It was way before that.

[00:19:53] Annette: Okay. And are there a lot of these on the market? Was it like finding a diamond in the rough? It doesn’t sound like it’s the MLS. Where do you go look for the style of property?

[00:20:06] James: There are fewer and fewer now. Because they were at a discount, a lot of investors were buying them, taking the year, year and a half to get their certificate of no harassment, and then converting them into class A. Convert them into two families because they could buy it for X price and sell it for double that within the timeline it worked.

[00:20:26] So there are fewer and fewer in Bed-Stuy, where our buildings are. Other neighborhoods still have some, but these are classifications that started. I think a lot of them are from the early turn of the century, ’40s, ’50s, because it was people coming back from the war. Guys need a room to stay, but they can’t afford a building, so they had built this classification to help guys coming back to get their feet on the ground.

[00:20:50] Annette: You said Bill Deans. Did I hear that right? Did you say plural? You have multiple buildings, this class B?

[00:20:56] James: We have two of them now. Yeah.

[00:20:57] Laureta: Two.

[00:20:58] Annette: Well, Sarah, we’ve got two new friends today.

[00:20:59] Sarah: We do. We do.

[00:21:00] Annette: And Laureta, I heard at the beginning you said you were actor, bartending, serving. James, did you have a full-time job during this? Because obviously, we’ve got to have some cash. I think while you’re running the numbers on this, what’s the normal day-to-day, your lives? I heard some marriage and kids in there. While you’re looking for these properties, what’s your day-to-day life look like?

[00:21:24] James: Our day-to-day life is busy. But we’ve also, to sidestep a little bit, built a great team. It just happened accidentally, but we’ve met great brokers. We’ve met great bankers. We’ve met great contractors along the way, and we’ve kept in touch, and when they find something or look at something, they’re able to reach out to us.

[00:21:53] Annette: They know you’re what you’re looking for.

[00:21:54] James: But I think in the early days, Laureta was working nonstop with what she was doing while we were renovating and going through the purchase process. I worked in energy, or still work in energy for the last 25 years. So that was a busy job that at times got extremely busy.

[00:22:14] So we were balancing everything together and complimenting each other, trying to help each other out during those times. With the first building, I think you were 10 months pregnant and still cleaning. The first couple of months, it was just a lot, but we were focused and wanted to push through.

[00:22:36] Laureta: Yeah. And at that time, he was still working at the office, so he would go there where he sued, look really nice and sharp, and then come back and go to the building, which was a mess changing to his painter handyman/doing everything close and start doing renovations and all the crazy stuff we used to do. But we were, and still trying to balance that now the last few months, but on our free time, if you ask us, hey, what you love to do? We look at properties. On weekends, we go and see open houses. We love to do things like that or explore locations and areas where we can build and how it could go. So our life was our–

[00:23:37] James: Yeah.

[00:23:38] Laureta: Yeah.

[00:23:39] James: It was fun. It was fun.

[00:23:40] Annette: Great.

[00:23:42] Sarah: So talk to us about the community there in New York City. Laureta, James, over the past several years, have you met other short-term rental hosts, whether it was pre new regulations or now? Did you have a community there that you could talk to people who did what you do?

[00:23:59] Laureta: I used to go to the meeting that Airbnb would host and I had met a few before COVID. After COVID, I lost touch with a lot of them. And then after the regulations, they all really stopped. But prior to that, I used to go to those meetings and meet other hosts.

[00:24:25] Annette: So this September 3rd, the date that the regulations changed, you were not nervous at all, or was there a little bit of nervousness, like if you were still going to be able to even list on Airbnb? How were you impacted by that? Were there email chains from Airbnb? I’m just trying to imagine if I’m on Airbnb in New York City with the addresses, what was that communication like?

[00:24:48] Laureta: They placed several people who contacted us directly and answered our questions.

[00:24:58] Annette: Okay.

[00:24:58] Laureta: And we just wanted to make sure that– just to confirm that, hey, this is all good. We’re good to go. And they confirmed it. And after that, we were not nervous because Airbnb released the list of New York City’s all registered buildings that are allowed to rent, and we were there. Our addresses were there. Oh, one of them, I’m sorry.

