Cold open

SPEAKER_00 0:00

Welcome to Live Let Thrive, a podcast about the Airbnb live, the share economy, and everything in between. Here are your hosts, Micah and Steve.

SPEAKER_02 0:11

Hello, hello, hello.

SPEAKER_03 0:13

And welcome back to another exciting episode of Live Let Roy.

SPEAKER_04 0:21

What is up, Micah, man? I'm chilling, Steve. But yeah, I'm chilling. I'm doing good. How about you still?

SPEAKER_02 0:30

Every day's a beautiful day, man. We're above the dirt. That's all that matters. I am doing pretty good. Federico's been in town, so we've been setting up a couple units. And um, yeah, man, he's a he's 100 miles an hour, that guy, so I have to keep up. He's like seven foot tall, so it takes long strides. I gotta track him down. Um we're we have a special guest today on this episode 158 of your favorite Airbnb R Airbnb R Airbnb, VRBO, TuroLyft, all that stuff, share economy podcast in the world. And we have a special guest, and his name is Kevin Knight. And I have a little bio on Kevin. He was uh nice enough to write me. Kevin began his career in the vacation rental industry in 2014, serving 11 years in the Marine Corps. Thank in the Marine Corps. Thank you for your service, Kevin. Uh Kevin worked for Vecasa and Turnkey Vacation Rentals from

Kevin Knight's background - 11 years Marine Corps, Vacasa, Turnkey, then Patriot Vacation Rentals

SPEAKER_02 1:27

2014 to 2019 before launching a small consulting business working directly with homeowners. In July 2020, Kevin launched Patriot Vacation Rentals in Big Bear Lake, California and continues consulting for a small group of clients. Welcome, Kevin. Thank you. Thank you. Pleasure to be here. Honored to be here. I have one question out of the gate because you mentioned Vicasa on there, right? And and and my and a buddy of mine was asking about South Padre Island, and um, you know, he's never gone. He wanted to go check it out in April. So I said, Yeah, check out Airbnb. There's some good ones, I'll send you some good ones. He goes, Man, you know, these these are really nice, but man,

Vacasa's direct-booking fees vs Airbnb - saving guests hundreds

SPEAKER_02 2:09

those fees. I mean, there's so many fees on the Airbnb site. But I he goes, he I I went uh I looked at one that was being run by Vicasa and I went to the Vicasa page and it was way cheaper, man. I don't know. Do they get away with not charge not charging the guest all those fees, or what happens?

SPEAKER_01 2:26

Yeah, I mean I think that's part of it. I know they do charge some booking fees um to the guest, but I do think that they they're offering kind of reduced fees through direct bookings. Okay. And so I don't know if it's market specific or if it's across the whole company, but I know that they're always testing out, you know, different ways to increase bookings.

SPEAKER_02 2:46

Okay, because yeah, man, it was gonna save them like a couple hundred bucks booking through Vicasa as opposed to the Airbnb site. It was crazy.

SPEAKER_01 2:54

Unplanned Vicasa plug right at the gate.

SPEAKER_02 2:57

But he took it a step further and found uh the the owner owner, so anyway, he cut them all out, you know. I'm saying, oh right, yeah, hey, yeah. But anyways, um, yeah, uh one more one more thing on Vecasa. Is that is that a site that they just they pretty much you know rent your place from you and then they furnish it and they rent it out, and so they leave you out of, I mean, you just you just get a cut or what?

SPEAKER_01 3:20

So as an owner, you're coming to them typically with a fully furnished um vacation rental. Most of their homes have been operating as rentals previously, and then they'll take over for the other management company. Um, but they they aren't usually furnishing them, they're doing a a revenue share commission split model with the owners.

SPEAKER_02 3:42

Okay. So there's yeah, they're just managing it for you.

SPEAKER_01 3:44

Yeah, exactly. Yep. Cool. And they do offer services for like interior design and some other additional services that I don't know too much about, but I know that they do offer um a suite of services for the homeowners.

SPEAKER_02 3:58

Because they're big in Padre. I see their signs everywhere. I see Vecasa everywhere in Padre. Oh yeah, they're huge out there for sure.

SPEAKER_04 4:06

No, now Vaikasa, do they mainly target like the vacation rental markets or like are they in like Dallas, Houston, places like that?

SPEAKER_01 4:13

I think that they're they really do a lot better in the vacation rental markets. Um, I think operationally, as you know, it's more challenging in uh more urban markets, I think. Um so I think that's where their strong suit is, but they are in a lot of larger markets. I mean, I think they're in a few hundred markets in a in the continental US alone. So they have I think 26,000 properties or something under management. Huge. Wow. A lot of acquisitions.

SPEAKER_04 4:45

So, what did you learn from Bayacasa to implement into your own business? And could you go into what your business is and what you do out in Big Bear Lake?

SPEAKER_01 4:55

Yeah, definitely. So I, you know, I had the early on in my vacation rental career, I had the opportunity to work with some of the larger companies that were just coming onto the scene, like Vicasa and then turnkey vacation rentals also. Um, and so I got to see those companies go through a lot of growth and um working with homeowners directly. I got to see how that relationship worked. And um, you know, I was kind of in the middle of all the friction of this exponential growth into some of these markets, and I took a lot from that starting my own company. Um, I think the biggest thing was relationship building and you know, really setting clear expectations with the customers, uh, both the guest and the owner. Um, as a management company, you have a lot of different customers that you're um uh needing to please, all with different expectations, some that are contradicting, and you're kind of in the middle trying to play that role of pleasing everybody, but also at the same time maintaining integrity to the clients and um following through with the expectation. So I think that was a big part of it, um, just learning how how it all kind of comes together. Um, and then once I realized the relationship is kind of at the heart of the at the heart of it, that's when I was comfortable on my own and um have been going ever since.

SPEAKER_04 6:22

Wow.

Management commission split model in Big Bear Lake, expanding to Gatlinburg and Florida

SPEAKER_04 6:23

And what techniques did you like uh do you do mainly uh managing, arbitraging, owning? How do you run your business model?

SPEAKER_01 6:30

So we right now we're all um uh management commission split. So we're we're you know kind of the traditional vacation rental management company only in Big Bear Lake currently. But as we as we grow and move into some other markets, you know, we'll look at diversifying um across some of the different management styles. So I'd like to put pick up some arbitrage units, um, and then buying, of course, also um, you know, is in the is in the works. So I think that's the key is being diversified. Um, you know, so that's what I'm heading for. Okay.

SPEAKER_02 7:09

Oh, go ahead, Steve. No, I think that's a great way to start is start managing other people's units and you know get to know all the ins and outs of every side of it, and then and then you know start getting some of your own. I think that's like the perfect way to start, you know, instead of going and getting one and and not being able to pay rent, you know, if you're if you arbitrage it poorly or or if you buy one and you don't know what you're doing, you lose so much money, but you start off managing other people's and learn the ropes and then move into getting your own. That's that's a cool way to start.

SPEAKER_01 7:35

Yeah, and for me, I took it, you know, I started with a company that was really figuring it out and kind of leading the way with a lot of the management strategies. So I was piggybacking off of them to you know learn the industry, and then I was able to take it a step further uh you know into the next phases. So I, you know, that's important. I think being an operator is key. The first homes I managed, I was I stocked them with toilet paper, I cleaned them, I photographed them, I wrote the copywriting for them. Um a lot of it changed over the years as the company grew, but you know, I think getting experience in all the different aspects of the the management side, that's been, you know, I think the key.

SPEAKER_02 8:20

So has Vicasa been around for a while?

SPEAKER_01 8:23

How did they get their start? I think they started in two I want to say 2009, um, I believe is when they were founded. I think that's right. Uh yeah, 2009.

SPEAKER_02 8:36

So that's close to what Airbnb started, right?

SPEAKER_01 8:39

Yeah, interesting. Yeah, Vicasa, yeah, right around the same time. So yeah, they were unheard of. They started up in the Pacific Northwest. Um, you know, Eric, who founded Vicasa, Eric and Cliff Johnson, they were the founder and co-founder. They first saw the revenue management gap. They saw that management companies were listing one price for the you know, all the weekdays for the entire year, and then one weekend rate. And so Eric had a background kind of in that. And so he launched his first unit, implemented dynamic pricing, and then you know, they kind of took off from there and are still growing and and moving along. So wow.

SPEAKER_04 9:25

Okay, and you said you were gonna thinking about picking up some arbitrages. What markets are you looking at targeting? Are you staying in that big bear area or are you looking around?

