The Million-Dollar Real Estate Business YOU Can Start Today with Just $150

Tony:
This is Real Estate. Rookie Show 433. What’s up guys? My name is Tony j Robinson and welcome to the Real Estate Rookie Podcast, where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Now guys, our guest today took action to start her own real estate business with only $150. Yes, you heard that right? 1 5 0. And she decided to go all in on a vacation rental management business, which she actually started by accident. So today we’re going to learn how to scale a successful vacation rental management company. What kind of services should you offer, how you can actually stand out from your competition, and just an overall blueprint of how to get started. So Brittany Haley, welcome to the Real Estate Wiki podcast.

Brittany:
Hey, Tony,

Tony:
Super excited to have you here.

Brittany:
Thank you. I’m really excited to be

Tony:
Here. Now you’ve got a really interesting backstory, but I guess maybe where we can start is how did you discover Vacation Rental Management?

Brittany:
Yeah, well, it was really by happen chance, and like you said by accident, how I came upon it. So my husband and I moved back to Denver after living abroad for about a year and a half, and we decided that Denver just wasn’t going to cut it anymore after a year and a half. Denver went from zero to Hero when after we had left. So we randomly came across the Aspen Valley while looking for a wedding venue and the scenery and the people, everything just captured our hearts in this area. So we moved to Carbondale and it’s a little town of about 6,500 people and it’s 30 minutes outside of Aspen. So we knew we really had to get creative to make things work here. And the best way to describe this valley is the billionaires are pushing the millionaires down valley. So the market is just really flooded and has become really expensive.
He got a job working for a tech startup and I started working for a wellness company and we both made 50,000 a year, which was not going to cut it here. So to be considered low income in this valley, it’s making anything under 110,000 a year as a couple. So that kind of just gives you a perspective of the lovely money that runs through here. So we met a really great couple when we were staying out here, kind of planning our move. We stayed in their Airbnb and it was a mother-in-Law suite of their home. So still connected to the house, but at a separate entrance and completely locked off. And they kept telling us they wanted to sell the house and they wanted to go travel. We were like, we just did that. We would like a home. We would not like to live out of a backpack for a while. And so we asked them what their mother-in-Law Suite made on Airbnb and they gave us the numbers and we were just super shocked at what a tiny 400 square foot mother-in-Law Suite could do. It could almost pay for our whole mortgage. So we went through the process of getting a loan and Wells Fargo was basically like, well, you are at the very top of your debt to income, so go for it, but you guys are complete idiots.
So in nicer words, that was basically what they said. We bought it with our hard earned, we’d been saving up, we were able to do 5% down and bought our first house. And before we even moved in, we got that Mother-in-Law Suite listed on Airbnb, totally decked out, and we needed the money immediately to make this work. And I did everything for this rental. I baked fresh bread for every guest, Susie Homemaker right here. I gave them eggs from our chickens. I cleaned the house at lunchtime at my nine to five job. I would come home, clean the house, rush back to work, and pretty soon it was the highest rated home in the Carbondale area, and it was rented 98% of the year.

Tony:
I bet. I mean fresh baked bread and fresh eggs from the chicken. I’ve seed a lot of Airbnbs and I’ve never had the combination of both. I’ve seen one or the other, but never both of them in the same place. So you guys run with this thing and it seems to do incredibly well. I guess the question is, are you able to, because the initial goal was like, Hey, can we at least cover a portion of our mortgage? Were you able to accomplish that?

Brittany:
We did. So we grew it and were able to outdo the numbers that our friends were doing and slowly through pricing strategies and just getting to know the Airbnb market a little bit more, and the fact that this area has grown exponentially since 2016. So yeah, we were able to cover the mortgage pretty soon, just a hundred percent

Tony:
With that one Mother-in-Law Suite. Yeah,

Brittany:
With a 400 square foot mother-in-Law Suite. That wasn’t that great. Just the setting was beautiful.

Tony:
Yeah. And what’s the square footage of your entire house?

Brittany:
I think the about 2,500. So we lived upstairs, so it was like the noise transfer was kind of odd sometimes. My husband and I had a couple whisper fights. We’re like, don’t disturb the guest.