[00:25:32] James: One of them wasn’t. We had to send in a form to the city, but we had the hotel, everything was already listed. It just didn’t make that form for some reason. So they corrected that in the next release, and yeah, then we were good.

[00:25:43] Sarah: What happened with the Hell’s Kitchen arbitrage?

[00:25:47] Laureta: Oh, that, I had to stop because when we got our building, I was also nine months pregnant, as he’s saying. We had six units there, and we were staying in one of them. So I was cleaning those. I still had Astoria, and it just got too much. I just couldn’t–

[00:26:11] Sarah: Wait, wait, wait, wait, wait. You were going from Astoria to Hell’s Kitchen to Brooklyn operating your rentals?

[00:26:18] Laureta: I believe I did say that we are not okay.

[00:26:22] Sarah: I wouldn’t go see friends in Brooklyn, let alone– wow. That’s a hike, waiting for the train, getting on. Did you haul all your stuff or are you driving? Did you have a car?

[00:26:33] Laureta: I was driving. I remember at that. I was driving back then. But what’s funny is that the other day I was talking with a very good friend of mine, and we’re pregnant with our third one, and I wasn’t feeling very good. And I was like, I don’t know. I feel like all I do is being pregnant and breastfeeding, and I feel like I’m not really doing anything. And there was a pause. I hear from the other line, are you kidding me? Do you want me to list you what you’ve done? And I stopped. I was like, okay, I’m not going to complain.

[00:27:05] Annette: Laureta, I got to know. You were doing some serious clean. What’s your number one cleaning hack tip or trick? What’s something that when you were in there hustling, doing all the turnovers that you’re like, other hosts need to know about this? Do you remember? Or James, because you were cleaning too, James.

[00:27:21] James: I was taking orders. That’s all I was doing.

[00:27:23] Laureta: I do remember, because even now, I have to make sure that these things are getting done. So I have trained all our cleaners that now we’re not doing the cleaning ourselves, and I still go. And if something is not like that, I just do this, and I start going.

[00:27:41] But my number one, my thing is always the bathrooms because that’s what I notice when I go to other houses, other rentals. Especially when you have wide floor tiles, you cannot hide anything, so no matter how much you clean it, you have to go, at the end, with a paper towel and go through all the surfaces. That was my thing. I would always do that.

[00:28:10] Annette: Just like one last swipe.

[00:28:11] Laureta: The dark tiles of the floors.

[00:28:12] Annette: One last swipe, is that what you would do, Laureta, after everything was clean?

[00:28:16] Laureta: Yes.

[00:28:16] Sarah: I love it.

[00:28:18] Annette: So good.

[00:28:19] Sarah: Do you guys know, though, what did other hosts do who didn’t have class B properties who maybe owned the property but they didn’t live there? Do you know– you may not– but did they convert them to 30 plus day stays? Do you think most people just shut them down and convert it back to long-term?

[00:28:38] Annette: Is there a underground? Is there a underground?

[00:28:41] Sarah: Are people doing things illegally? What is going on?

[00:28:43] Annette: There one on LinkedIn that I’ve been seeing. It’s like this invite only underground New York City.

[00:28:50] Laureta: Yeah, yeah. So a few homes that we know personally, they have converted to long-term. And thankfully, that’s a great market in New York City as well. But I have heard, and I know from the forums with other host that I am, that there is this thing now where on social media and Facebook, people just run their places there. Yeah.

[00:29:21] Sarah: So off of the Airbnb platform, they’re doing things underground, old-school. What are those bars called?

[00:29:27] Annette: Speakeasies.

[00:29:28] Sarah: Speakeasies.

[00:29:29] Annette: They should be called sleepeasies.

[00:29:30] Sarah: Stayeasy. I don’t know.

[00:29:32] Annette: Sleepeasies. James and Laureta, do you have a direct booking site? I didn’t see that on your intake form. Are you listing only on Airbnb? Were you on VRBO? Where are people finding your properties?

[00:29:47] Laureta: At the moment, we’re only on Airbnb.