SPEAKER_01 9:33

Our arbitrage, I don't think, would do too well in in Big Bear. I think you know, uh a hybrid of that would I I like working with the single family homes, larger homes. That's kind of you know my sweet spot, I think, from an ADR standpoint, and just I like working with the homes rather than a one-bedroom apartment. Um, so I like the hybrid where you're renting a home from an owner at a fixed monthly rent, and then you know, then you're re-renting it. So kind of the arbitrage model, but at the single family home level. Um, I think that's an interesting model that I could see in the destination market like Big Bear. But for urban, I mean, I'm looking at you know, San Diego County, uh, maybe some Orange County areas, depending on regulatory Newport Beach. Um, you know, there's some areas that I think could do well if you have the right relationships, you know, with the operations people.

SPEAKER_04 10:28

Yeah, Newport's hot. Uh be careful with San Diego, though. They just slash 70% of their rentals with regulation.

SPEAKER_01 10:35

So yeah, I heard. I was there actually when they banned them initially back in like 2000, I think it was 2016 or 17, maybe for

San Diego slashed 70% of rentals - regulatory volatility in vacation markets

SPEAKER_01 10:45

a period. They banned them, went through court, I think there were some lawsuits and then reinstated rentals. So there's always you know volatility, especially in San Diego, man. How how about for you guys? How's the regulation landscape?

SPEAKER_03 11:02

Well, stees machine now, I'll talk about that. Yeah, yeah.

SPEAKER_02 11:06

I um I was I was renting out houses actually, and my own my own houses, and one was in a town called Hearst, a little bitty town called Hearst. And the other one was in Arlington, which is where the Cowboys Stadium is and all that, and all those stadiums, Texas Rangers. And so that one was, I mean, they were both making me good money, but that one by the stadiums was making me like I was making like four grand a month, you know, around three or four grand a month, maybe sometimes five. It was just crazy. And then the the city of Arlington, I get this is how me and Micah we looked at the timeline. And I sent Micah too, I was sending them messages of like, uh-oh. I saw like I was reading business articles, and I was like, it's like the billionaires are starting to build hotels in Arlington, and there was no hotels in Arlington,

Arlington banned Airbnb after Jerry Jones built hotels - Dallas still wide open

SPEAKER_02 11:47

hardly like a couple. And so they they didn't mind Airbnb. But then I was like, they're the writing's on the wall. Jerry Jones and his boys are building hotels, and he's then next thing you know, they they banned Airbnb. It's it's the timing was strange, you know. And so, so yeah, so they got shut down. We got shut down in Arlington and um and Hearst. And I I do um I do Dallas is is still knock on wood. Dallas is still Airbnb friendly, and um, and so we I we have like um what five five of them over there, and one at Fort Worth, which is you know more long-term rental. So, so yeah, it's just hit or miss over here because Fort Worth's banned. Dallas is all Dallas is wide open right now, for right now. And then there's just little cities here and there that are banned, and it's just a mix, it's a mix over here.

SPEAKER_04 12:35

Yeah, and Dallas just announced after I've been hearing Rumlins about Dallas implementing, but I mean, we don't own anything over there, it's all arbitrage, so I think we should be good, but yeah, that's about it. I mean, that uh like there, but there's a lot of short-term rental friendly places in the DFW, like Plano, McKinney. And then once you go outside of that, you have like Conroe, Houston, uh those areas, those are like short-term rental friendly areas. Um but yeah, it it's Texas has been a mixed bag. Like in Austin, it's just like a strict, it's very strict down there.

SPEAKER_01 13:09

So interesting.

SPEAKER_02 13:11

Yeah, yeah. So so I guess, I guess um might have to make sense as like a long-term 30 days or more rental. And um, and I just see Airbnb as icing on the cake if we can do it. But if we do get shut down again, at least I can do 30 days or more. You know, pretty much everywhere in the country allows knock on wood again. Hopefully they don't ban that next. But everywhere in the country allows, you know, 30 days or more anywhere, anywhere you go. So they have to make sense in in that regard. Travel nurses, traveling professionals, stuff like that. Definitely.

SPEAKER_04 13:42

So so with Big Bear Lake, because I have a few uh timeshares I rent out out there, with it being so with it being like is it pretty it's pretty seasonal, right?

SPEAKER_01 13:50

Or up until COVID it it was, but we've been at very high occupancy since July. I mean, I think it's one of the hottest markets in the country. Airbnb released that report uh a few weeks back, and Big Bear was top five um for markets. So we've been, I mean, December we were at 98%, which usually were, you know, it's usually full occupancy. Um, you know, November, December, and January are usually maxed out, but then we've been at 80 to 90 through February, March we're at about 80%. So we're pacing pretty well for April. Um, but you know, I think that people are being forced to kind of rediscover their own backyard as far as drive-to markets, and so hopefully all the operators are giving them a good experience and they'll keep coming back, you know. So it could change. Um, we'll see though, but it's hot right now. And it's supposed to snow six to twelve inches tonight.

unknown 14:52

Oh really?

SPEAKER_04 14:55

Oh, yes, Big Bear. You're right.

SPEAKER_01 14:56

Ooh, yep. So that'll be good for everyone, all the owners and guests.

SPEAKER_02 15:03

No, they're there to see snow, huh? Oh, yeah. Yeah, we we just had our feel of that stuff. We don't we don't want to see it for a long time. Uh right, it shut down our whole state.

SPEAKER_01 15:14

Man, glad you guys are safe, man.

SPEAKER_02 15:16

It's yeah, it was terrible. So the other the other company you worked for was Turnkey. Uh, explain what they are.

SPEAKER_01 15:23

Yeah, Turnkey is based out of Austin, actually. Oh, nice. The Turnkey vacation rentals. They manage, I want to say, probably close to 10,000 homes by now. But you know, I'd say they're you know, like Ficasa, larger venture-backed. Ficasa's raised, I think, 525 million. Um, Turnkey, I think, is raised uh under 100 million, but they're up there as well. So they launched a little bit later, different, two separate, two separate operating systems, if you will, as far as how they operate. So, but kind of the same type of thing. Revenue share management commission split.

SPEAKER_02 16:08

So yeah, so I seen I saw some signs with um turnkey down there in Padre 2. So I saw a lot of like a lot of ACASA, but then I saw a few certain turnkeys. So it was interesting. Um the the larger homes model, how how do you how do you go about like um designing, decorating, uh, uh, you know, to get the full potential out of a larger home for a family or whoever you're trying to host?

SPEAKER_01 16:31

Yeah, so uh when I get the home, typically they're already furnished.

Assessing homes for management - furniture condition, amenities matching occupancy, guest lens

SPEAKER_01 16:36

Um, a lot of them have been operating as rentals. So what I'll usually do is make any recommendations for anything that needs to be, you know, taken care of for wear and tear, carpet, maybe like new barbecues. We'll do an assessment of kind of the health of the home and give the owners our recommendations. And and some of them will be non-negotiable, like we must have a new kitchen table prior to being able to have guests. So we'll kind of determine what level the home needs to be at prior to the first guest arriving, and then we'll kind of help play project manager with the owner getting that taken care of. Um, like one of our homes right now is having the carpet replaced and a new um kitchen cabinets put in this week. So we're we'll block off the calendar and take care of that for the owner.

SPEAKER_02 17:27

So what thing or things do you notice, like like you said when you do an assessment, that most homeowners that are doing, you know, throwing it on Airbnb or whatever are not are doing wrong that are that is leaving a lot of money on the table, or what things could what things are the most um likely that could be changed that that could that could get them a lot more money?

SPEAKER_01 17:49

Yeah, I think looking at the condition of the furniture, I think um owners or I've seen especially in the arbitrage world that I've uh peeked into a little is they'll you know try to cut costs where they can, of course. Oftentimes it comes down to the comfort of the furniture or you know the the type of towels or sheets they're using. And I think that the the minute the value knock that you might get over time is going to hurt the average daily rate that you're capable of getting over the kind of long term for the home. So I think really looking at it from the guest standpoint, and I always recommend stay in your units before you have any guest stay in them, and really look at it from the guest perspective, um, you know, walk around barefoot, see how the floors and carpet feels, um, all of that sort of stuff. You know, I think if you look at it from the lens of a guest and really ask if would this be an inconvenience or uncomfortable to them, I think you really have to be thoughtful about, you know, and intentional about that, and it will pay off. Um, so that's a big part of it. If you have a hot tub, I think if you have an eight-occupancy house and a four-person hot tub, um, you know, like those little things, mismatched amenities. Um, if you're gonna have five bathrooms, have five hairdryers, you know. I think going the extra mile so the guests uh know that you're looking after their experience and not just looking after a dollar sign, I think in the that that's gonna be that's gonna be the winning strategy. Nice.

SPEAKER_04 19:34

Now I have a question. How many how many units are you currently managing out there in Big Bear Lake?