Tony:
But I asked that question because we’re talking about 400 square feet out of 2,500, so less than 20% of your home is covering the entire mortgage, which is insane. So you guys crush it with this first mother-in-Law Suite. At what point do you decide to take this kind of side hustle and turn it into a full fledged business?

Brittany:
So my husband kept telling me, Hey, you’re unnaturally good at this and you should try to do this for other people. And I just was not in the mindset. I didn’t have that big picture in mind, and I was like, those people are my competition. Why would I help anyone else? It was all about the nine to five and then just covering our mortgage. That was my goal. So we started a family in August of 2018, and I planned to take my three months of paid and unpaid maternity leave and then go back to work. That was just my goal. I loved my job, I said, and two days after giving birth to my first son, a friend of a friend texted me and said, Hey, do you want to manage my place? And he owned a large beautiful estate like five minutes away from me that had multiple units on it, and he was thinking about renting out his little casita on the property, and he just lived all the way across the US and he’s like, I can’t do it myself. I see from my friend that you’re doing a really good job. Do you want to take a shot at this? And I’m like, let me be able to walk again after giving birth, and sure, that sounds great. And my husband’s like, you can’t pass this up. We’ve got to start thinking bigger. So we got home from the hospital and threw together a basic,

Tony:
Oh, you were still at the hospital when you were texting him about this? I

Brittany:
Was still at the hospital, yeah. I’m like, oh my God, I signed this. My husband was able to come up with this really basic rental contract that we had him sign. I didn’t know contracts very well or anything, and he did. And so he threw this together, the guy signed, and right before I finished setting up the house, I have my son strapped to me and I’m trying to fold towels and do all this stuff. I come down with this, I start feeling very odd, and it turns out I had an infection and I like so many new mothers do, I completely tried to ignore it. I’m like, it’ll go away. Well, then I almost went into sepsis, and so I was rushed to the er and I spent three days in the ICU with my new baby and all in the middle of trying to set this rental up and become a new mom.
So my husband kind of stepped in and was like, look, I’ll fold the towels and put all this stuff out. Just get better. And so finally I got home from the ICU and I listed the house and it became so popular. It was just, once again, not even a full kitchen. It was a connected, hence Mother-in-Law Suite or a DU, but it had beautiful views and the people just came flooding in. And so I spent my maternity leave snuggling with my baby and then doing my rental as well as this guy’s rental and basically trying to figure this out because it’s not very intuitive. And as you know, there’s a lot of ins and outs of the business.

Tony:
Yeah, there’s definitely lots to juggle and kudos to you for doing this almost immediately postpartum. I can only imagine how challenging that must have been, but so you have your rental that’s up and running, do an incredibly well, you take on this other French rental, that one crushed it from day one. So is it at that point where you’re like, Hey, I want to do this full time, or I guess what gets you to the point where you’re like, Hey, I’m going to go all in on this business. It’s

Brittany:
Like to say, I basically built this business when my kid would take a three hour nap, I would just sit on my computer being Googling how to start a business and dealing with other people’s money and taxes and account set up and guest management. That’s where it became really tough. I had it for myself. That was fine. It was when I was dealing with other people’s money where it started to get more complicated. So then my maternity leave came to an end and I went back to work. And childcare in this valley is so difficult. We were on a waiting list for a year. We had nothing, so I couldn’t find childcare, and I joined up with a friend and did a nanny share, but it was only four days a week that we had care. So I guess my nine to five really didn’t like that because I came back, was like, I can only come back four days a week because I don’t have childcare.
And they cut my benefits by 20% for that one day. So medical, dental, everything was cut, DTO 20% done. And then I went from a management role to clocking in and out for $25 an hour. And so I’ll break it down for you if they thought I was a bad employee to start, I became a horrible employee moving forward. I was like, what is this? So my mind space completely shifted after, and the nine to five just made zero sense to me anymore. And I spent the next three months after that happened, focusing solely on my side hustle and just clocking in and clocking out. And then I stood up on a random Thursday and I just had enough. And I walked into my boss’s office and I said, I believe in myself more than you ever will. And I quit. And I just didn’t understand why I’d worked my butt off to make the same amount and never really see a significant raise when I built something that made me the exact same amount of money without the need for childcare at the time with a quarter of the effort and with just those two additional units, I was bringing in more money than what I made at work, minus the childcare is paying for.