[00:29:49] Annette: Okay. And did you see after, September 3rd, your bookings skyrocket? Have you felt an impact or seen a financial impact in the lowering of the amount of short-term rentals in New York City?

[00:30:05] Laureta: The occupancy rate is–

[00:30:07] James: Our occupancy rate is always high.

[00:30:10] Laureta: High. Yeah. But rates have gone up.

[00:30:13] Annette: Nice. Okay. So good for you. Was that something that you used a dynamic pricing software? Was that you just trying to test the market and raise your rates? Was that something right after September 3rd, you went in and changed? Can you give us some transparency and what that conversa– since you guys were talking to real estate all the time, those were probably exciting conversations for you, and what was that plan of attack?

[00:30:40] Laureta: Yeah, numbers is his thing.

[00:30:41] James: I wish we had something like dynamic pricing that worked automatically. But it’s usually just us talking, seeing the reservations come in, raising or lowering the prices accordingly. And as you know, right around that September time, we started to notice we were getting bookings further out sooner. Generally, we’re like, let’s say six weeks out, is probably our norm.

[00:31:04] We’ll catch one here or there that’s longer. But all of a sudden, in September, NUVI and Des were all just getting booked up very quickly. So we had to raise prices accordingly to meet that demand.

[00:31:17] Annette: Right.

[00:31:18] Sarah: Is this your full-time job now, James? Are you still working in energy? Laureta, are you still auditioning, or are you fully focused on the short-term rentals?

[00:31:27] Laureta: I had to stop that.

[00:31:29] Annette: You and Sarah can and talk offline.

[00:31:31] James: Stopping soon.

[00:31:32] Annette: Oh, you are.

[00:31:33] Sarah: Oh, wow.

[00:31:34] Annette: James, do you have a day? Do you have a date in mind?

[00:31:39] James: February 29th.

[00:31:41] Annette: What?

[00:31:41] James: Not that anyone is counting.

[00:31:42] Annette: Oh my gosh

[00:31:43] Sarah: Yeah, congrats.

[00:31:45] Annette: I just got goosebumps. That’s huge. Uh-oh, Laureta. You know what happens when men retire? He’s going to be like, call my mom, call my mom. It’s like he’s home all the time now. I’m just joking, James. But now he can be doing more stuff at the properties.

[00:32:02] James: I’ve been home all the time since COVID. We’ve never returned to the office, so we see way too much of each other the time.

[00:32:08] Laureta: He’s been working remotely since then, so I know a bit about that already.

[00:32:14] Annette: Just joking.

[00:32:15] Sarah: Your team, are they W-2s, or are they contractors? Like your cleaners. Do you have inspectors? Do you have guest services that help chat with potential guests? Talk to us about your team structure.

[00:32:28] James: Well, they’re all contractors. That’s where we’re at right now. But in terms of who we have and what we do, you really manage all the day-to-day and conversations from the hospitality standpoint. It’s really primarily you dealing with all of our guests still.

[00:32:43] Laureta: And I do love to do that, and I feel like I’m having very hard time letting go. I don’t know. I know I have to outsource it so we can get better and grow, but I’m having a hard time letting go because it’s my favorite part, and I feel like no one can do it, not as good as I can, but I get so obsessed with guests really having a great time. I naturally have this thing that if you present me a problem, I’m going to find a solution, and I’m happy to look for it.

[00:33:19] I’m not going to get frustrated. I’m like, oh, really? On a Sunday night? I’m like, ooh. So I’m having a little bit hard time to do that, but I manage all the messages. I talk with a guest and everything for all our eighteen listings. So I do believe there’s time to let that go. We have housekeeping in our Brooklyn buildings and handyman that go there regularly and take care of everything.

[00:33:53] And we also have a project on Seneca Lake. We have a same type. It’s a farmhouse. It was a historic building, abandoned, terrible shape. People who are wise go there, and they’re like, yeah, no, I’m out of here. And we were like, ooh. So we have another one there, and we are working on– it’s a 20 acres property, and it has three buildings, and it has a farmhouse, a carriage house, which we’re turning into a nine-unit boutique hotel and a barn. We have people there also, cleaning crew and landscaping, and handyman, and plumbing, electrician, all this.

