Covering Her Mortgage in ONE Day with THIS

Ashley:
What if you could pay your mortgage payment in a single day without house hacking? Today’s guest has a fascinating and unconventional way to use their primary residence as an investment without house hacking. We’re going to dive in into this unlocked potential of generating income with today’s guest, Nicole, we’re going to be breaking down the steps you can take to also implement this strategy. This is the Real Estate Rookie podcast. I’m Ashley Kehr and I’m here with Tony j Robinson.

Tony:
And welcome to the podcast where every week, three times a week, we bring you the inspiration motivation in stories you need to hear to kickstart your investing journey. And we are here today in person with none other than Nicole Lulinski. While Nicole, thanks for hanging out with us today.

Nicole:
Thank you so much for having

Ashley:
Me. So Nicole, let’s start from the beginning. You have your primary residence. When you purchased this property, did you even think of real estate investing? And tell us a little bit of what your life looked like at that time.

Nicole:
So the house we live in now is our first home that we bought and we were living in LA wanting to buy a home and looking for ways that we could make money off the home. I am a daughter of immigrants from Argentina. I was born Argentina. My parents moved to Miami when I was five, and my parents have been in the real estate business since, just before 2007. So they really benefited from the crash, mostly because they didn’t have any assets. And so I always saw real estate as an investment, but growing up with the immigrant mentality and being a little nervous about making such a big investment when we were looking for homes, we were definitely looking for something with an A DU or something that we might be able to Airbnb. The other option was looking for a duplex or a building that we could own with several tenants. None of that really worked out for us. I was nervous or wasn’t super comfortable with having an A DU and someone living at our house. I didn’t really want to be a landlord living in a building. I really wanted a home. And when we were looking at properties, we stumbled upon the property we live in now that was being used for production. I had a friend who was doing the same thing, renting out her home for productions, and we just saw the opportunity and we went for it.

Tony:
That is such an LA thing. I never even would’ve thought to buy a house. And so just before we even get into the nitty gritty of how you found the property, what do you mean when you say production? So these are production companies for tv, for film that are paying you to use your space for whatever it is that they’re recording or just break the concept down for us a little bit.

Nicole:
Exactly. So we list our property on TER and Peerspace, which I would say is the Airbnb for filming and production companies and location reps or even internal brand teams will find our property on Gigster or Peerspace and reach out to us to rent our home. So it can be anything from a few people coming in and using our furniture and filming in our home. Or it can be all the way up to a 50, 60 person commercial where they will dress the whole house in their furniture, in their style and shoot at our place.

Ashley:
Wow. So Kathy Feki, who is one of the hosts of the BiggerPockets on the Market podcast, I believe she does this to her house too in Malibu where they have production companies that come and rent it out. But I’ve never really talked to her in depth of how somebody even finds them to come and shoot there too. So you found this property. How did you know that they were already having productions done there? Was that included in the listing?

Nicole:
That was included in the listing, but I’m a creative director and strategists and my husband collects vintage furniture and textiles. One of the things that he does. And we love vintage homes and when we walked in the house, we knew that this would be a perfect place to shoot. It has a huge front room with multiple windows. It is kind of a U-shaped that makes the flow work really well. And we also had a bit of an advantage because this home was preserved really in its mid-century style. So Rosewood paneling, this gorgeous glass fluted details original windows, which isn’t great for insulation but great for great to film. The previous owners of the home were a production designer and a landscape architect.
And so they did a really great job of preserving the home. And they also shot a Netflix series there. They didn’t live in the home full time, but they definitely did advertise that the home was used on the Netflix series. And we immediately started thinking, okay, this might be that perfect opportunity for us where we want to live in the house full time. I don’t really want to Airbnb and have strangers in my home unsupervised. This felt like a really good opportunity and that happened. We bought the home about two and a half years ago and I’m happy to report it. It has been wonderful.

Ashley:
So when you were looking at this property, did you have any kind of numbers to run? So for example, did you know how much the production companies were paying? Could you estimate or forecast what you’d be making or was it a wing it?