Tony:
That’s like a scene out of a movie. And kudos to you for having that courage, you said, I literally stood up on a Thursday and walked into my boss’s office and said, I quit. And I think that’s the dream for every person who’s building some kind of business on the side. It’s an amazing story. So I want to give Ricks and Ricks, you’re going to hear an actual blueprint on how to build out this business for yourself. So maybe you can have that Thursday afternoon where you walk into your boss’s office and quit. But first we’re going to take a break and hear a word from today’s show sponsors. Alright, so we are back here with Brittany Haley and Brittany just kind of broke down how she got started and kind of how she got to the point of being able to walk away from her job. But now what does this business look like today? You started with 150 bucks, which is insane. What have you built it into today and what kind of services do you offer now?

Brittany:
Yeah, so I love to tell people how I started a million dollar rental business with $150. Well, my baby mapped, so now my services today are very different than what I started with. So we have 40 homes anywhere from Glenwood, mostly up to Aspen, and I started with two or three rentals. We now offer full service design and full service vacation rental management. And then just everything I offer is very different from the setup to the actual execution of what we go through with guests to our accounting system on the backend. So it went from zero to hero really quickly.

Tony:
So Brittany, how can a rookie start their own vacation rental management business today?

Brittany:
So the great thing about this business is that you need such little overhead to start. So to lay it out, I listened to every BiggerPockets podcast. I was the biggest fan every day. That was my session. But I made so little money and lived in such an expensive area that I couldn’t figure out how to get out of that nine to five hole and into the investor’s seat. And I finally realized that I could leverage other people’s real estate to do it. And then when that fell into my doorstep, I was like, oh, I could do this. So yeah, we’ve grown pretty much all word of mouth and whenever anyone asks me how I grew so fast, I always would say I just do good work for people. And when you do good work, the word that spreads and the beauty of the Airbnb and VRBO model is that they are your marketing machine.
So you list a house and you get great reviews, they promote you and they pump you up on their algorithm. So when people want to find someone to manage their property in my area, they type in the location and then our homes come up at the top with our logo. So they’re really the marketing powerhouse for rookies. So how does a rookie start their own vacation rental management business? I like to say don’t be shy. And I am the most shy person on this planet, so when I want something, I’m going to find a way to get it. So I would go and talk to everyone. So if I heard someone talking about real estate at a party or at a coffee shop or on the street, I’d just go right up to ’em and be like, oh, what are you talking about? This is what I’m getting into. This is what I’d like to do. I would call developers and be like, Hey, what are you doing? Can I get in on it? I work for free. And so when people know you’re interested, they start bringing you into their projects. And then I just became an expert in the market on the side. So the more rentals I got, the better I was at pricing them and knowing all that stuff.

Tony:
I guess one follow up question though though, Brittany, you said that you were reaching out to developers and other folks who were professionals in the real estate industry, but what were you actually saying to them when you were reaching out? How were you integrating yourself into their network of people? What were you offering to them to be of value?

Brittany:
Yeah, I mean, a lot of these developers have large homes themselves or just know everyone. So I’m like, Hey, I’m in the vacation rental space. I’m really interested in just everything in real estate. And it didn’t even have to be related to vacation rental management. It was just getting in with these people and then all of a sudden that person has a rich friend that has an A DU that they were thinking about renting out or has a second home or has a third home. So really it’s just when the word starts spreading of what you’re interested in getting into, somebody always knows somebody else that knows somebody else, and that’s when the calls started coming in.

Tony:
Interesting. And where are you meeting with these folks? Is there a local meetup? Are you just knocking on doors? What steps are you taking to actually find those people to connect with?

Brittany:
It was neighbors. My neighbor knew a bunch of very wealthy second homeowners. She would go and introduce me around. It was people I’d meet through my job, people that I just met on the street. It was anyone that I heard talking about real estate. I was up in their face.