SPEAKER_01 19:39

So right now we have eight live with us. Um we just signed our 12th unit, um, and then we have some units going live in Florida and Tennessee over the next two months as well, um, but with the same owner from Big Bear.

SPEAKER_04 19:57

Oh, are you guys going to the Gatlinburg market?

SPEAKER_01 20:00

Yeah. So she has two, they have two units out in Gatlinburg. So we're um working on establishing the LLCs in Tennessee and in Florida.

unknown 20:11

Okay.

SPEAKER_02 20:12

Nice. That's cool. Expanding.

SPEAKER_01 20:14

It's another hot market. Yeah, Davin uh Gatlinburg for sure, the Smoky Mountains.

SPEAKER_02 20:20

Oh, yeah. We had some guests on there. Man, this is like when we first started our podcast. That first few episodes we interviewed some Smokey Mountains, um, some people that were doing some Smoky Mountains rentals, and they were killing it. I was like, and we thought it was too late to get in at that point, man. It's probably the prices have doubled or tripled by then by now.

SPEAKER_01 20:38

Yeah, I think they're gonna keep going up. I think those markets are gonna be hot for years to come, and it's whoever can provide the best experience from a management standpoint is gonna, you know, have a very healthy business.

SPEAKER_04 20:53

Yeah, now on that management side, like with you handling that many and you have them across multiple markets. Um how like how do you handle your turnovers since you're far away? How do you how do you build your team, I should say?

SPEAKER_01 21:06

Yeah, so you know, and that's a great question. And definitely the secret sauce, you know, is the on the ground

Director of operations partnership - boots on the ground, six years' experience

SPEAKER_01 21:13

team. I was fortunate enough in Big Bear that I had was able to hire a director of operations and partner with him. So he's a partner with the company in Big Bear, um, and he's been running operations up there for about six years. Um, I hired him back with Ficasa actually, um, when we first started. So I think with him, he is so familiar with uh the operational management at the individual unit level that he handles a lot of the manual day to day operational management. And then our systems that we use for operations management will kind of help with the rest. So we automate a lot of it. Um and then we have Tim up there taking care of the on the ground.

SPEAKER_02 22:06

Nice. It's important to have boots on the ground, right?

SPEAKER_01 22:08

It's it it's everything, in my opinion, especially with the larger homes. It can be so complicated that you have to have a reliable team, um, and not just you know a motivated team also. As you know, operations can be draining.

SPEAKER_02 22:25

And so and so what is uh your experience in the military taught you about operations and systems?

SPEAKER_01 22:31

You know, I think that the biggest thing is inspect what you expect. Um, I think that you if you are expecting a level of service

Military lesson: inspect what you expect - avoiding complacency in housekeeping

SPEAKER_01 22:41

or a level of satisfaction or whatever, you need to inspect that work to make sure that you're continuously getting that same level of output. And I think that when you give individuals sometimes the chance to get complacent or cut corners because they know that you're not watching them, I think that that can lead to issues when you're in an intensely like an operationally intense environment. So with for example, if you're contracting with a housekeeping company and you have, like we do, an average turnaround of two and a half days where we're at you know 95% occupancy for eight units, if we aren't inspecting most of those cleans and that team knows that we're not inspecting them, corners will start to be cut and we won't find out until we get a bad review, and then we kind of have to peel back a little and figure out what went wrong. So I think putting a mechanism in place to be continuously inspecting the quality is important. Um, and it's not that they don't want to do a good job, it's that sometimes we put pressure on them to hurry up or to do too much, and so we need to inspect for our own deficiencies as well, not just a deficiency on the cleaner side. It could be a planning deficiency. And in my experience, um, there are a lot of planning deficiencies at at a lot of levels. Um, and in our vacation rental industry, there aren't as many checks and balances as in the military per se. So um it can slip through the cracks a little more if you're not kind of paying attention to that stuff. So I think those are some of the important aspects I've learned.

SPEAKER_02 24:33

So instead of so instead of like the cleaners telling you uh doing 10 units in one hour is impossible, well, okay, if they want it, we'll go ahead and do it, but it's not going to be the best job. They'll they'll try it anyways.

SPEAKER_01 24:45

I mean, I I don't know if they will try it, but I think that sometimes they do have a tendency to rush through a clean um and not maybe go through all the details. So I think just just checks and balances are important throughout.

SPEAKER_02 25:00

And how do they how do they respond to like the feedback when you say, hey, we sent someone through, this is dirty, this is dirty, did this wrong, this is wrong.

SPEAKER_01 25:07

They don't they don't come out, they don't get a defensive, or they just I mean I think that depending on how you approach it, I think it comes back to how expectations were set. Um and you know, when I first partnered with her, I let her know the you know, they knew the importance of the housekeeping apparatus to our company and that we wanted to partner with someone that had the same uh values as we did and the same, you know, how they want the guest to be treated. And so I think that they appreciate when we bring it up to her because it's also maybe showing her where she could fix some gaps in her company that could make them more efficient. Um, because at the end of the day, you know how important the reviews are. So if if they're getting reviews are slipping, and you know, it allows people to go back and just reassess how you know how they're handling the the process. So we've had some cleans where we had guests complain and they didn't charge us for the clean um because you know they felt that yeah, they should have done that and they didn't handle it. Um so we call them back a few, you know, maybe once or twice a week um to to fix something and they they usually don't have issues with it.

SPEAKER_02 26:23

And this is what I'm seeing a lot in the industry is like like these these you know people who are doing management and they're managing more than you know five, ten units. They're they're contracting a particular, you know, uh a clean a cleaning company, right? To do it instead of just using um like turn uh turnover BNB, which is it's good if it's like it's one or two, maybe. But yeah, they just like they they and they mentioned that they they want to find someone with the same values. So that I guess they have a boss to report to in a way. So you could tell to tell that person, hey, your cleaners are kind of messing up over here, and it's just more efficient to just get a just contract a cleaning company to do all the cleanings for you.

SPEAKER_01 27:00

Yeah, I mean, I think that you know, cleaning is definitely one of the top two or three most important aspects of vacation rent of management. You know, I think that you can make arguments for what's more important, you know, but I think that that's a huge aspect of it. And if you're just finding some random person online that you're hoping's gonna show up and clean it, and they're really that last touch point with the guest before they leave a review, that's a lot of trust you're putting in someone. And not that, you know, you can't trust someone to that degree, but I think that you know it's risky in in this industry when reviews drive the booking so heavily.

SPEAKER_04 27:45

Wow. And and one question I did have for you, like how and since you're not since you've hired a cleaning crew, how are you going about handling like the communication between, hey, it's time to go for a clean? Are you using like a calendar turnover BNB? How are you how are your your how is your team handling that?

SPEAKER_01 28:00

So we use Breezeway, um, which is breezeway.io is the website. I I'm 99% sure that's

Breezeway task management app - integrates with Guestie PMS, schedules cleans a week out

SPEAKER_01 28:09

the website. Breezeway.io, they do operational management and task management. They integrate directly with our PMS, and so they're able to pull reservations from the PMS directly into um the housekeeping app. So as a prerequisite for the housekeeping company working with us, they have to agree um to a hundred percent adaption rate of using our own app for the cleaning. So they just get their scheduling all through there and it's scheduled a week in advance. So which PMS system are you using? I use Guestie. So Guestie, I've used them since I started. I use them a little bit when I was consulting with a few companies, and then I've I've used them since we launched. Okay, and they've worked out pretty well for you? They've been, I mean, they've been fantastic for me. Um I like them when I used them before, and they've always been responsive. They're always, you know, new APIs. I think they were the Y Combinator, uh like Company of the Year last year, the tech company of the year. So, you know, and they've been around a while. As you know, there's new companies that pop up every week, it seems like a new PMS. There's I think over 300 or something now of them. Um total across hotels and arbitrage. So, you know, I like the company that's been around a while too.

SPEAKER_04 29:36

And is Guestie handling like all your guest communication, or are you just using them for just the management side, just like hey, keep track of the calendar and all that, or how's that going?

SPEAKER_01 29:45

Calendar, I we do some maintenance and task management, um, dynamic pricing. You can do a full dynamic pricing through them as well. Um, but yeah, we use all of that. Um, so everything.

SPEAKER_02 30:01

Cool. So, where do you where do you see the short-term rental industry going in the next in the next few years?