Nicole:
No, absolutely not. We could afford the home, but we definitely did. Were not able to calculate any numbers or future earnings. One of the reasons why is that this is an unpredictable
Source of income. Sometimes we will get a few shoots in a month, sometimes we won’t get any for two months, and so we average in about one shoot every six weeks. But I knew from talking to friends that are producers and people, my friend who rents it out her house, that this is lucrative if it’s done properly. So we were feeling optimistic but unsure and right when we closed on the property but weren’t quite living in it yet, we listed it on Peerspace and Gigster for a little bit of confidence to see who would reach out if we can have some things happening. And immediately we got a call from a producer of a music video from an artist on Beyonce’s label. I’m under NDI so can’t do Metaphor. They did a shoot before we even moved in. And that was so validating to have a renowned director come into our home and say, this is beautiful. We love it. There’s so much here to already work with. And each director, each production team is going to make the home their own in some way. But it has incredible bones and has that vintage timeless look. And so we had an advantage of course coming from the creative space that,

Ashley:
Yeah. So was there a lot of things that you guys have done to the home to even make it a better space for these production companies?

Nicole:
No, not permanent thing, but we definitely, the only thing that we changed was out of necessity. The kitchen, we have this very beautiful blue kitchen, had fluorescent lights and in the middle of the night one fell and broke. You could tell it hadn’t been renovated in decades and so we had to fix that. But mostly it’s just refurbishing and making sure we are preserving this beautiful house built in the 1950s by an architectural professor at USC. So yeah, we haven’t done much. One thing we’ve done is just mindset shifting because you have to be really comfortable with people coming to your home.

Ashley:
Yeah, I was just kind of wondering, so do you guys go somewhere? Are you there when this happens? Are they using it for multiple days where you can’t sleep there? What’s that kind of like?

Nicole:
I’ll walk you through everything. Well, first of all, we live in the house full time and we’re a big part of, we’re a the neighborhood. Our next door neighbors have become our best friends. Our front neighbor is this wonderful woman. We live there full time, but we’re also very cautious and considerate of what kinds of projects we accept

Speaker 4:
Because

Nicole:
At the end of the day, a director or a production team will come in for a scout before to scout the house and see if it’s right for their project. So we also get to scout them and see if they’re right for the project. When it comes to choosing projects, we’re extremely picky about who we’re letting into the space. A lot of it has to do with what kind of production it is and what kind of a footprint it will have on the neighborhood. Some of it is there’s a difference between a one day 10 hour production with six people coming in that will pay for our utilities for the month and a 30 to 50 person shoot that they’re doing where there’s trucks on the street and there’s no parking on our street for neighbors. And that does cause it’s an inconvenience for people.

Ashley:
We’ll be right back after this break with more from Nicole. All.

Tony:
Alright guys, welcome back where we are joined by Nicole. So I guess a couple follow-up questions there. I have so many questions swirling through my mind here, but I’ll try and piecemeal on the regulation side. So if I get a short-term rental, I have to apply for a permit, I have to, there’s inspections, they do all my property on an annual basis, have to pay certain fees. Is there anything like that to allow your property to be used in a commercial setting like this?

Nicole:
Absolutely. So we don’t do a production without a permit. It’s illegal in la. And so we work with, and the production teams work with an incredible nonprofit called Film LA that facilitates these permits with the city

Ashley:
Of la. So do you even have to do anything or they bring the permit with them? The production company,

Nicole:
The producer will file a permit
And that permit is facilitated by Film LA. And every one of our neighbors directly next to us will receive a little notice that says, Hey, they’re filming in the area, this is what they’re filming, et cetera, et cetera. So everything is very much by the book. In that case, film LA makes sure that everybody has what they need to make sure that filming goes off without a hitch. And so we rely on them a lot to be able to speak to our neighbors or receive complaints from our neighbors. Especially if a neighbor doesn’t feel comfortable coming to us, we encourage them to call Film la. And Film LA has made changes in terms of a production. So for example, a production company wanted to film on Halloween. And because our neighborhood is a big trick or treat destination, they asked them if the production, they made the production stop at 4:00 PM

Ashley:
To make sure oh, before people’s kids were out and stuff.