Tony:
Maybe try and lay this out for the rookies that are listening, but say you were starting over today and I said, Brittany, you don’t have any of the contacts you currently have. You have all the knowledge, but none of the contacts. How would you go get your first five vacation rental management clients?

Brittany:
So I think that the more that you put it out there, the more you’ll find that people are calling. So can you set up your own house on Airbnb and rent it out occasionally? Can you go camping on the weekend? Can you go to your parents’ house? Can you just get a basic logo and put your own house on Airbnb or VB because they’re going to be the marketing powerhouse and pump you up. So there’s your first client, maybe you can be your own first client. And then from there, create an easy Wix website. I created a super cheap Wix website for like $20 a month. Really beautiful imagery. You can get stock imagery, make it look like you’re more than you really are. And like I said, you can be your own first client.
So after you get your first few rentals, and I like to say that first rental can be your own because the better your rental is on Airbnb or V rbo, people are going to search for it. They’re going to see your logo and then they’re going to search on Google and find your Wix website and say, oh, this girl does this, great. I’m going to give her a call. And that’s what started happening. I just had one rental and I had two, and then I had people renting out and then there was three, then there was four. It just snowballs from there. So you really just need one to get started and then the other people will start coming.

Tony:
And a caveat to add to that though, Brittany, is that you need one, but you’ve also got to knock it out the park with that one. And I think that’s what you did. Your first two, you said immediate became two of the most popular listings within your specific market. And obviously that’s a good marketing tool to have is hey, my listings are the top 1% of the ones that are at least in the size range, right?

Brittany:
Yeah. And that’s what I always say, just ace one thing. So if it’s guest communications do really well at that, even if it’s your own space that you’re listing, you’ve got your logo on there so other people are seeing it. And then if you’ve got all five star reviews, that’s all you really need, then other people are going to start calling you because they think it’s a company representing this home. And then that company that leads you to your website,

Tony:
You said something important there. You said just start with the guest management piece and you talked about what your business looks like today where you’re offering full service design and install and all these other things. But I guess what services should a rookie offer when they’re first launching that management business?

Brittany:
Focus on one thing and it’s guest management because the reviews are going to be what catapult your business. So if you just focus on guest management and you get really, really good at it, then you can start adding in little things here and there. We are consistently growing. I mean, just this year we’ve probably grown more this year than I ever have five or six years ago, and I’m not in the beginning or I’m not even in the beginning stages anymore, but you just need guest management to really get a leg up because that’s what’s going to get your first, second, third, fourth rental. And like I said, the Airbnb and VRBO, they are your marketing powerhouse. So if somebody sees you, they see 25 star reviews, that’s going to be the place they book, and that is going to be what gets you to the top of the algorithm.

Tony:
So guest management, so maybe break that down for folks who aren’t super familiar, how does that differ from full service management?

Brittany:
Yeah, so really it’s just your communications that you have with your guests. So when they check into a house, make sure it’s super clean, make sure it has, I don’t know, a small bouquet of flowers or a little gift basket with a personalized note. If you’re in the area and you’re working on doing this, there’s a ton of small personal things that you can do so that when a person checks in, they say, wow, this is a great fruit of first impression, or this is a great home that I’ve on a real gem. And that’s what I did with my fresh baked bread and eggs. People just, they loved those little touches and it was, like I said, it wasn’t that great or spectacular or luxury of a place, but I made the personal touches and communicated with my guests flawlessly, and that’s what earned those five star reviews.

Tony:
Now, one of the other pieces, so it sounds like, and maybe let me get some clarity here. So when you say guest management, you’re truly just doing the interaction between the guest and the listing, but say if there’s backend issues around, I don’t know, managing the cleaners or there’s a maintenance thing that needs to be handled, you’re saying initially maybe don’t worry about those pieces to let the owner take care of that part?

Brittany:
It depends on what your agreement is with the owner. And I think this is where we get into the difference with CIA rental management, and I have never been co-host, only been a vacation rental manager, and really guest management, I view that as the full check-in checkout process of a guest. So if something happens during the guest stay, it is your job to make sure that that thing is fixed and it’s fixed quickly. So I view that as a whole bundled experience.