[00:34:41] James: Up there we need all that, the plumbing, especially for now.

[00:34:43] Laureta: Yeah. But we’ve been very lucky, and we find extremely good, reliable people who care and are great.

[00:34:55] Annette: It is lucky. Where did the beach properties start to get woven into the scene? Because when I went over to your link, it said, Pawleys Island. Then I see some Surfside Beach. I’m like, they’ve got Brooklyn and the beach. So I’m trying to figure out, when did the beach start to come into play, and are you remote managing all of that?

[00:35:18] Laureta: Yeah.

[00:35:20] James: Yeah. The beach came into play two years ago. Yeah, my energy experience, part of my life there was risk management, and we just started talking about the risks in Brooklyn and stuff like that. So we thought about geographic diversity, and we had an acquaintance, a friend of mine lives in Charleston.

[00:35:41] Laureta: They had a summer house in Pawleys. We came down to check it out, found a place, got that one, ended up finding a few more. And it just fit with everything else we were trying to do and where we wanted to take our life with everything.

[00:35:56] Annette: I love that risk management. That’s smart.

[00:36:01] Laureta: Our living situation in New York City was still a mess because we were like, the balance we’re talking about, there was none at that time. So we were so focused on working, working, working, and we had neglected that part. So we weren’t very happy with how we were living and our place, and we were renting, and then we decided to come to Pawleys Island and just fix, renovate the place that we got, live in the area, try to find the team and everything, like we did on Seneca Lake.

[00:36:37] We did the same thing. We lived there for a year. We renovated it ourselves and tried to explore the area and build a team while we’re there. So we tried to do the same in Pawleys. And I was at least swearing that we’re going back.

[00:36:58] James: Dead set on Brooklyn. Brooklyn’s our home. 

[00:37:00] Laureta: I went through a lot to go to New York City from Albania, Europe. So we’re going back, mister. And he is like, okay. He always liked to explore a different area. And then we came here, and I remember in the beginning we would look at each other and be like, is this a joke? Are people really nice or there’s something going on?

[00:37:21] James: What do they want from us?

[00:37:23] Annette: Oh my gosh. Laureta, you and Sarah are seriously spirit animal sisters. There’s 20 specific– I want to go back through this episode and quote you. They are exact things that Sarah says because she trusts– when she just moved to Columbus a few years ago from New York and she thought we were all being fake and nice too, and she didn’t trust anybody.

[00:37:45] James: They want something.

[00:37:46] Sarah: I still don’t.

[00:37:47] Annette: Yeah. She’s like, they want something, Annette. Don’t trust them. And I’m like, no, they’re just being nice.

[00:37:53] Sarah: So you guys are no longer in New York. You live full-time at Pawleys?

[00:37:57] James: Yeah.

[00:37:57] Laureta: Yeah.

[00:37:58] James: She changed her mind. And I went along with the ride, but it’s just too easy down here, too nice, too friendly.

[00:38:06] Annette: I love it.

[00:38:07] Laureta: Brooklyn makes everything harsh.

[00:38:09] Sarah: It does. New York does that. There’s a lot of red tape, and it’s like, ah, you want to conquer it because, everyone says that if you make it there, you can make it anywhere, which you did make it there, so you can make it anywhere. So I guess there’s that. So how is it, hosting remotely then, especially in a busy market like Brooklyn?

[00:38:25] Annette: And the Seneca lake property, like, oh my gosh, you’ve got this farmhouse and buildings. I’m stressed out and I’m not on the beach with you guys. I’m just talking to you.

[00:38:36] Laureta: We love to travel, so we still go.

[00:38:39] Annette: Okay.

[00:38:40] Laureta: And we works a lot when we’re there to try to see if there’s any issues and how we can fix them. But I do believe that if you have lived in the property and in the area for at least a few months, and you have built a good team, it’s very doable after that to just manage it and not be there yourself, very doable. We have self-checking in all our properties. If anything happens, we do have people that are going to be there in a reasonable time. So I think it’s very doable.