SPEAKER_01 30:07

I mean, I think it'll continue to be more mainstream. Um, you know, when I first started with Ficasa, 80% of the owners I talked to had never heard of Airbnb. Um, the first few owners I signed up, I met through Craigslist, through there used to be a vacation rental tab section. So I would click the vacation rental tab and I would email those owners saying, hey, you know, there's some new distribution channels that you should check out, like Airbnb. And, you know, they thought I was a scammer for a few months, and I kept following up, and then we'd sign them and kind of convert them over. Um, in fact, the first owner I signed up with Patriot, I met through Craigslist in 2014 signing her house up. So it's kind of funny how it's come full circle. Um, but I think it will just continue to be more mainstream. I think more companies on the guest services side uh will start coming in and you know, sophisticating the industry maybe a little bit more, um, defragmenting it through acquisitions. I think that there's gonna be a lot of acquisitions over the next few years, as there has been. Um, but I think on the technology side, it'll be interesting to see, you know, who's gonna, what companies are gonna get rolled up into other larger companies. Um, so we'll we'll see. I think there's gonna be a lot of a lot of changes, a lot of opportunity you know, for everybody. That's what I love the most about it is that it's an industry that anybody can come into and and and find success. So I think that I love that about it.

SPEAKER_04 31:50

And kept like, okay, so how are you currently marketing to pick up more units? You know, how are you just working with the owners? You already have a base set of owners, or are you still actively marketing?

SPEAKER_01 31:59

So most of my owners have come through referrals or through finding us like through Yelp. Um, one thing I've really tried to do is get guests leaving reviews on Yelp as well to kind of help us build that

Marketing through Yelp reviews - refunded $3,700 COVID cancellation, earned five-star Yelp review

SPEAKER_01 32:13

piece. So if they have a really good stay and leave a good review on Airbnb, we'll reach out and see if they'll go out of their way to leave us a Yelp review. And so we've had a lot of owners that have found us organically through Yelp and signed up that way. So six of our owners have come through either Yelp or a referral. Um, we haven't done any outbound marketing yet, but that's gonna be coming up in spring. Um, we'll start doing some more direct marketing campaigns, very targeted. So it's word of mouth right now. I think I've always said operations is the best marketing in vacation rentals. If you're if you're providing value for the owners and the guests are having a good time, owners will find you. Um I think it's pretty easy to sign owners up. I think just being realistic with the expectations and executing, that's you know, the the challenging part.

SPEAKER_04 33:11

Yeah, you dropped a gym. I had never thought to use Yelp. I whenever I think of Yelp, I think of food.

SPEAKER_01 33:17

And most people think of complaining. Yeah, that too. That's a good one. If you can get ahead of the game and get those reviews before the complaints, because the the Yelpers are gonna come at some point. It's like if but if you can just get ahead of them with a few good reviews that you know had quality time, um, I think that's that's important. So it's not all the Yelpers. So what's your helpers?

SPEAKER_04 33:42

You're just going on there. You you'd signed your company up to be on there, right?

SPEAKER_01 33:45

Yeah, like if you Google Patriot Vacation Rentals, Big Bear Lake, um, you'll see the Yelp page and you can click on it. And you'll see some guests that left us reviews. You know, they they canceled because of COVID outside of Airbnb's policy. We could have kept the money, like a lot of companies did. We called them and said, hey, we totally empathize with your situation, but this could cost us and the owner some money. If you would feel like leaving us a review on Yelp, that would be appreciated, but you don't have to. Here's your $3,700 back. And nine times out of 10, they go leave a great review on Yelp. So that's how you can do guests that don't even stay, you know, they didn't even stay with us. They don't qualify for an Airbnb review, but we still got a Yelp review out of them. Oh, that's great.

SPEAKER_04 34:37

I love that. Go ahead. Yeah.

SPEAKER_01 34:39

Yeah. I mean, that was a huge gem. I picked up, you know, at Vicasa learning early on how valuable the reviews were um to the overall revenue for each unit. I saw how intensely they focused, you know, we were focusing on that. So that's something I've always looked at. You really want to capture those good reviews, they're worth a lot.

SPEAKER_02 35:00

Hmm. So what did the guys at Vicasa think that you were starting your own um management company?

SPEAKER_01 35:06

Well, I left them years. I mean, there's a pretty large gap between, you know, and I have non-disc non-compete and non there's there's, you know, there's things I need to be careful of doing, and I am. I respect them um and what they're doing. I just think that, you know, I don't do well working for people. Um, I think, you know, I I I like to do my own thing and kind of uh make my own decisions. And this was a way for me to not only set the expectations with the owners, but more importantly, make sure that I'm following through with them. Um and I'm able to really do that now as the as the owner of the company. Nice. But I'm sure they're supportive. So I think that, you know, the industry is at a place where we, the operators, big and small, determine the future of our industry. Um, I think that, you know, vacation rentals could get shut down in a lot more areas. Um, you know, Big Bear Lake is even redoing some of their ordinances because of the uptick in parties. And those usually stem from homes that maybe aren't managed the way they should be or responsibly with respect to the rest of the community. So I think that as operators, we have an obligation to really push that we are responsible and we do care about the neighbors, and you know, 99% of us do, I think. So I think drowning out the 1% is important for us over the next few years. And I think companies, big and small, have an obligation to do that at the small level, but at the local and you know, the the government level as well to make sure that we're able to keep operating.

SPEAKER_04 36:53

So now that brings me up to the next point. What would what's your as a management company, because you guys have less risk, but like what is your exit strategy?

SPEAKER_01 37:04

As far as, I mean, for me, I'd like to the homes that I'm signing, and you know, especially under with Patriot as a very we give back a lot, very veteran initiative focused. Um, that's a huge for me.

Exit strategy: sustainable company with W-2 benefits, debt-free, conscious business

SPEAKER_01 37:19

That's what you know really motivates me. I I would like that to be around for as long as the vacation rental industry is around. I want to build a sustainable company where the employees that are W-2'd employees that I have, you know, have benefits. They're able to, you know, take care of their families and progress within a company. Um, so that I mean that's that's kind of my exit there is just building something that is sustainable at some level without too much overhead. Um, I I want to build a conscious business that isn't just burning through cash because I can, you know. So I want to take care of the owners and that sort of thing.

SPEAKER_02 38:02

Nice, nice. Are you running like a mostly debt-free business?

SPEAKER_01 38:06

Yeah, 100%. I don't even have a company credit card.

SPEAKER_02 38:10

Wow.

SPEAKER_01 38:11

It's all debit, one debit card. That'll change, but I I really, you know, early on, it's important for me to be involved as much as I can and make sure that we're making the decisions that, you know, I have promised the owners we would be with their best interest in mind. So, you know, I I like every owner feels like the only owner. That's kind of my mantra with all my owners. They could call me at any time. You know, I got calls on Thanksgiving, uh, on weekends, just to talk about even things other than vacation rentals. Um, so that's a huge part of it for me, just the whole relationship side.

SPEAKER_02 38:50

Nice. And and I've noticed that too, because like um it's funny because you know, when I was setting up my my own arbitrages at first and and doing things like that, I was using, you know, hitting the credit card, paying someone to go and design them and and just, oh, oh, they spent that

Running debt-free with one debit card - forces creativity, tighter operations

SPEAKER_02 39:07

much. Okay, well, it's on a credit card, zero interest credit card, I'll pay it back whenever. And then um, but when I started uh partnering with my buddy, you know, Federico, we we started getting some arbitrages of our own. I thought him, you know what, I want to try to be as debt-free as possible. And I said, and then so I mean, at first it was like, okay, well, how are we gonna get a unit up and running? We it it caused us to be more creative, you know. It caused us to talk to the owner, hey, you know, can we can we um go ahead and get in there a few weeks early? Can we go ahead and do this? Is this you can leave the place furnished? Well, you know, we'll do, you know, it caused us to look at furnished places already. And and instead of just saying, oh, you know, I'm just gonna get any apartment or any you know, condo, and I'm just I got like I got access to $100,000 in debt. I'm just gonna go ahead and spend 10 or 20 grand on there, you know, it kind of makes you lazy because it's like easy. I got the money's right here, I'll pay it back later. But when you you know you have a specific amount of money to work with, it causes you to like think outside the box, how can I get in there as cheaply and efficiently as possible? And then um, and you're and it changes your whole mindset and and you start operating a little bit more efficiently, like a like a machine. Uh, just what I've noticed, you know, instead of instead of using debt.

SPEAKER_01 40:17

Yeah, no, I'd I totally agree. And I think that for arbitrage, you know, I consulted with a few arbitrage companies that were managing, you know, north of 100 units. And, you know, I would always recommend diversifying into some, you know, single family uh revenue share management, and that can allow you to build some cash flow that you can then put into the arbitrage model. Um, so I think that's a way to look at it too, building up a little cash, you know, like a little hybrid model. But yeah, I mean, I agree. It's it's very it's a volatile industry, a volatile time in general, and then with too much debt, it's you know, you we've seen how fast some companies have shut their doors during the pandemic. Um, but it's a heavy cash industry as well. Uh, you know, it's it takes a lot of cash for the arbitrage.