Tony:
And we were talking about this with our producers before we started recording, but there is kind of a difference between a property manager in the short-term rental industry and a co-host. Vacation rental management has been around way before Airbnb and VRBO as long as vacation rentals have been around. But the term co-host is more of an Airbnb phrase where Airbnb kind of coined this phrase where if you want someone to help you with the guest communication side of things and maybe some other smaller tasks around running your listing that would technically be a co-host. But now you’ve seen those phrases just blend together. Those terms blend together where people call themselves, but they still do everything. Or people call themselves a management company, but they only do the first 10%. I think that’s evolves business model where they call themselves a vacation rental management company, but I think they only do the front end of the guest communication. Is that correct? Have you heard the same?

Brittany:
That’s correct. And that’s really where I’ve seen the process fail. And I’ve always said, I do not believe that the National Vacation Rental Companies work as a business model because I am the heart of this company. I know everything about this valley, I know everything about this market. I really think you need that person running the operations. And that’s where I think that national companies, they just don’t have that. And yeah, evolve is, I view that as there’s too many hands in the pot, so it’s like they can do their areas so well, but then the cleaning team fails because the homeowner had to get the cleaning team and they didn’t schedule it, and it’s like, just have one person do it.

Tony:
So you bring up an interesting point, right about the big national vacation brands, and there’s a few of them out there. A V and VA CASA are probably the two biggest ones, but there’s also Avant Stay is another big one. And there’s another one I just heard of recently that Porto, which I think is VC back. So there’s a few of these big ones popping up. So I guess how can you as maybe the small, more local vacation rental management company compete with some of these bigger brands that have the marketing budget to do all of these things? It might be more difficult for the person with 150 bucks to start,

Brittany:
Tony. It’s very easy to compete with them because they don’t have the heart and the staff and the boots on the ground and they don’t have that drive and that knowledge of the local market. So those companies are here and the homeowners that have hired them all leave to come to me. So right now we have about 50% new homes that get set up that have never rented before, but 50% of the people that come to me are all from those big national companies because they have a poor experience.

Tony:
I was listening to a podcast, I can’t remember which one it was, I was trying to look it up, I think it was Vacasa, but they said that Churn has been a big issue for them. So churn is like what percentage of their customers are they losing on a year over year basis? And I think a big reason is that they, they’ve lost touch with the owners and they’re so focused on maybe the growth and the scale that they’re not providing the level of service that people were hoping for when they signed up for that. So it’s almost like we always joke, it’s like if you’re a contractor and you just pick up your phone, you’re already in the top 1% of contractors that are out there because no one else picks up their phone. Very similar thing on the vacation rental management side where it’s like if you can just give your owners a good experience, well now you’re already in the top 10% of that because a lot of these big brands aren’t doing it anymore.

Brittany:
I completely agree. I mean, the reviews that the large national companies have in this area are so poor, and it’s all what you’re saying, bad communication came in and there’s a lot of miscommunications and the place wasn’t clean or it just felt very generic. So I think that goes back to what we offer, and I call my company Boutique Mountain Homes because we offer, we don’t just take on anyone. We offer a very boutique experience. And I think you have to know your market and know the people that are coming in and visiting, and that’s what people want. So they don’t just want one of 50 really rundown condos that are skiing, ski out. I don’t really want that. I want the really well-designed unique place that maybe is ski and ski out, maybe it’s not, but it’s offering a boutique experience in one way or another. That’s where you set yourself up as different in the market.

Tony:
You talked a little bit about the additional services that you offer now. I guess how can someone maybe create multiple streams of income, aside from just the property management fee? What are some other additional ways that you generate revenue within your business?