Nicole:
So between us and Film LA, we will meet every single one of our neighbors requests or complaints if they’re reasonable. And sometimes they’re not reasonable and sometimes we have one or two neighbors who don’t want filming at all, but that’s when you live in LA proper, it’s not going to happen. We’ve also are available during the shoot, so people who rent out their house for shoots, many times we’ll get a locations rep to make sure to be in the house and they leave because I’m in production, because I care so much about our neighbors and to make sure that nothing goes wrong, I’m on the property the entire time. So I will hire a locations rep, but we’ve converted our garage to be our studio and our workspace though will be there when the productions are happening, making sure that everything is okay, that if there’s any problems there.
The previous owners who were in our home were actually not available, so they would be in Europe or wouldn’t be around. And so we came into the home and the home didn’t have a great reputation in the neighborhood. So we’ve worked hard over the past two and a half years to make sure that we’re overly communicative, that we only rent the house once every six weeks, that our neighbors are getting compensated if necessary, and we’ll bring them in to the production. So one time, or actually many times production companies, if they need more space, will do breakfast and lunch on one of our neighbors and friend’s property maybe in their backyard. That’s

Tony:
Cool.

Ashley:
And so then they

Tony:
Get paid for that,

Nicole:
So they get paid for that. So we make sure that that’s super

Tony:
Smart to also kind of financially incentivize them to want to be a part of that process as well. And it’s kind of a win-win. So let’s talk a little bit about the actual rates that you’re charging. It’s like the first job or what do you call ’em, gigs or what’s

Nicole:
Job projects,

Tony:
Any

Nicole:
Of those.

Tony:
The first one, what did you actually charge and what was the duration of that project?

Nicole:
So for bigger projects that have more of a footprint on the neighborhood will be more expensive. So bigger projects with more of a footprint on the neighborhood and more of a footprint on our home will be more expensive. So this first project we had, which was a music video, was probably the biggest one we’ve had. Oh really? Your very first. The very first we went into it really not knowing, I had never been on a music video set before. That was one and a half days. So the first day was prep them, bringing in furniture or art, all of the things to dress the home. There’s trailers on the street and it was a big project that paid for two months of our mortgage. So we’re able to make anywhere between 4K to 15 to 16 K for a project.

Tony:
That is amazing.

Nicole:
Maybe more if it’s more days. One of the reasons we’re able to charge more is because we have a lot of vintage furniture and props and textiles, thanks to my husband who has incredible taste. And it spans the fifties, sixties, seventies, eighties, nineties. And that’s for some productions, that’s a huge line item for them to rent and bring a couch and art and all of these things. So we’re able to include that in the full package. So some productions will want to clear out the space and bring out everything on their own, but some productions are like, thank goodness you have everything we need here.

Ashley:
This is such a non-important issue, but I’m just so curious about it. It’s like, okay, if they bring in their own art, are they nailing it on your wall? And then are they leaving a permanent hole?

Nicole:
This is another reason I like to be on site the entire time is to make sure that I’m watching over this and making sure everything’s okay. They will normally not nail in new nails because our wood panels walls are decades old. They already have some nails in there, so we just use that.

Speaker 5:
But

Nicole:
There’s so many art department hacks that they do. They do command strips, they’ll hold things up. There’s a bunch of hacks that they’ll do. So we’re very protective of that and the teams are prepared. So if we say no, they have backup plans,

Ashley:
We’re going to take one more short ad break and we’ll be back after this. Let’s jump back in.

Tony:
As a short-term rental host, we have, there’s air cover through Airbnb. You can make your guest put security deposits. What is your process for mitigating? And then maybe reimbursing yourself if there is damage.

Nicole:
So I think first of all, you have to be comfortable with the fact that there will be dozens of people coming in and out of your home.
And I think it helped that we started renting our house out before we even moved in because it felt like a more flexible place when there is damage, when there has been one, we have a security deposit on every single job, but if the damage is more than the security deposit, we’re working with production companies that have insurance and that are prepared to handle that. So I’ll give you an example. We had a new balance sheet a few months ago and they scratched these vintage closet, wood walls, wood doors, and they were an incredible team. But things are going to happen. They’re moving fast. They have to get all their shots in 12 hours and sometimes scratches happen. They paid for that. And the closet wood doors look better than before because we’ve refurbished it. So when there has been damage, we’ve been able to get that paid. Sometimes when it’s through Gigster and Peerspace, they also have that same type of insurance that Airbnb has. So they make sure that we get paid for any damage and there’s been some damage, like something minor. But our neighbors, for example, one of the lighting people stepped on their flowers. And so it’s small things like that up.
And one way that we track and mitigate this is before every shoot we have a walkthrough and we take fresh pictures of everything the way that they are. And then when they leave, we do another walkthrough with the producer. And depending on what kind of shoot it is and what kind of equipment they’re bringing in, we require, okay, we need mats for the floors, we need you to cover the walls. And there’s teams and companies that do that that come in and cover the entire house with cardboard or whatever. So there are some, we had a very small team come and do reshoots for a Nike product, and that was five people. No trucks. No equipment. I’m not going to ask them to mat the floors, but when they bring in a camera dolly, that’s like a huge piece of equipment that you’re pushing on the wood floors. We’re going to need some extra protection there.