SPEAKER_04 41:10

So I love what y'all brought that up because it goes back to this episode we had with Alvin Hope Johnson. He said, I have keep a water, he he lost everything, got it all back, but he goes, I keep a waterfall of cash now. So on the back end, I got something that's just cash flowing. You know, you gotta have that. That is very important. Very important. Definitely.

SPEAKER_02 41:30

Yeah, and I've noticed with mine, like we start we start making some profit from the next one, or or we get like a long-term renter with, you know, they give us a you know, thousand-dollar deposit, they get first months rent and all this stuff. I was like, oh, okay, we got we can go ahead and start the next one with this money, you know, and then start cash flow on that one, and then some get someone in there for three months, six months with their money, we can start the next one. It's kind of like, yeah, we're using that cash flow to to start the next one instead of just you know putting it all on a credit card or something like that.

SPEAKER_01 42:00

Yeah. Yeah, no, I mean, I think that's a good idea too. Just, you know, and then the good thing is you're kind of refining, you know, you're iterating on the ops side, and you know, some metrics to track that I started tracking was like um time time to live. So from the time you're first able to start getting the homes

Time to live, time to revenue - metrics for refining onboarding and cash flow

SPEAKER_01 42:19

onboarded, how long it takes you to actually go live with it, and then time to revenue. So the time from the time you go live to the time you're first getting revenue, and then from the time of when you start to revenue, I would look at those metrics as well and then see where you can kind of refine that process and you know start cash flowing a little sooner, maybe.

SPEAKER_02 42:45

Exactly. And and that's the thing too, because like like for example, if I spent five grand to start off uh one one bedroom condo back in the day, zero just credit card. I might not make that five grand back until like month five or month six or longer than that, you know. And I'm just that's just to pay off the debt. And then I can start actually making profit. Whereas now I've you know we switched it to finding places that are already furnished and we, you know, negotiate with the people to leave the stuff there. In month one or two, we're already profiting. It's it's like, yeah, it totally changes uh how you think when you when you don't I get I I guess sometimes it I think that debt makes us a little lazy.

SPEAKER_01 43:22

Yeah, I mean, I think some is necessary early on. I think even with the management model, I was, you know, there were weeks where I was like, oh, this is gonna be a tough payroll. But you know, it was early, and you know, I knew I was going in in the middle of COVID. I knew that even making it to December was uncertain. So that was for for me, it was like that's how I like it. I kind of operate a little bit better in a little bit of chaos with like I don't want to say my back against the wall type thing, but yeah, I mean when there's a little pressure on, I feel like that's where I get the best results out of myself. So it's a timing thing, you know. If it takes You five months to get the 5k, or two months can also be kind of a timing thing in the market, like when you're going live with the units and that sort of thing. So there's a lot of considerations, man. That's what I love about the industry. It's you know, it's complex. People you wouldn't think how complex it is, but you know, when you start digging in the weeds, it it's complex for sure.

SPEAKER_02 44:24

And plus, I mean, you talk about chaotic situations or whatever. I mean, you're coming from the military, so this is probably nothing compared to what what you've been through.

SPEAKER_01 44:34

Uh well, you'd be surprised because you're kind of built for it. Like that's you know, that's your comfort zone a little. So I've had days, I've had stressful days in the vacation industry where I'm like, whoo, man, send me back to Afghanistan. You know, but I mean, but really though, I mean, there are some overlaps where, you know, stress is stress. I think that you know, people deal with it differently. Um, but I definitely think that housekeepers could be under just as much stress as someone, you know, doing something that people would say is more stressful. Um, so I think, you know, it just kind of depends. But yeah, the military definitely prepared me for making decisions under pressure that have consequences. I think I'm a lot more comfortable just making a decision without having to think too fast. Um, you know, that's probably the biggest uh benefit, decision making.

SPEAKER_02 45:37

So oh cool, yeah. And and I guess in in life there's good stress and bad stress, right? I guess bad stress would be something stressing over something you can't do nothing about. And good stress is a situation where, oh shit, we gotta make payroll, we gotta do this, we gotta get these units going, and you gotta, you know, a few days, you know, a few weeks to do it, you gotta figure it out. But you at least you have some control and it's a good stress. It pushes you to think outside of the box and try to accomplish things.

SPEAKER_01 46:02

Yeah, and I have to reframe that just for me, because I'll start going down that like you know, where I start maybe making things a little more stressful than they are because of maybe m past experiences, and I'll have to say, I'll have to reframe it and say, you know, you don't have to do this, you get to do this. You know, a few years ago, you would have wished you could be doing this right now. So I think, yeah, just you know, reframing, it's all about perspective. So I think, you know, when you look at it that way, it's um spot on, Steve, for sure.

SPEAKER_02 46:35

Nice. So, what advice would you have like to our fans and listeners, like how to get started in this um short-term rental industry?

SPEAKER_01 46:43

I mean, I think you know, get educated is a big part. I think there's a lot of um educational information around how to sign new units up is probably the most common educational piece I've seen. I think that people will find that's the easier part. I think dig a little deeper and start doing some operations research. Get on like the operations website, like Breezeway, look at some of their tutorials. Maybe just because they're on a uh uh Breezeway or VR schedulers website, it's a lot of industry knowledge. So I think getting on the different channels and really inundating yourself with the knowledge is important because when you get in front of these homeowners, they're gonna expect you to have a high level of knowledge when they start asking questions because many of them have been managing themselves for a few years. Um, so I think just get educated, start planting the seeds for the relationships that you want to grow. Um, some of your best homeowners that you sign in two or three years, you're gonna meet today or tomorrow. It can be a nurturing relationship. So start planting seeds and um you know set set clear expectations. I think owners they are very optimistic at times and they will believe a lot of what we tell them as management companies. And I think just making sure you're setting very clear expectations um is critical for for growth and for starting out because you can lose owners just as fast as you sign them.

SPEAKER_02 48:26

That's good information right there. Yeah, anything to add, Micah?

SPEAKER_04 48:30

No, no, that was that was that was really good stuff because I I definitely just looked up Breeze way. It's definitely stuff that I need to look into. So uh yeah, you're you're a wealth of knowledge, man. And uh by the way, we met him off Clubhouse as well. So he's a wealth of knowledge, man. So definitely.

SPEAKER_01 48:48

Once COVID's over, too. Oh, yeah, for sure.

SPEAKER_04 48:52

Definitely come out, have a drink, or do what we can do, hang and talk some chat.

SPEAKER_02 48:58

Yeah, so so where can folks find you, Kevin?

SPEAKER_01 49:02

Well, so my website's patriotvr.com. Um, you can find me at uh my link tree is linktree.com forward slash Kevin Knight. That has all the links to you know my own personal pages, my LinkedIn, my website, uh, you know, even like a poker page. And then I've got some deals for like price labs, rank breeze, um, some other sites that folks can can look at and and and check out. So you're a poker player. I am, I try to be. I'm not saying I'm a good one, but I do like playing tournament poker.

SPEAKER_02 49:39

Like online or at the casinos or what?

SPEAKER_01 49:42

I play online, but I've I've I've played in the world series of poker. Really? So not the main event, but you know, they run about 50 events during the World Series. I played in three of them, I cashed in one of them. Um, so I mean I can I can do alright if I get real lucky and then playing against really bad players. But no, it's fun, man.

SPEAKER_02 50:04

You know, I I I I fancy myself a decent

World Series of Poker experience - cashed in one event, poker teaches negotiation and reading people

SPEAKER_02 50:07

poker player. And and and it's and it's cool. It's in a way, it it prepares you how to talk to how to talk to and and and look for signs in people when you're when you know, like you said, homeowners or people you're trying to do business with. You know, it kind of helps you keep your cool and then see see how they're reacting to what you're saying, you know. Poker kind of helps teach you that.

SPEAKER_01 50:27

Oh yeah, absolutely. Definitely, man. No, we'll have to play too, man, if you guys ever come out to Vegas for sure.

SPEAKER_02 50:34

Oh, big time, yeah, yeah. Maybe we'll play some online poker too. My dad likes to play too, get a room or something.

SPEAKER_01 50:40

Yeah, they got the WSOP online out here. You can play for real money. Oh, nice.

SPEAKER_03 50:47

Oh, okay.

SPEAKER_01 50:48

Yeah, they had the World Series because they canceled the live one, so they had it all online, all bracelet events. So yeah, there's tournaments going every every day on there. Cool, cool.

SPEAKER_04 50:59

Check that out. Yeah, man. I um now he also had to give me the inside gems on Breezeway. So, yeah, this is a dope platform. I'm definitely signing up for a demo.

SPEAKER_01 51:08

Yeah, man. And reach out Vincent. Actually, I'll email you too. I'll connect you with him directly. Okay. Uh, if you want. So, yeah, I'll I'll connect you with Vincent for sure.