[00:39:20] James: Yeah, I think it all goes back to finding the right people, having a great team. And honestly, you say this, but I notice it too, a large majority of the guests we have love the fact that they don’t have to talk to us. They get to go in. They do their thing. They have their stay. They enjoy every part of it, and then they say, thank you. We’ll get a message. Everything was great. Thank you. And that’s it.

[00:39:43] There are some who ask lots of questions, and she loves that part of it too. But for the most part, a lot of people, I think really just want to have their experience as if it’s their place. And that’s what we’re trying to provide them.

[00:39:57] Annette: I love it.

[00:39:58] Sarah: I have a complicated question for you. Do you think the regulations that came through New York City being hosts yourself, do you think it was the right call?

[00:40:06] James: You want to go or me to go?

[00:40:07] Laureta: You go.

[00:40:10] James: Start us off.

[00:40:12] Laureta: Unfortunately, I know how much it affected a lot of hosts, and I have been in their place where I was renting in class A buildings that were meant to be for long term. And I get how much they’re hurt now financially, but yes, it was the right thing to do. New York City and all big cities, and even here, they’re trying to regulate it. There’s a crisis in long-term rentals and prices are going extremely high now. We cannot take all those residences and rent them short-term. I get it. Financially, it’s great. But what about other people that they just need a place to stay, locals?

[00:41:08] Annette: James, what’s your take?

[00:41:14] James: Everybody knows there’s a housing crisis, and it’s not just the US. It’s everywhere. I remember in my time in the city, there was a guy, and his platform was the rent is too damn high.

[00:41:23] Laureta: I remember him.

[00:41:24] James: And that was 20 years ago. Yeah, that was 20 years ago. Literally, that’s all they would just say. Get on stage. The rent’s too damn high. But friends who have apartments, their rents are raised a 100% year over year. I have friends who had 2,000. They’re going up to 4,000. It’s a lot. The buildings weren’t meant for that. The neighborhoods aren’t meant for that.

[00:41:48] People talk about families, areas, people being priced out. And it’s happening in New York. It’s happening in cities throughout the world, really. You hear about Spain, all these places. So yeah, it has to happen because there’s another issue that’s caused as a result of this disruption that Airbnb has created, and it’s really what it is.

[00:42:11] The short-term rental market is a disruptive mechanism to change how housing works really everywhere. And you see this in other entities and other people want to be disruptors because it does create opportunity. But anytime there’s a big change with opportunity, you’re going to get regulations. And I’ve seen it in energy. Makes sense that it’s happening here. It’s just a natural progression.

[00:42:34] Annette: What are the regulations in Pawleys Island in the area that you’re in now, if there are any?

[00:42:42] Laureta: Yes. Same with south side. They are trying to have, let’s say, from five blocks to the beach, you are allowed to rent short term if you do have a registration and license to collect taxes and everything. And after that, it’s all residential, and you are not allowed to.

[00:43:04] Annette: Okay. And the class B, going back to New York City in the class B, do you think that after the September 3rd, no more short-term rentals, do you think that your property immediately had an increase in equity because of you being able to legally short-term rent?

[00:43:27] Laureta: The equity part we haven’t explored yet.

[00:43:30] James: Yeah.

[00:43:31] Annette: I didn’t know if it became a hot market for class B.

[00:43:35] James: I think people are still trying to figure out the answer. I’m sure plenty of people know it, but I think people are still trying to figure out the answer. I think also, when you’re equity and value of properties, we’re talking about banks for the most part. And banks are very conservative. Most banks we’ve talked to because we’re financing a lot of the properties that we buy, and most of the banks we talk to are still not counting short-term rental income as income.

[00:44:02] You’ll find a couple here and there who are changing, but banks are slow to the game always. That’s why they’re banks. They just take their time. They’re super conservative. So I think maybe if you find some private investors or financial funds and you say, hey, look at this revenue. My value is worth eight times that. Maybe you can get a value at that. But for the most part, banks and anyone else who’s buying it, they’re going to look at it as if it was just another residential house on the block.

[00:44:37] Sarah: I think my last question for you is, for class B, can you long-term rent class B, or can you only do less than 30 days?

[00:44:45] James: You can long-term rent it, but as soon as you go over 30 days, the renter has squatters’ rights.

