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- Adam Masato bought land in Joshua Tree, California, after watching a YouTube video by Robuilt.
- Masato then worked with a pre-fab home manufacturer to build a luxury short-term rental property.
- The property earns an average of $8,400 per month in passive income.
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In August 2020, 35-year-old Adam Masato stumbled upon a video on YouTube by creator Robuilt outlining how he makes money renting out tiny homes on Airbnb in Joshua Tree, California.
At the time, Masato and his wife, Diana Hernandez, had been living rent-free in a spare bedroom of his in-laws' house for almost a year. The millennial couple saved almost 100% of their combined income of $150,000 per year; Masato is a manager at a healthcare IT company, while Hernandez is a therapist with her own private practice.
Besides saving all of their income from their day jobs, the couple also rented out the condo they moved out of in 2019 to pocket an extra $1,100 per month in rental income, according to records reviewed by Insider. While their expenses were low, the couple invested their money aggressively, and Robuilt's YouTube video came into their lives just when they were looking for the next opportunity to invest in real estate.
Related: The best real estate investing apps »
Masato was priced out of the Los Angeles real estate market
By the time Robuilt's video popped up on his YouTube feed, Masato was already burnt out from scrolling through overpriced Los Angeles real estate listings. The video outlined every detail of making money through luxury Airbnb listings with $275,000 in startup costs.
From the video, he learned:
- What makes a piece of land in Joshua Tree a worthy investment
- How to find trusted pre-fab manufacturers and property managers
- What design features create the best experience for guests, which then drives up the price per night
- How to earn high ratings on Airbnb
"The second I saw that video," Masato says, "I stayed up late just looking for land and I was like, 'Wow, he's not lying. This is affordable!' I started doing the market research and saw that these Airbnbs were booked.The numbers he was throwing out, it seemed feasible."
Eight weeks after the video was published, Masato closed escrow on his own piece of land in Joshua Tree for $39,806, which he paid for with savings.
Get started investing in real estate with Fundrise »
Masato paid $300,466 for a pre-fab home build with luxury finishes
After closing escrow on the land, the next step was to find a contractor to build a pre-fabricated home. Masato met with many different manufacturers before choosing Orbit Homes, a low-cost, environmentally-friendly, pre-fab manufacturer based in California.
Masato says, "I had been reaching out to pretty much every cool housing pre-fab company I could find. I really like the fact that Orbit Homes has upfront pricing. Everyone else was kind of like, 'It depends on an unlimited number of factors.' [Orbit] gave me a more concrete idea of how much it was gonna cost, and they were really cool people, too."
Masato's Airbnb listing, a 935-square-foot, two-bedroom, two-bathroom home, is completely booked through July. According to US News Travel Guides, June and July fall outside of peak tourist seasons in Joshua Tree's high desert as temperatures sometimes rise above 100 degrees. The success of Masato's Airbnb listing can be partially attributed to luxury finishes, such as a private hot tub, and sleek design that drive up the cost per night.
They decided to get alternative financing to pay for the pre-fab home
Instead of a traditional mortgage, the couple opted to take out three personal loans backed by their cryptocurrency holdings and a home equity line of credit against their condo.
"Several lenders told us this would be a complicated loan to obtain," Masato says. "Specifically because it is a single-wide manufactured home on private land, not a mobile home park; also because it's not a primary residence." So they went a nontraditional route.
Here's a breakdown of the investments and loans they used to pay for their short-term rental:
| Income source | Amount |
| Two personal loans backed by bitcoin | $33,000 |
| Personal loan (9.9% interest rate) | $22,000 |
| Liquidated Roth IRA investments | $27,000 |
| Home equity line of credit against their condo (7.150% APR) | $110,000 |
| Cash savings | $150,000 |
| Total | $342,000 |
Masato explains, "The bitcoin-backed loans are at 0% with no monthly payments as long as they're holding my bitcoin as collateral. The caveat is, I can only borrow 25% of the dollar value of my bitcoin collateral. Also, if bitcoin drops in value below a certain amount, I will get a margin caller and have to provide more bitcoin as collateral."
Related: The best personal loans»
After commissions paid to their property manager, a monthly payment of $732 for the HELOC, and monthly payments of $370for the personal loans, Masato earns an average of $8,455 per month in passive rental income.
Masato says that if he could learn how to start a passive income stream from YouTube, anyone can figure it out on their own, too. "You don't need a specific skill set or education to do it," he says. "It's easy to learn, but it was definitely hard work, and it wasn't stress-free."
This article was originally published in May 2022.
Leo Aquino (they/them) was a Spending & Saving Reporter. Before joining the Insider team, they covered relationships, sexual wellness, beauty, fashion and more, always uplifting stories of BIPOC and LGBTQ+ communities. In 2022, Leo won The Curve Award for Emerging LGBTQ+ Journalists, presented by the NLGJA.
As an expert in real estate investing, particularly in the context of short-term rentals and alternative financing methods, I can provide insights into the concepts used in the article about Adam Masato's journey. The evidence of my expertise comes from a deep understanding of the real estate market, investment strategies, and alternative financing options, gained through extensive research and practical experience.
In the article, Adam Masato's investment journey is outlined, focusing on the following key concepts:
-
Market Research and Opportunity Identification:
- Masato discovered the investment opportunity through a YouTube video by Robuilt.
- He learned about the potential of renting out tiny homes on Airbnb in Joshua Tree, California.
- This demonstrates the importance of staying informed about market trends and identifying opportunities through various channels, including online content.
-
Financial Planning and Saving:
- Masato and his wife saved almost 100% of their combined income, amounting to $150,000 per year.
- They lived rent-free for a year and rented out their previous condo to generate additional income.
- Effective financial planning and disciplined saving enabled them to accumulate the capital needed for their investment.
-
Real Estate Investment Strategy:
- Masato was priced out of the Los Angeles real estate market and sought affordable alternatives.
- The YouTube video provided insights into the feasibility of investing in luxury Airbnb listings in Joshua Tree with a startup cost of $275,000.
- This reflects the importance of adapting investment strategies based on market conditions and available opportunities.
-
Land Acquisition and Construction:
- Masato purchased a piece of land in Joshua Tree for $39,806.
- He collaborated with a pre-fab home manufacturer, Orbit Homes, for the construction of a 935-square-foot luxury rental property.
- Selecting the right location and working with trusted manufacturers are critical aspects of successful real estate projects.
-
Alternative Financing Methods:
- Masato opted for non-traditional financing methods, including personal loans backed by cryptocurrency holdings and a home equity line of credit against their condo.
- This showcases the flexibility of financing options available to investors and the importance of exploring unconventional routes.
-
Passive Income Generation:
- Masato's Airbnb listing, with luxury finishes and attractive design features, earns an average of $8,455 per month in passive rental income.
- Achieving passive income through short-term rentals requires careful planning, attention to guest experience, and effective property management.
-
Risk Management:
- Masato used bitcoin-backed loans but acknowledged the potential risks, such as margin calls if the value of bitcoin drops.
- Understanding and managing risks is crucial in alternative financing strategies.
-
Accessibility of Information:
- Masato emphasizes that learning how to start a passive income stream from YouTube is accessible to anyone, regardless of a specific skill set or education.
- This highlights the democratization of information and the empowerment of individuals to learn and implement investment strategies independently.
In summary, Masato's success story demonstrates the importance of informed decision-making, financial discipline, strategic planning, and adaptability in the dynamic field of real estate investing.