SPEAKER_04 51:18

Perfect. That sounds good, man. Thank you for coming on and uh providing value, man.

SPEAKER_01 51:22

Yeah, no, I really appreciate it, man. Uh, you guys are great, and uh, we'll talk soon. All right, thanks, Steve. Thanks, Micah.

SPEAKER_02 51:29

Yeah, thanks, Kevin.

SPEAKER_03 51:31

Thanks. You are out later. All right, Stevie Stacks. Let's do have another great episode.

SPEAKER_02 51:40

Yeah, the awkward dismount. Yeah. Yeah, man. It's a great show. Uh Kevin was a great guest. Let's drop some insight on us. And um Breezeway, I did circle that because I was like, why does he keep mentioning Breezeway? What is that about? And then uh you're over there looking it up, so you I guess that's a pretty cool site.

SPEAKER_04 52:01

See, that's what I was looking at. That's what I was asking about his operations, man, because I'm like, I gotta find a way. You gotta find a way once you're expanded to have everything just streamlined. So I really am trying to I'm trying to replace myself right now. So I'm like trying to find all the tools to where I can just hand it off to my assistant. They take care of everything. So this looks like it's pretty dope. So yeah, man.

SPEAKER_02 52:21

Oh, nice. And you are you still um studying to get your uh to sell houses to um your license?

SPEAKER_04 52:27

Yes, sir. I uh actually started reading today after I finished my book. I started reading today on my real estate, so I'm on that

Myka studying for real estate license and setting up new Dallas units

SPEAKER_04 52:34

real tough. Uh yeah, I'm I'm going all in.

SPEAKER_02 52:38

It's not like you didn't have enough stuff to do already, huh?

SPEAKER_04 52:42

Yeah, I ain't trying to offset stuff, so I don't have a lot of stuff to do. So uh, but yeah, man. Once I get that license, I've been pretty excited about the opportunities that I see. Uh so yeah.

SPEAKER_02 52:53

Cool, cool. So you're heading out Thursday? Yeah, yeah.

SPEAKER_04 52:56

Heading out Thursday, heading to Vegas. We'll be there for Mahogany's birthday for four days. Uh nice. Staying in our own Airbnb out there. So yeah, doing that.

SPEAKER_02 53:05

That is cool, man. Yeah, Federico will be in town for this week and next week, so we got to do a uh a show.

SPEAKER_04 53:11

You'll be here next week too, right?

SPEAKER_02 53:12

Yeah, yeah. When's he leave? I know he's I know he's still got over almost two weeks left here. So yeah, yeah.

SPEAKER_04 53:20

Next week when I come back, man. So we gotta hang out. We got to do it.

SPEAKER_02 53:24

Yeah, Tato R man in Buenos Aires is here. So yes, sir.

SPEAKER_04 53:27

We gotta get him on and uh talk, chop, shop with him because uh yeah, he's doing a hell of a job. He's a hell of a job, man. So so y'all picking up more units in Dallas?

SPEAKER_02 53:36

Yeah, yeah, we're getting one ready right now. Well, we just got one ready and got a three-month person put in there. You know, yeah, I told you I like that model better, you know, throwing someone in there, forgetting about it. It's a lot easier, lots less headache, a lot less work, and as um, hey, less work and you still get good money, that's that's the way to do it, right?

SPEAKER_04 53:53

Yes, sir. Yeah, I'm uh we got eight on the line, but I'm like, I'm not not sold on them because I don't like their certain there's a lot of red tape. So I when there's red tape, I'm like nowadays. I you when I first started, I would go through that now. I'm like, if you can't meet the needs of what I need, then I'm not touching it. So quite a few on the line.

SPEAKER_02 54:15

So I'm just like yeah, we're starting to see a little of the red flags early on, too. Like, hey, we're gonna need the information of your guests that are gonna be staying here, stuff like that.

SPEAKER_04 54:25

Like pet vaccines, shit like that. Like, come on, man.

SPEAKER_03 54:30

What are you worried about here? Come on, pet vaccines? Like, dogs got COVID? Come on, man.

SPEAKER_04 54:37

Like uh I want our our our listeners to know, man, if it's just too much red tape, but it's back out of the deal. It ain't worth it. Like it like Steve said, you can go find somewhere that's fully furnished. There's so many different models. Don't don't waste your time on that red tape crap, man.

SPEAKER_02 54:51

Like when I they said dog vaccines, I'm like, the f okay you know, you know, I I know you've um you've already probably because you've done arbitraging for a while now, but what I've noticed, man, it's just like how many of these apartment complexes, it seems like they only have like one worker there that you try to message back and forth with, and it's oh, you know, I can't, you know, I can't tomorrow, or I can't the next, you know, until next week because uh I don't know, my daughter's recital, or I got this, or I'm going out of town. I'm like, is not anybody else working at the damn office? You know, I'd really like to.

SPEAKER_04 55:24

You gotta climb that corporate ladder. Yeah, you gotta go above them. That's we've been finding. You just go go above them. So we got this deal where uh our guy, he just went above everybody. He's like, Look, I need a corporate lease. This is how many units we want. And then they put us up with the corporate people, and they're like, Oh, okay, this is what you're trying to do. Yeah, you can't call that dude at the front desk. Dude might not be there one day. Management might change. Yeah, no, don't call that dude at the front desk, man.

SPEAKER_03 55:51

That's what I call him. The dude at the front desk, man.

SPEAKER_02 55:53

Dude at the front desk that's hardly ever there, man.

SPEAKER_03 55:57

Yeah, you gotta you gotta go above them. Like, man, let me speak to your manager.

SPEAKER_02 56:01

You hear some chickens in the background. That dude might even be in the Philippines or something.

SPEAKER_03 56:07

For real, yeah, man. You gotta, yeah, no, don't the dude at the front office, that ain't the one you want to talk to.

SPEAKER_02 56:12

So how do you how do you how do you go up the corporate ladder?

SPEAKER_03 56:15

Uh just let them know what you want.

SPEAKER_04 56:17

Like, hey, uh tell the person at the front desk, the dude's the front desk, but look, man, we need 15 leases. He's gonna be like, oh, what the hell? You know, you gotta throw something big and crazy at him, you know, just so you know, like, hey, get me to someone

Climbing the corporate ladder - ask for 15 leases, get past the front desk, find decision makers

SPEAKER_04 56:29

who can uh get this deal closed, then you pitch your whatever you're pitching, you know. Uh first thing I tell people get on the phone and just ask if they're doing corporate leases. If they say no, go to the next one. Um, getting the yes, and I was I was just talking to a friend of mine, uh Mike, um uh ex-football player. I was talking to him and he was talking about it, and he was just asking me, I was like, yeah, man, it's getting the yes is pretty easy, but having you just have to have everything lined up, your dunes number, have your business structure set up. And that's where I find a lot of people, they don't have a business structure, just business structure in general. And I was telling like a guy was saying earlier on Airbnb on Facebook, they were like, Yeah, you don't need to run background checks, man. Airbnb will do all that for you. I'm like, man, you gotta get out the Airbnb train, dude. That thing is all over with, man. You gotta have your own business nowadays. So business structure is huge.

SPEAKER_02 57:18

Yeah, the chaotic hosts, right?

SPEAKER_04 57:20

Yeah, yeah, yeah, yeah. Like like uh Eric called him, the chaotic hosts. And I knew exactly what he was talking about. I'm like, that is people don't strive for the business structure, you know. That's why I loved his uh uh Kevin. He was talking about the business structure. I have Breezeway, I have that or guesty. And then one thing about Guesty, I will say, I wasn't happy with them, but maybe with the right business model, maybe from a management business model, Guesty might be perfect. Because if you think about it, if you're they only take one percent, and if you're taking 20% and that's all you're doing, you 19% and they do everything for you, might be a hell of a trade-off.

SPEAKER_02 57:56

That's true, right? That's true. Cool, man.

SPEAKER_04 58:00

But yeah, man, good show. Uh, where can they catch you, Steve?

SPEAKER_02 58:04

At livelethrive.com, live that thrive at gmail.com. Uh, we're on all the sites, the IGs, we're on the Facebooks, we're on the um clubhouses, we're we're everywhere, man. You can't miss us. Live that thrive, leave us a review somewhere. Hopefully, yeah, leave it on iTunes. That'd be a great way, great place to leave it. We're loving the reviews that are out there, most of them. And uh even hey, even a bad review, it you know, helps us. Okay, we're doing that wrong. Uh, you know, screw you anyways, but we're still gonna do we're still gonna keep it real, but we'd like hearing, you know, we like hearing people's opinions.

SPEAKER_03 58:38

Oh bad, just send us an email, dude.