[00:44:51] Sarah: Right.

[00:44:51] Laureta: So it creates that thing. And in New York City alone, even with regular long-term rentals, the tenant rights that they have are extreme.

[00:45:03] Sarah: They are. Okay. Annette, any other questions on your end?

[00:45:06] Annette: My last question I think is going to go back to the regulations too. Currently, are hosts still trying to rage against the machine and get this overturned? Are you getting emails from Airbnb as if you weren’t approved? Like, hey, we’re working on this to get this overturned. Have you heard what the– what are the old hosts? Are they still thinking that maybe there’s a glimmer of hope that they could be overturned and back to the old ways, if you at all?

[00:45:35] Laureta: We’re not getting messages from Airbnb because they can see that we’re good. But we’re getting messages from other hosts where they’re trying to figure out what they can do, and they’re like, hey, how did you get your place registered? Because we’re not able to figure it out.

[00:45:56] Annette: Right.

[00:45:58] James: I think Airbnb and New York City were working on this deal for a very long time.

[00:46:02] Sarah: Mm-hmm.

[00:46:02] James: And I think that ship has sailed as to this is what it is. That would be my assumption, my belief on that. Because it wasn’t like an overnight decision. It was something that was ongoing for the whole time. And it was been a conversation since we started. I’m sure it was a conversation before that.

[00:46:19] Laureta: In 2017, when I was doing all my research and looking into buildings, I already knew that this was going to happen and they were talking, and the city was trying to pass some type of regulation.

[00:46:36] Annette: No, that’s great. And you definitely were seen ahead. You had your crystal ball, like this is smart thing to do.

[00:46:42] Sarah: But I really think that’s the thesis of this conversation, is listeners out there, just because you are in a vacation rental market or a high tourist market, to always be involved. We’ll give a shout out to our friends over at Rent Responsibly.

[00:46:58] If you don’t know what to say at city council meetings, if you don’t know how to make a decision that you feel good about, Rent Responsibly has some awesome resources. We’ll put the link in the bio there so that you can be a part of the conversation. I love how Laureta and James, you did it in a way that worked within the fabric of New York City and what works best for long-term residents.

[00:47:22] There are ways that you can do this. You could buy a boutique hotel or motel. There’s room for all of us, but I do agree that fair regulations is a great way just to– it’s a complicated topic, and I’m not saying we have all the answers, but I love that you two were so proactive and the diversification of your portfolio, I think, is also quite brilliant. If our listeners wanted to reach out to you two, what’s the best way to do that?

[00:47:47] Laureta: We’re trying to be on Instagram now to share our journey.

[00:47:52] Annette: Just add something else to your plate there, Laureta.

[00:48:01] Laureta: Yes, I was getting an itch. One more project to go.

[00:48:06] Sarah: We’ll put your Instagram handle, and in case one wants to come stay with you too in any of your properties. We would love to connect our audience with you.

[00:48:13] Laureta: Yes, yes. Absolutely.

[00:48:16] Annette: We’ll link to the Instagram. We’ll put the link to their Airbnbs. So James, I think you’re going to be an Instagram husband here come March 1st.

[00:48:23] James: I think it’s already started, slowly but surely.

[00:48:27] Annette: Oh, we are like just so incredibly thankful that you came on today, shared your story. That could be very different. But again, you just planned ahead, and Laureta, we love that you’re cleaning. Definitely, I need to get a Zoom meeting with you and Sarah so you can just be your spirit animal.

[00:48:48] Sarah: Fellow actress, bartender, server. We can [Inaudible].

[00:48:51] Annette: Yeah. But we are so thankful that you shared your story, and I know I’m super inspired by your story. I know other listeners out there are going to be inspired. So hosts, if you are going to Brooklyn, if you’re going to Pawleys Island, check out their listings. Stay with them. Let them know that you heard them on the show today.

[00:49:09] Sarah: And with that, I am Sarah Karakaian.

[00:49:11] Annette: I am Annette Grant. And together we are–

[00:49:12] Both Annette & Sarah: Thanks for Visiting.

[00:49:13] Sarah: Talk to you next time.