Ashley:
Now what about insurance for liability? Now, is this covered under your homeowner’s policy? Do you guys have your own extra insurance for this?

Nicole:
Yeah, so every production team we work with has their own insurance policy, but on top of that, we in our home insurance have kind of an extra policy. And I called Farmer’s Insurance shout out, and my agent Lisa, I told her what we were doing. We talked about it. She was like, oh, I’ve never done this before. And we came up with a policy that covers us that isn’t too far off from what we would’ve paid anyway.

Ashley:
So it just added a little more onto

Nicole:
Just a little more protection in case we need it. But the other thing is that no one is in our house unsupervised. And so we’re able to understand what kind of shots they’re going to get, understand what happens. We had one, we shot the master’s golf commercial for the master’s tournament in Atlanta, and the director was like, do you think we could go up on the roof and shoot some balls and hit some balls? And I’ve been on the roof many times and I said, if we bring one person and one camera, we can do it. And I’m there. So I’m actually down to take risks, especially since I come from a creative background. The shot is incredible. I’m glad they got the shot, but we protect ourselves by being able to have insurance and by being onsite the entire time, I think it helps us. But I think it also helps the production teams and the directors too, because if I just had a site rep there and I left for the day, he would’ve said no. And of course, because I think logically you’re like, okay, you’re not going to negotiate on the,
But I want them to come to our house and have an incredible experience and get everything that they need. And so part of that is being able to push the envelope a little bit and take those risks

Ashley:
Real quick. What does it cost to have a site rep come in?

Nicole:
So a site rep will cost about between 500 to $700 a day. And so the site rep, the cleaning fees and the site rep and the cleaning fees are not part of the rate. And then there’s an hourly rate that fluctuates depending on how many people there are, what the footprint is, how many trucks are on the street, if any. And yeah, it works that way.

Tony:
I want to dig into the rates a little bit, but I didn’t even think about the cleaning. So after each shoot you out of your own pocket then have to pay someone to come through, or is that something you’re also passing on to the production team?

Nicole:
We’re passing that on to the production team.

Tony:
And that’s in addition to whatever fee for renting the space?

Nicole:
100%.

Tony:
Interesting.

Nicole:
Yeah, so it’s a cleaning fee that could be between 300 to 500 depending on what it looks like. The cleaning fees and the site rep fees are on top of the hourly rates. And the hourly rates can be anything from two 50 an hour to 600 an hour, maybe more depending on what the nature of the shoot is.

Tony:
And then what are you doing to gauge within that range? How do you know have a calculator or a rubric that you’re using or you just kind of by feel?

Nicole:
At the beginning it was by feel. You have to be able to, one, ask a lot of questions of the producers and the production company. And I definitely had less information at the beginning than I have now, but now we have two and a half years of historical data,
But a lot, we have to take a lot of things into account here. One the industry, and there were a couple months last year and this year where the strike really affected production. And so we take that into consideration. We take into consideration if it’s a really interesting project and we really want to work on it, or we love the director and love what they’re trying to shoot. We also take into consideration our lives. We live there full time, we also work there and we’ve vertically really integrated our home and our business. So our business is called Studio Practica, and we are a strategic and creative firm that brings together brand strategy and management, consultant and operations. And so we’ll do offsites and retreats in our space while also shoot our client’s products in that space. And so it has to match up to our schedule and our calendar. And so all of those things we take into account to determine how much we should charge. But a lot of it comes down to how much of a burden is this going to be on us and on the neighborhood? And we’re lucky that some projects we’re able to make a lot more. And so we try to balance that out with the requests that we get. But we definitely have developed really close relationships with producers and with location managers that have helped us get to pricing and can tell us what the industry average is around all of these.