SPEAKER_02 58:42

Hey, are you are you gonna get the COVID uh one of the vaccines?

SPEAKER_04 58:47

No.

SPEAKER_02 58:47

No, okay. It's not controversial. It's not controversial. Uh I was it's funny. Yesterday I was at the it's a funny story. We were at the the IKEA, me and me and Federico were at the IKEA, you know, two dudes shopping at IKEA, whatever. And and we're and we're we're sitting outside eating some pretzels, you know, right there out front, because I guess you got to take your food outside now, whatever it is. And uh and this brother man came up to us, he goes, I didn't know if he was homeless. I don't know what you know. He just he just came up with, hey, hey, my brothers, uh, y'all didn't get the kill shot, did you? And I was like, uh, the what? The kill shot? He goes, Yeah, that COVID vaccine. Y'all didn't get the kill shot, did you? I was like, no, no, sir. He's like, oh man, don't get it, man. That's straight up killing people. I was just I was having fun with him. I was like, yeah, man, that's what I heard. It killed Hank Aaron. He's like, he goes, he got the first shot and the next, he got the next shot, and it killed him the next day. It's killing people. Don't take that kill shot. We're tired. We're killed.

SPEAKER_03 59:55

Oh man, Steve's crazy as shit.

SPEAKER_02 1:00:00

I've been listening, I've been reading about it a little bit. Uh I might I might go ahead and get it, man. It's it's not, it's not, yeah. I might go ahead and get it. I gotta we gotta go back and forth to Mexico a lot. It's gonna help us with our travels and stuff like that. You know, we don't have to quarantine if we get it.

SPEAKER_04 1:00:16

It is you know, I'm going to Mexico in May.

SPEAKER_02 1:00:19

Okay.

SPEAKER_04 1:00:19

And uh uh past guest, uh Amanda, I saw her. You know, you have to get a COVID swab just to, you know, you have to scratch your brain up a little bit just to come back into the country. Uh she showed the process. So yeah, I mean, that's a good question. I mean, but do you have to can you bypass that if you get a COVID vaccine?

SPEAKER_02 1:00:37

That's what they're saying. Yeah, when you don't have to do when you come back, you don't have to quarantine for 14 days if you have if you have the vaccine. Now, right now they're they're yeah, they're recommending it when I come back from from here from yeah, from over the Mexico, I have to quarantine for 14 days, unless I have the vaccine and I can go straight back to work. Now, the thing is, most people didn't won't even tell their they don't have to tell their jobs where they're going, whatever. I I fly on my on my jobs tickets, so they know they know where I'm going. So it's a little bit of a different a different deal. So and my wife was explaining it to me, and I've been listening, you know, the podcast, and I've been reading a little bit about it, and I'm like, you know, it's my mom got the two shots, and she's old as she's old, you know, real old, and didn't affect her at all. She feels great. So I'm leaning towards it. I'm leaning towards it.

SPEAKER_04 1:01:23

Yeah, once you get yours, man. I might have to get one of your fake vax cards and put my name on it so I can roll to Mexico.

SPEAKER_03 1:01:32

You already know that's about it. I'm telling people right now, if they start mandating like in and out of the country, I I could see some fake Vax card thrown through.

SPEAKER_02 1:01:39

Oh man, I bet it's a big deal. Yeah, it's a big thing. Um there was traveling to uh when I was at the airport the other day, you know, I worked there and and um and I was walking around upstairs on my lunch break, and there was this it was a CVS. It was like a little area at the airport. It was like a CVS, had like um it had like dividers and stuff, and like a little, there's a desk right there, and it said COVID, um uh COVID tests, rapid COVID tests. I was like, so I talked to the I talked to the girl that was there. There was no line or nothing. I was like, oh, so you got you got racket rapid tests right here? It goes, yeah, yeah, it's mostly for people that are going, you know, to Hawaii or or certain certain countries that you have to have, you know, Hawaii's not another country, but they require uh a COVID test, you know, within 72 hours of your flight or whatever. And um, and I was like, Oh, cool. So is it free? Is it she's like, oh no, it's like $250. But you imagine the people getting there for their Hawaii trip and say, Oh, by the way, some people that don't read or don't check it, uh yeah, but you still, what are you gonna do? Cancel your whole Hawaii trip? They're gonna make some money off that freaking COVID shit, man.

SPEAKER_04 1:02:47

See, and that's what I was telling people, man. I don't think they'll force the vaccine, but they can they can push it, you know. You know, they can push it. Uh I don't know, man. I'm I might go get mine. Me, me and Mahogany don't think about it. It is funny, like, I'm like how you were saying, like, we were in, I went to Walgreens the other day, and it was this older lady walking around with no masks, man. I'm like, oh shit. Like, she took the governor Abbott's word to heart and said, Fuck this. So I was like, damn, you know, and I'm sitting there in the like, I'm behind her in line, you know, and um she starts talking to cash or she goes, Oh my god, I'm so sorry, I forgot my mask. And I was like, Oh, okay, she forgot, so I'm listening to her. And she's like, But I promise I'm vaccinated. She pulled out her vax card, showed her. She's like, Oh no, no, you're fine, you're fine, you know. So I guess like those vax cards, people keeping them on them, like their credit card, you know, like to show their proof of moving around. But I don't I don't know how those are gonna play out in the future, but we'll see.

SPEAKER_02 1:03:38

Yeah, this the CD said if you get your vaccines, you you don't have to, you know, social distance, you don't gotta wear masks no more. They're like, damn. I know, it's all shady, it's all the Emperor has no clothes, but we can't say Yeah, we'll have to see on this one, man.

SPEAKER_03 1:03:56

We'll have to see, man.

SPEAKER_04 1:03:58

But yeah, man, we we always love talking shop on uh Live Let Thrive.

SPEAKER_02 1:04:02

So uh Yes, sir. It'll be fun when we get Fede on here.

SPEAKER_04 1:04:05

One last thing. Do you think we're hitting a crowd a housing crisis?

Housing crisis question - overbidding everywhere, proof-of-funds demands, financing falling through

SPEAKER_04 1:04:16

I'm gonna tell you what I mean by it, but I'm gonna let you answer first.

SPEAKER_02 1:04:19

I mean the government money gotta run out sometimes, right? It's propping everything up. So when they stop, you know, printing trillions and giving people money and giving them $600 on top of their unemployment, it might it might get a little uh it might get a little bad, it might get a little rough.

SPEAKER_04 1:04:37

Yeah, because I'm noticing with this 1031, bro. I thought Texas was the only place they're sitting here overbidding on houses. Man, they're doing it everywhere. And it's getting stupidly crazy. Like I'm gonna tell you how crazy it got. So I um I've been I've been dog, I I've probably put in about 10 offers the last week on houses, just 10 straight offers over the asset price, like two, three thousand over the asset price. Nothing crazy and stupid. These other people putting in like 10 and they're getting them, right? But like I put in an offer today, and I think I don't know if it's maybe maybe some discriminatory shit going on in the background, I don't know. But so the the the realtor comes back and she goes, This seller's agent's asking for some kind of weird stuff. She goes, she's asking for you to show proof of funds. So I'm like, oh, okay, whatever. I sent her my 1031 letter, right? And then she comes back and says, Well, she wants the full cash amount. I'm like, but I'm getting it financed. And my realtor's like, I know, but that's what she's asking for. I'm like, are they just like saying F it? I'm only taking cash offers, which they can't legally by law do that. But I'm like, what's going on? But these houses are getting like sniped up, and she could, but the realtor comes back and tells me a lot of people's money is falling through, you know, their finances falling through. So I'm like, hmm. What's going on? I don't know. But even even my refi did, man, it took it took a long ass time to get that done. We just literally got it done two weeks ago. And it took months. But it seems like there's not enough housing going on. Like maybe I think kind of Alvin kind of touched on it a little bit. He goes, Man, we need more houses. And maybe we're running into that because these houses on the market a day gone. Like, and this is in Arkansas, you know what I'm saying? So I don't know. Because I don't I know you haven't been in the buying game, right?

SPEAKER_02 1:06:32

So not really, man. Everything was so freaking high. And um yeah, it's and then I got into the arbitrage thing. I'm like, man, I could rent a place cheaper than buying a place, you know, then putting a mortgage on a place, and my mortgage would be higher than renting a home, you know, a nice home.

SPEAKER_04 1:06:48

And you know, that that used to be the big huge selling point of buying a house, right? Hey, you you can rent cheaper than where you live, right? But that's not even the case anymore. You could literally go get a three-bedroom apartment cheaper than a house. Exactly. You know, and you ain't gotta do no maintenance.

SPEAKER_02 1:07:06

You're not building no equity, but still.

