February 5, 2024

How Brandi Jones Scaled Her Corporate Housing Business to Over 60 Units and $180,000 in Monthly Revenue Without Owning a Single Property

Before Brandi Jones had a thriving business of mid-term rentals, none of which she actually owns, she learned early on that she didn’t like long term rentals thanks to her parents being landlords. She thought short term rentals would suit her personality better, but as her hometown of Nashville, along with so many other cities, began implementing restrictions on short term rentals, she realized mid-term rentals were a better fit for her.

Her approach to mid-term rentals (MTR) is a little different than most. She doesn't purchase any properties; she doesn't have to deal with mortgage applications, escrow, etc.; she simply rents apartments. This real estate business strategy is known as "rental arbitrage" and essentially involves profiting from the difference between her cost of securing the rental property lease, furnishing it, and subleasing it to her own tenants; though, these "subleases" are more accurately referred to as a "master lease" or "corporate lease." These special types of leases are almost exclusively for corporate housing and are generally only available to business entities (LLCs or corporations), not individuals. Corporate housing refers to furnished, temporary housing that is leased to businesses for the use of their employees, or in this case, re-rented, typically for stays of 30 days or longer.

How to Find Apartments Willing to Do Corporate Housing

Brandi explains how to locate apartment buildings that provide corporate housing on Apartments.com. Armed with this knowledge, she contacts the apartments in question and asks for a corporate housing application in order to rent a number of their units. She explains that when speaking with apartment buildings, there is no special script to employ. Simply explain what you're looking for to the leasing agents and speak to them as you normally would rather than as someone reading from a script. Brandi gets about 10 to 15 leads per day on Furnished Finder, which she then sends to her website to secure the booking.

Furnishing Strategy

All of Brandi's apartments are furnished and decorated to a "House for Now" standard. Wi-Fi, electricity, water, trash removal, and access to community facilities like a pool and gym are all included. All of her apartments are furnished by CORT Furniture Rental. She adores CORT because they will set up everything for you in about an hour and deliver every piece of furniture you require.

By using CORT, she typically spends under $200 per month on items like couches, chairs, bed frames, box springs, mattresses, headboards, rugs, side tables, lamps, and TVs. She usually spends an additional $400 at Target on small items like kitchenware and houseplants to finish the apartment.

Formula For Success

To succeed in the world of rental arbitrage, Brandi simply doubles the rent. She knows she can rent the apartment furnished for $2,800 if the rent is $1,400 per month for the apartment she'll be renting. In addition, she bills $295 for all utilities per month.

Ask for a discount when you speak with the leasing manager, says Brandi. Since you are calling a business rather than a consumer, it is appropriate and expected that you will request discounts or concessions. One month free, no deposits, and no additional fees are frequent inclusions in discounts. In order to begin the negotiation, she first inquires about the "move-in special" or other promotion that the apartment is currently running.

Brandi's business makes a whopping 40% profit after all costs and salaries are covered, which is exceptional for the real estate industry. She exclaims, "Thanks to Furnished Finder, it lets us live our real estate dreams. "No other industry can beat those kinds of margins."

Landlord Logistics

To handle a large portion of her business, Brandi works with virtual assistants, many of whom are from the Philippines. In the Philippines, virtual assistants typically make $4 per hour, but she pays them more because they deliver excellent work. Brandi used www.OnlineJobs.ph to find her VAs.

Due to the time difference, she adores having VAs in the Philippines. Someone from her team is able to respond to a lead that comes in at 2 a.m. within 10 minutes, creating a fantastic first impression with potential tenants and increasing the likelihood that she will be able to secure them as a tenant.

Brandi is aware that people looking for accommodations frequently message several properties during the same online browsing sessions. Brandi has a very high chance of turning those leads into tenants because her team can respond to those leads so quickly.

Securing 5 Star Reviews

While the majority of tenants think reviews should only be left at the end of a rental, Brandi says that asking for one early on, frequently in the first week, is a great way to get a favorable review. Since they are generally eager to explore their new surroundings, the tenants are usually in a good mood when they first move in. She can also inquire about the tenant's opinion of the mattress because CORT furnishes the majority of her apartments. Thanks to CORT, she can easily have the current mattress replaced with a more comfortable one if it's too soft or firm. Her renters are often impressed by the fact that she can replace the mattress at no extra charge.

Additionally, the tenant is questioned about any items that might be missing from the apartment and suggestions for improvements. By doing this, Brandi is able to address any issues right away that might otherwise persist in the tenant's mind and result in a bad review.

Brandi’s Preferred Apartment Size

Brandi only works with studios and one-bedroom apartments. Studios are typically the least expensive in an apartment building, and they are convenient for quick cleaning and tenant turnover.