Brittany:
So after you’ve mastered the skill of guest communication and have a few listings under your belt, it’s really how I felt was it was time to scale. And so we really try to, going back to the property management thing, we really try to separate what we do from what a property manager would do. Part of this is because property management’s a really tough job, and I never felt I could handle both. So however, you inevitably become a property manager in this vacation rental role. So whether your contract says it or not, you build in an hourly charge for your clients to recoup this time. And so for instance, let’s put it this way, I have homes that never have anything go wrong with them. They’re like these magical unicorns where I’m like, how does this home never have any problems? And then I have these beautiful homes.
I mean, it could be a huge estate and something is always going wrong with ’em. I don’t know why or what, but if you don’t have that hourly property management charge built into your contract with the homeowners, that’s where you’re going to lose a lot of time and time is money. So if you are renting both of these properties, the one that’s the unicorn and the one that has nothing or has everything go wrong with it, and you’re making the same amount of money, which place are you spending more time on? The one that always goes wrong. So build in these additional streams of revenue. Every time you have to call a contractor, we charge a fee. So there’s a leak under the sink. I call a contractor. That’s one small charge. If the leak turns into a large flood and we have to physically go to the property and see what’s going on, need a plumber clean up, that’s $50 an hour. So these, that additional stream of revenue with these property management jobs that you’re inevitably going to do can really help you recoup some money from all the time you’re spending on ’em.

Tony:
So you have your flat property management fee, and then in addition to your fee, if you have to call out a contractor, there’s a project management fee almost that you’re tacking on top of that. Am I understanding that correctly?

Brittany:
Yeah, that’s correct. So we have a flat commission where it’s like your gross bookings, we’re charging X percentage and it’s all based on your market. And then, yeah, if we have to do anything property management wise at a house, that’s when we’re charging that extra fee. And that has helped us recoup so much time that we’re spending at these properties.

Tony:
Interesting. Do you get any pushback from owners on that additional fee ever?

Brittany:
Oh, yeah. All the time. But I think that that’s also the setting up of expectations, and we have diagrams because nobody reads anything. I send this diagram out to every person every single week, here’s a reminder of the contract you sign, this is what we do. This is what’s extra money. And I explain it to them as we have houses where we never have to go to, we never fix anything. The homeowner has it all, and that’s great. They can do that. We report things to them and don’t charge anything. But if they say you go out and hire the person and do that, that’s opening you up to a lot of liability too, so you better be charging for it.

Tony:
Interesting. I don’t think I’ve met another PM in the vacation rental space that’s set up their fee structure that way, but I do like it because it kind of balances out some of the ownership that the owner takes over some of these issues and just making sure that things get resolved. Because I guess if they have to choose between truly fixing an issue or just like a bandaid fix, if they know that you’re going to be the person who’s always doing the bandaid fix, then maybe they’re not super incentivized to actually fix the root cause. But if they know that they’ll get billed every time you have to fix it, then maybe they’re like, Hey, let’s just get it taken care of from the beginning. Right. So

Brittany:
Let’s just get it taken care of. Yeah, yeah. I mean, we’ve had entire heating systems go out and you have to have spend hours there delivering heaters and this, that’s just more than, that’s like your house. That’s not really us getting a guest in. I always say it as there’s a lot of full service vacation rental property management companies, and they charge 50% whether your house has things to go wrong or not. So I’m charging half of that, and if something goes wrong, we’ll charge you accordingly.

Tony:
Now I want to get into a few more of the fees and other income stream you’ve built around this business, and I also want to know what your team looks like. I know you said you’re up to 40 listings now, so I would assume that maybe it’s more than just you today. So we’ll get into all of that after a quick word from today’s show sponsors. So we are back with Brittany, and she just broke down a fee structure as a short-term rental manager that I haven’t heard before. So I guess, what are some other additional income streams you’ve been able to set up with inside of your vacation rental management business?

Brittany:
So one of them is in-house design services. And this is key because I mean, we’ve had people that come with us that come to us and I walk into the house and there’s a couple ratan chairs and a futon and a bunk bed, and they’re like, go lift it. I’m like, oh my God, God no. So the person I’ve hired for this doubles as what I call a property success manager. So she’s doing property management esque tasks, and then she does full scale design services as well. So I don’t have a designer that that’s all they do. I’m using employees multiple talents so that they can kind of flex between each job based on the season and what they need to do. So she’s full service design. So we have a client come in that has a completely empty house, and they say, I live in Florida or New York, I can’t do this. She puts together a mood board for them, and once that’s approved, she goes out, puts together a budget, we get a check for that budget, and she goes and designs a whole house start to finish with a renter in mind. And that’s kind of how we sell it as you can pay twice as much for a normal Aspen designer, but they’re also not coming at it from a rental perspective. So everything’s very rental friendly and guest friendly, and it has all the amenities we already recommend.