Ashley:
So when somebody calls you and say, I want to look at your space, what’s kind of the steps that you would take? Say you’ve never worked with them before. How does that whole process work?

Nicole:
I would say 90% of the people that approach us, I don’t know who they are and no experience with them.

Ashley:
Are they getting your information from Gigster? Is it referrals or,

Nicole:
I think the majority is still Gigster and Peer Space, but a few of them are location managers that have shot in our space in the last two years. Some creative directors or directors that I know that have referred us at our home to the production company, but most of them are just cold outreach on these platforms. And we chat a few messages back and forth. And the first question that really determines how we move forward is, are you available this date?

Tony:
Lemme just ask, right. So there are different ways that some of these platforms work. Like an Airbnb, the guest is searching for a place that matches their location and their dates. There’s sites like Furnish Finder in the midterm rental space that acts as more of almost like a marketplace where you list and then you can reach out to people who are maybe interested in your property. How does peer space and GTA work? Is it more the potential booker is the one that’s doing the outreach, or can you see the pool of potential people and reach out to them as well?

Nicole:
It works very similarly to Airbnb where people are looking for our space with a few keywords, wood paneled walls, mid-century vibe, beautiful garden in la. So in terms of convenience for production and for producers, being in LA is a huge advantage because that’s where people live. They don’t have to stay overnight and it’s an easier process for them if they’re in la. So they’re searching for a few miles from where they are in LA proper. There’s some things that we say no to right off the bat, student films that don’t pay well that we just don’t have the time to

Speaker 5:
Do.

Nicole:
If we didn’t have to maybe worry about the neighborhood and we were able to do more shoots, I would love to support student films, but we only have one shot a month to really make it worthwhile for us. No two adult films.

Tony:
That’s fair. That’s fair.

Nicole:
And some other things that come up that wouldn’t be right for us. But once they come in for the scout, we get to meet them. They’re doing scouts all the time, and there we determine, okay, is this right for us? But also they determine if this is the right space

Ashley:
For them. Is that when you go ahead and submit your proposal or is that before the Scout?

Nicole:
No, so before the Scout, nothing really happens. And also after the scout could be that they found another property, but if they love the property and they think it’s great for their project and we liked them when they came to Scout, then we move forward and start negotiating. And that’s when we get so much more of that information of how many trucks are you bringing, how many people are you bringing, how many clients are you bringing? So I think I’ve learned to work really well with producers and get all of the information that we need to make sure that this is a good project. We negotiate with the producers, they drive a hard bargain. I drive a hard bargain and we negotiate and we see sometimes they negotiate and sometimes it helps that we have a lot of props and furniture. Sometimes if they’re really in a bind, I’ll be a site rep for the day. And so we try to work with them and see what they can do. Sometimes they’re like, we will stay and clean up. I’m like, okay, I’ll hold you to it if that project. So we want to be flexible and work with them when we can. We’d love to make it work, but if we don’t, there’s other requests and projects coming in. Yeah.

Tony:
A few follow up questions there. So first, are they paying you directly or are they paying you through the platform?

Nicole:
Both. So sometimes they pay me through the platform if they find me on the platform, but if they find me in any of the other ways, they pay me separately.

Tony:
And then in terms of the short-term rental space, it’s the booking window. So from the time that they actually make their reservation until they arrive, what’s the typical heads up that you’re getting from these production crews?

Nicole:
Phil LA needs at least three days in advance to process the permit to work with LAPD to put up signs and to send the notices to our neighbors. So it can’t be the day before, but it’s usually not more than a week or 10 days before the show show. It’s

Tony:
Usually pretty quick.

Nicole:
It’s very quick.

Tony:
I don’t know why In my brain I thought it would be like

Nicole:
Three

Tony:
Months or

Ashley:
Something like that. Even planning to come in and scout and when you’re actually going to do it. It happens.