How to Manage Over 60 Units

As you can imagine, managing over 60 units entails a lot of moving parts, something Brandi uses rental management software for. Landlords and property managers use property rental management software as a tool to simplify the rental process for their properties. These software packages typically provide a number of features, such as the capacity to market available properties, manage lease agreements, screen tenant applications, plan maintenance and repairs, and gather rent payments. Additional features in some property rental management software include tenant screening, budgeting tools, and the capability to monitor occupancy rates and financial results. Brandi's preferred management software is Yardi.

Negotiating with Tenants

With her tenants, Brandi never bargains on the rent. The white sheets, white pillowcases, rugs, and other extras she adds to her units are sometimes not appreciated by tenants who like to negotiate on pricing, and as a result, the unit doesn't receive the respect she would expect. Her astounding 96% occupancy rate suggests you don't need to settle or give in when asked by an applicant for a lower rental price.

How to handle check-in with over 60 units

Brandi adores using the Latch electronic door lock, which enables cell phone entry into apartments. If she is unable to install her electronic door lock, most of the time, the apartment complex's front desk is happy to assist by holding onto the new tenant's key. Brandi also has a welcome basket of Champagne and small snacks waiting for her new tenant's key.

Pets

Most landlords believe that allowing pets results in shredded furniture and damaged rugs and carpets. Brandi adores renters who have pets or service animals. She starts by asking about the pet's weight and breed. She requests that they send a copy of the animal's vaccination record, which tells Brandi that this pet owner is responsible for their animal and probably won't cause her any problems.

Rather than a refundable pet deposit, Brandi charges a $300 pet privilege fee. She does this with the knowledge that the comforter will almost certainly need to be replaced because pet fur will unavoidably get inside of it. Additionally, it compensates for the deep cleaning fee she will have to pay her housekeepers, who will undoubtedly have to put in more effort to get the apartment back to "move-in ready" condition.

Favorite Aspects of Furnished Finder

For leads, Furnished Finder asks the perfect questions. Brandi appreciates that the lead informs her and her staff of the guests' requested length of stay and any additional requests. She also values the fact that anyone who contacts Brandi has already qualified themselves as a good fit for her properties because her Furnished Finder listings are so thorough in terms of fees, amenities, and policies.

Master Lease Requirements

Typically, you cannot sign a master lease with an apartment complex unless you're a business entity, such as an LLC or corporation. Simply creating a business entity is often not enough, however. Your business needs to establish a business credit rating.

Any small business owner seeking to establish credibility and gain access to financing must first establish a business credit rating through Dunn and Bradstreet. As a top provider of credit risk analysis, Dunn and Bradstreet's Paydex score is frequently used by suppliers and lenders to determine a company's creditworthiness. A high Paydex score (their name for a business' credit score) can help a business qualify for lower interest rates and better terms on loans and lines of credit.

You'll first need to obtain a free DUNS (Data Universal Numbering System) number, which is a distinctive nine-digit identification for businesses. It serves as the fundamental foundation for a business credit rating.

Small businesses can establish a good credit history and raise their credit score by establishing business credit under Net30 and Net60 terms. Net30 and Net60 are examples of payment terms that outline how long a company has to pay its invoices. Paying within 30 or 60 days of the invoice date is referred to as "net 30" and "net 60," respectively. Businesses can show their financial responsibility and establish credit by paying invoices on time and maintaining a good payment history with suppliers and vendors.

Businesses can better manage their cash flow by giving themselves more time to pay their bills by using Net30 and Net60 terms. The use of these terms, however, can also have a negative impact on a company's credit score if payments are not made on time. It's essential to establish and maintain a consistent track record of on-time payments if you want to establish business credit using Net30 and Net60 terms. In the eyes of lenders and suppliers, this can help a business show that its finances are stable and increase its creditworthiness.

Insurance for Rental Arbitrage

If you are renting an apartment under a master lease and then re-renting it, you should have a commercial insurance policy; in fact, the apartment complex will most likely require it. This is due to the fact that a commercial insurance policy is created especially to safeguard businesses and commercial properties.

Conclusion

In conclusion, Brandi Jones has achieved success in the world of mid-term rentals by utilizing a novel business strategy known as "rental arbitrage." She has grown her business to over 60 units and makes $180,000 per month in revenue without owning a single piece of real estate. She does this by obtaining a master lease or corporate lease on apartments and subleasing them to her own tenants. Brandi has been able to make impressive profits and realize her real estate dreams by maintaining a strong team and furnishing her apartments to a high standard. Others might have the same kind of success in the world of mid-term rentals if they take her advice on how to negotiate with apartment buildings and use the tools that Furnished Finder offers.

Listen to the Podcast here

www.furnishedfinder.com

Author : FF Team