Tony:
Now, do you also do the install of that furniture as part of that design fee, or is it just the actual hey, picking the furniture? Yeah. Okay. Because that’s a big thing as well, because a lot of designers will do the virtual design, but it is becoming, I think a more in demand service to do the install as well, because the owners maybe don’t want to pay for or coordinate someone building all the bed frames and tell ’em where to put everything

Brittany:
And have different fees for those too. When my employee, Heather is picking out furniture and doing design work, she’s charging X amount, and then when she’s actively on scene with a handyman or somebody else, she’s charging that fee. So also know what to charge, but it’s a great additional source of revenue we found.

Tony:
Interesting. So are there any other revenue streams that you’ve added into your vacation rental management business?

Brittany:
It, so credit card processing is really tough to get around, and Airbnb does it as that 3% charge that they put onto hosts, and then the, what was it, 12 to 15% that they give pass on to the guest when they book. That’s a way for them to recoup their charges for processing fees, dealing with chargebacks, dealing with all the nitty gritty in their staff. So we said we need to charge that as well for processing and for website management. And we’ve also made that as a slush fund for legal issues that could inevitably come up. So every time somebody books and we process their credit card, we charge a flat fee, a flat percentage of that booking that helps us deal with things like chargebacks, deal with the credit card processing fees that are frankly really high now, and it just helps us create that additional stream of revenue. So we have that. And then also on the Airbnb side, we charge an Airbnb processing fee as well, because as you know, sometimes Airbnb is not going to side with you, and we always have to take the hit if they don’t agree with the additional cleaning or this and that. So it helps us deal with those kinds of excessive charges as

Tony:
Well. So Brittany, is that a fee that you only charge on direct people who book direct, or have you found out a way to do that through the OTAs as well?

Brittany:
We do it through anything VRBO or any of the subsidiaries because we’re running the credit card. So once you become a property manager on VRBO, you’re running the credit card and that opens you up for chargebacks basically. So we do it for anything that we’re running the credit card for as well as a smaller amount for Airbnb.

Tony:
Well, you’ve really found a way to optimize all the different revenue opportunities within this business. I love hearing that. I guess, what does your team look like today? Because curious, right? You said you’re at 40 listings, I, I’m assuming maybe it’s more than you right now. So what does that team look like today?

Brittany:
Yeah, so my husband actually just joined the company about eight months ago. He was high up in the digital marketing tech space, just not really loving his life, but he is really good at spreadsheets, bless him, and he really good at kind of the financial management thing. He managed big budgets for large outdoor brands for so long, and one day he was like, I’m so unhappy, and I said, I could really use you. So he jumped ship and it was one of those, I believe in myself more, and he came on and he does all the financial management now, and it’s so great because I was missing some really big things. Then we have a property success manager. She is in charge of the success of all of our properties as well as the design services. We have a customer experience team lead, so she’s kind of the manager of then our client or our customer experience advocates. So we have three customer experience advocates and our team lead, and then our property success manager, our CFO and me. And then we outsource all of our cleaning as well as our bookkeeping currently. That might change. But yeah, so we outsource some things and then we have a very dedicated, hardworking team that works directly for the company.

Tony:
As a Ricky who’s looking to build this business out, who do you think that first hire should be? Or maybe what tasks should they be completing?

Brittany:
So I truly believe you should know your strengths and weaknesses. So what was really bogging me down was the guest communications. So my first hire was somebody to take on the communications. It’s really like I said, what will free your time up and what do you enjoy doing? I did not enjoy after a while dealing with guests, and I knew I had to get that off my plate. So what can free up your time to scale? And for me, that was guest management. And then after that, it was the financial side of things. That’s not my strength. So getting someone to handle the freed up my time greatly. So it’s all about freeing up you, the business owner’s time to really scale the business and focus on what’s going to get you to that next property.