Nicole:
Yeah, it happens. But

Ashley:
This is also pretty labor intensive or time intensive for you as the homeowner. And you’re taking the calls, you’re bringing in the leads, you’re answering the questions, you’re setting up the date for them to come and do the home visit. You’re negotiating with them, you’re creating the proposal, and then you’re there on site. So how much time do you say you spend per booking for everything that happens beforehand?

Nicole:
I will say that’s unique. So there are location agencies that will drop off a little letter at houses that they see some curb appeal, and they will do that all for you at a 30 to 40% cost. But I like to have more control over the situation. And so I would say per booking, it’s about between writing up the contract and negotiating, talking, scouting between five to six hours,

Ashley:
Which is worth keeping that 30% in your pocket.

Nicole:
Totally. And we have now helped other people do that, not at that 30%. That’s definitely, it’s a huge number. But yeah, if anybody

Ashley:
Is, so now you’re co-hosting just like someone with a short-term rental over somebody else doing it in the

Nicole:
I am available for coaching and consulting on this particular in particular, it’s a really rewarding and creative experience.

Speaker 5:
It’s

Nicole:
Also wonderful to have people in your home who see the beauty and to, and are also rearranging things in fresh and interesting ways. Sometimes we leave it like that. We’re like, oh, this is super cool. This looks great.

Tony:
Rolling. Let me ask one follow-up question to that piece. Obviously you bought this as your primary residence, but do you think, Nicole, that someone could do this strictly as an investment property, someone buys a property with the strict goal of renting it out, is there enough margin there? Is this something that’s scalable aside from just doing it as a quasi house hack?

Nicole:
Oh, a hundred percent. I think that would be my next investment is to buy a home and to be able to do this multiple times a month. We get more offers than we can actually do because we live there. And so I definitely think this is an incredible opportunity for people there, especially in emerging markets, not just la, but New York and Miami and Toronto and Atlanta. The thing that you really have to think about is the space and the considerations and making sure you’re choosing something timeless and something that can’t be really recreated in a sound stage.
And so for example, if we didn’t live in a close knit neighborhood and you couldn’t really, maybe we lived on a hill somewhere and you couldn’t really tell that we had a production, we would do it many more times than we’re doing it now. But my hope is to grow this tiny empire and to have a few houses that we’re doing for production. And I would even go a little wilder with it. And right now the furniture and styling of our house is, I think a balance between what we love and also what we think will sell. But I would make themed rooms and keep updating it based on where the trends and tastes are going. I think someone who is looking for a home and opportunity, it’s hard to describe exactly what you need because you really want a home with a lot of taste. But yeah, having this as a property, as just an investment property that you’re not living in, you have to consider the neighborhood. You have to consider the home and your neighbors, but 100% would be an incredible opportunity in any emerging market.

Ashley:
My last question to wrap up here is, are you cash flowing on the property? Are you able to completely cover your mortgage on this property?

Nicole:
So I would say we’re about 80%.

Ashley:
Yeah. That’s

Nicole:
Awesome. Thank you. And the reason why is we’ve made a lot of investments to the home and furniture. I know we’ve updated the electrical, we’ve been able to do landscaping the way that we want to, so we’re probably about at 80% on a yearly average.

Speaker 5:
The

Nicole:
Thing is, it’s not consistent, so it’ll be every six weeks, stuff like that. But yeah, one of our goals was to be able to live in a home that we love and be able to make a little bit of money coming in. And so this has far exceeded my expectations and what this could be. And

Tony:
Yeah, 80% of your living expense in Southern California is a pretty big deal,

Ashley:
And being able to do all those improvements to the property too. Well, thank you so much for joining us today and for coming in person to record with us. Where can everyone reach out to you and find out more information about you?

Nicole:
Well, you can follow me on Instagram, Nick Lily, we, or you can, sorry. You can follow me on Instagram at nick lily weil, or you can work directly with me studio practica.com.

Ashley:
Yeah,

Nicole:
Thank you so much for having me.

Ashley:
Thank you. This

Nicole:
Was such a wonderful conversation.

Ashley:
Thank you. This was so interesting. Definitely something very different than we’ve had before. So thank you so much for sharing your story and your experience with us and the rookie listeners. No, you’re so welcome.

Nicole:
Thank you.

Ashley:
I am Ashley Care, and he’s Tony j Robinson. Thank you so much for listening or watching this episode of Real Estate Rookie.