SPEAKER_04 1:07:07

Yeah, you're not well, you buy you you're a real estate investor, you're getting your equity through the investment side, right? So even if you think about the equity, is the equity worth you buy in this house, you put five percent five to ten percent down, you buy the house, and then some shit breaks, you gotta fix it. If you live in there, you know, it ain't no house hack. What's the point of owning a home?

SPEAKER_02 1:07:32

Here's the thing, also, because and I think the the major thing, if you ever you ever go to the Zillow and you play around with that mortgage thing at the bottom, right? And it's it'll tell you the mortgage, oh, it's only 900 a month. But you click on the thing to add the taxes and insurance. That shit shoots up to like 1900 a month. And I'm like, and it keeps going up every year. Taxes and insurance keep going up, and with this big freeze and all the pipes bursting, who's gonna pay for that? We're gonna pay for that shit. Our shit doubled for Katrina. And you imagine this thing, it's gonna like man, get ready for your mortgage, all your mortgages to go up, dude.

SPEAKER_04 1:08:07

Dude, I mean you're making a good point, and I'm thinking about that shit. I'm like, dude, would it be easier to just rent out my house and just go live in an apartment? Shit break, they gotta fix it.

SPEAKER_02 1:08:18

Grant Grant Cardone style, yeah, yeah.

SPEAKER_04 1:08:21

Exactly. That's what he's saying. If if shit breaks in this house, you gotta fix that shit.

SPEAKER_02 1:08:25

So you telling the renters to do it? No, no, that's what I'm saying.

SPEAKER_04 1:08:29

Like, even, but even if you have renters, you at least bring in generating cash flow, right? So, okay, I'll take a hit on my cash flow. Here, you're taking a hit on everything. It's your shit, you know what I mean? So it's like, you know, and then my neighbors, they're selling their damn house, and they're moving to Waxta Hatchie, which is kind of outside of the area, you know, a little bit further out. But I'm just thinking that, man, like maybe this house owning shit, because right now I'm about to do about $5,000 worth of work in my house, get some holes patched up, uh, you know, uh, get my office enclosed. And I'm like, man, I wonder if renting an apartment is cheaper. Because I think renting is ultimately cheaper.

SPEAKER_02 1:09:05

Right now it is.

SPEAKER_04 1:09:07

If you take the rents, rent, lights, water, gas, maintenance, there is no maintenance because they gotta cover it. You know.

SPEAKER_02 1:09:16

Grant Cardone rents a badass luxury apartment in in um or condo in um in Miami. He ain't he ain't buying it. Some breaks, they gotta fix it.

SPEAKER_04 1:09:26

You have to could we be saying, is a home really equity or just a money pit?

SPEAKER_02 1:09:34

It's your biggest liability until you're making money off of it, right?

SPEAKER_04 1:09:39

Until you rent it.

SPEAKER_02 1:09:40

Until you rent it.

SPEAKER_04 1:09:41

Because I'm what I am doing. I am doing a HELOC on it, but I'm like, man, it it because I I by the way, I we should have done that a long time ago. Get it, I my new thing is get a HELOC on your primary, everything else, cash out refines. But yeah, I should have done that a long ass time ago. I never thought about that. You know, might as well use your home as leverage, get let your HELOC set you up, rentals, arbitrages, whatever you want, and then uh let it cash flow the house. That's the only way I can see it. Doing it.

SPEAKER_02 1:10:08

And that and then if you look at it that way, yeah, okay, your primary home is is kind of like your bank. Yeah, you get that instead of renting an apartment, you don't you you know, you can't use any of that stuff. That's true.

SPEAKER_04 1:10:18

That's true. But yeah, I just kind of wanted to throw that out there because I've just been noticing real weird shit in the housing market, man. And I'm just like, yo, this is getting crazy. There's no houses available, man.

SPEAKER_02 1:10:29

Man, I'm I'm I'm looking at the it's it's it's crazy because I'm looking at you know Zillow every day. And as far as trying to rent a house now, I'm like, well, that might be the that might be the play. Man, the rental prices, since so many people are trying to do rental houses now, the prices have dropped. Like you can get into a place for like whereas a few months back before this COVID shit, I mean, people were wanting like $1900, $2,000 for these particular houses I was looking at, or $2,000 or more. And now they're asking for those same ones around $1,500, $1,600, maybe $1,700. So they're dropping their because there's so many people now in the rental game, and there's like a race to the bottom. So I mean, I can I can arbitrage some pretty good deals right now.

SPEAKER_04 1:11:10

Now, have you been doing houses or are you just still doing like the apartments?

SPEAKER_02 1:11:14

Uh, we're still doing the condos, um, but I'm looking to do get into the house, the housing part of it.

SPEAKER_04 1:11:19

And I like how Kevin said that too. The thing I like about houses is too, you can increase that KPI. Like I just did that on my houses in Arkansas. I said, Man, I'm I'm gonna see if I can make three thousand dollars a month. And I just went to price labs and adjusted the prices to where my bare minimum is gonna be three thousand a month due to the pricing, and I'm gonna see if it works. So, yeah, that is a good thing about houses too. And I didn't see I didn't even know I haven't been looking at the housing here, like the arbitrage game here, like on the house side yet, but it's been on my to-do list, but I didn't know that they were dropping, like in Grand Prairie, too.

SPEAKER_02 1:11:50

Yeah, that's where I'm looking, Grand Prairie. Yeah, the rental prices are dropping, and so many people, it's the bigger pocket effect, you know, everybody's buying houses, everybody wants to put their money into something that ain't cash because they're putting trillions of dollars every every day. They're gonna every other week. They, I mean, it's your cash is turning into trash, literally monopoly money. Might as well put it into an asset that's gonna appreciate, right?

SPEAKER_04 1:12:12

Wow. I did not, man. You really put me on some game tonight, Steve. I did not know the housing prices, but it it goes into what I was saying, man. It's just like it just doesn't seem like it's enough housing available, and I feel like we're running into that situation. Uh, people's gotta shack up at apartments, what it seemed like.

SPEAKER_02 1:12:31

Right, right. And then what's gonna happen to these people renting out their houses and dropping the prices, they're gonna start getting, God dang it, I need to get someone in there, and they're gonna overlook some credit stuff on people's on people's uh credit reports just to get someone in there, right? And man, they're in for a rude awakening when they start doing that.

SPEAKER_04 1:12:47

See, and and what I think we're running into is that you're this bike, this is a perfect time to arbitrage. Perfect time to arbitrage. If you can go in there, you're a liable company, you know, um, it's a perfect time. And I like how you you guys brought up the no debt, a business with no debt. You know what I mean? I was like, that's a good idea, you know.

SPEAKER_02 1:13:04

You know, if you're a no-depth business, that's and that and that's what I because like I said, I used it, you know, for the first few and you know, you know, getting Sarah to to decorate them and stuff. She did a badass job, but I put on zero interest credit card and I just paid later. So I didn't really care what the budget was. But when we got something, we can see exactly how much cash we got and how much we can spend, and we're hey uh let's not do that, let's just let's try something else. And how are we gonna get into a place and fully furnish it and we're gonna spend less than five thousand dollars? Well, if it's already fully furnished, we spend zero dollars, you know. It it just changes your mind how to look for uh different types of deals, right? And and um, because like I said, it with that debt I was just lazy. I was like, I just put on the credit card, yeah. Whatever you want to go buy, you know, I don't care if that then I got the bill. I was like, God dang, I never even spent that much money on my own on my own furniture at home. This is kind of crazy for a one a one-bedroom freaking condo.

SPEAKER_04 1:13:58

But yeah, it's the five down in Houston. We I I still have 16k in total, but it's all business debt though. So it it's different if it's on your personal, but if it's all business debt, it's a little bit of a you know, because you know you can you got cash flow to cover it. Um, but yeah, that is that is better because I like right now, because of these next eight, if if I decide to take it on, I would probably do a zero percent APR business credit card and I already have the lady waiting. Um, and relationship building is huge. I would tell people that too, because then you can get like access to capital real quick. But yeah, you're right. You become very what is the word I'm looking for? Creative when you don't have and you have to you know work things out.

SPEAKER_02 1:14:43

It's just like the power, it's the power broke, is essentially, it's exactly what I think I like that. Yeah, you you you gotta learn how to you gotta figure out a way to do it, you know.

SPEAKER_04 1:14:54

Yep, I like that man. So but yeah, I just wanted to throw that housing thing at you to see your mind on it. But I'm definitely about to be looking at some houses now since you said that. I'm like, oh shit.

SPEAKER_02 1:15:05

Definitely. Cool, man. Great episode. We are out later.

SPEAKER_00 1:15:11

Peace. Thank you for tuning in to this week's episode of Live Let Thrive. Be sure to tune in next week for all the latest in the world of Airbnb and all that entails. Bye-bye.