People used to cherish having a 9-to-5 job, but now, it has lost its luster. Everyone wants to turn their dreams into a thriving business. Starting a business is an excellent move if you want to have financial independence. For beginners, the most challenging question they need to answer is what business should I start?
Is it profitable? That’s probably the next question you should answer too. Everyone who starts a business wants to make it profitable. However, there’s so much competition in nearly every niche and industry. Entrepreneur Chi advises you to build a business by renting out properties to travelers.
“You don’t need huge financial resources to become part of the hospitality industry. You need to list your property on Airbnb, and you can rent your property to travelers or even tourists,” Chi said. Chi owns multiple properties which are listed on Airbnb and earns millions of dollars from renting out his properties.
A Troubled Teenager
Chi is an excellent proof that your past would not define your future. He belongs to a family of Vietnamese immigrants who migrated to California for greener pastures. He grew up in one of the roughest neighborhoods in San Francisco.
Chi recounted that he grew up in poverty. “We lived in a small studio apartment. There are four of us. I used to sleep on the floor and only got my own bed when I turned 18,” he added. Chi said that his father wanted him to become the best student in the world. On the contrary, he saw himself as the worst student in the world. “I hate going to school, and I got into a bunch of trouble as a teenager,” he continued.
Chi’s Business Journey
Chi’s first business was selling reverse mortgages to older people. “Reverse mortgages are government loan programs for people 65 years and older. It guaranteed them that, as long as they live in their homes and pay their property tax and insurance, they can never be foreclosed,” Chi said.
Chi added if anything happens to them and they pass away, their heirs inherit the home with equity. “If the equity ran out and the homeowner outlived the bank, the heirs never inherited any debt,” he added.
He made millions of dollars by selling these government loan programs for a decade until the government implemented a policy that put him out of business. The US Federal Housing Administration (FHA), the state-run institution that sponsors and ensures all these government loans, changed the guidelines in October 2017.
The new policy required loan applicants to have a credit qualification. “It means loan-borrowers should have good credit to qualify, but those who need these loans are those with bad credit. It disqualified about 75% to 80% of my clients. And the remaining 20% of my clients, at that time, who are qualified, didn’t need the loan because they have good credit,” Chi said.
Chi tried to turn his business around through massive marketing campaigns. Unfortunately, it didn’t work, and Chi suddenly realized that it was the end of his business.
After losing everything he had built in the last ten years, Chi decided to spend a few weeks with his parents and think about his future. “Everything I own is gone, and I must pay the rent for the place I lived in. I called my dad and mom and told them that I want to spend time with them,” Chi said.
In his soul searching, Chi remembered Airbnb. He thought he could list his place on Airbnb and rent it out. “I don’t know what I’m doing. I’m not even sure if that’s legal. But I know it could cover my rent. So, I rent it out on Airbnb while I spend time with my parents,” he said.
It was an excellent move for Chi. The property earned $2,500 in those two weeks. “The property made more money than I could nearly pay my rent and utilities for that period,” Chi narrated.
A New Venture
Chi was excited about turning this discovery into a business. He figured out how to finance the entire operation with no money. Chi used credit cards to rent a bunch of properties and furnish them. Then, he listed those properties on Airbnb.
Chi rented two properties in San Francisco, generating $5,000 in monthly revenue in the first year. In the second year, those properties made close to $10,000 monthly profit per property.
“In year two of my Airbnb business, I earned $2.9 million per property and generated a total profit of about $6 million. In the next nine months, I ended up having up to 30 homes, with yearly earnings of $2.4 million,” Chi said.
Today, Chi buys properties monthly worth $2 million to $5 million and puts mortgages on them. “My Airbnb income pays off all the mortgages, and I make up to $10,000 a unit,” he added. He also shares his Airbnb experience with other people and helps them start renting out their properties. “I teach them how to find the landlords that would allow them to use their properties for Airbnb. How to find a profitable property and eliminate any risk?” he said.
He concluded that sometimes, challenging times are life’s way of rerouting us towards a better future.