Tony:
It reminds me, Brittany, of a book that I read recently, and it’s kind of blown up in the entrepreneurship circle, but it’s a buy Back Your time by Dan Martel. Have you read that book? I

Brittany:
Haven’t read it, but I will now,

Tony:
Very similar concept to what you just said, where when you’re looking to hire someone, it shouldn’t necessarily be for at least as a small business owner, it shouldn’t necessarily be for a specific title, but it’s how do you start buying back your time and letting these people do the things that aren’t the highest and best use of your time and aligns perfectly with what you just said. And we try to replicate that in our business as well. So I guess one last question that I have for you, Bri, before I let you go, and this has been an amazing conversation. I hope that we’ve inspired a lot of folks to kind of go down this path as well. But the tricky part of being in property management, and this is true for short-term, long-term, midterm, whatever you want, is that you are sum up between a rock and a hard place because you have to keep your guests happy, but then you also have to keep your owners happy. How do you strike that balance, Brittany, between keeping your homeowners happy and keeping your guests happy? So

Brittany:
I think that what’s important to know, and I learned this unfortunately later in the game, is who is your client? Your client is the homeowner. Your client is never the guest. So it’s an art, like you said, being stuck between a rock and a hard place of you want a good review, but also if you don’t have a house, you can’t host anyone. So the positive relationship with that homeowner is absolutely key. So knowing that the homeowner is your number one client and number one priority and delivering their wishes is what you should do. At the same time, knowing how to get a bad review removed and knowing the OTAs inside and out is key. So we view Airbnb as almost like an art. Working with Airbnb is an art. We know everything about that platform and we know how to get a review removed. We know how to bait a guest so that we can get the, and I know Sarah is an expert on this,
What to say, to get someone to insinuate that they want money to have their stay better. You really have to know these things. So knowing your platforms, knowing how to work in them, and then treating your client as a friend and being honest, that’s always what I say, is if you want to build a good successful business, just be honest, because that’s how my business has grown too, is the other people out there in this space in my market are very, very dishonest, and I just operate an honest business, and if I make a mistake, I apologize and pay for it. And that has made me grow tenfold.

Tony:
So Brittany, I think here’s the big question that everyone’s probably wondering, right? So you started this business with $150 insane. What kind of revenue do you project this business will do maybe in the next 12 months?

Brittany:
In the next 12 months, we’re hoping for one to 2 million in revenue.

Tony:
That is insane. And you say that with a straight face, but that is a major accomplishment and something you should be incredibly proud of to go from unhappy at your day job to within just a few short years building a multiple seven figure business with a $150 initial investment. So kudos to you because as someone who’s also in this space, I understand how taxing it can be at times to try and grind it out and grow something like this, but you figured it out. So I guess last question for you, Brittany, before I let you go. For someone who wants to follow in your footsteps, go from one 50 to 1 million. What are some blind spots someone should know before just jumping into this business?

Brittany:
I think a huge blind spot is knowing your strengths and weaknesses. Like I said, I know nothing about bookkeeping and I thought I could keep my own books, and within a month I had ruined everything. So getting key people in to help you is absolutely key. I couldn’t read my p and l, so I was missing huge holes in my business. So just leveraging people that no bookkeeping or read up on it. I was making, just last year for instance, I didn’t realize that my credit card processing company was secretly upping my charges and I wasn’t accounting for it, so I didn’t know how to read my p and l, and we were 20,000 in the hole for credit card processing fees. That was not fun. And then just know the space in terms of the products coming on the space. I think that there’s not one product that really encompasses everything to manage your short-term rental.
So I’m talking about the property management software side of things. It’s very piecemeal in this space. And Tony, maybe you feel this way as well with the PMS system that you use. Just really interviewing different software providers and getting into the weeds of what are they going to provide me? Are they going to charge me commissions on my bookings? A lot of ’em do, and that will cut into your revenue. That was the $150 that I invested in the business was to my property management system that freed up my time so much and allowed me to expand and splatter my listings across multiple OTAs rather than just Airbnb. And I did that with 150 bucks, and that made my life so much easier. So really getting to know the different softwares in the space is key as well, and can be a huge blind spot if you choose the wrong one.

Tony:
Well, Brittany, I very much enjoyed our conversation today. And again, congratulations to you for building this successful business and embedding on yourself. And I truly hope that the folks who are listening to this can have that Thursday afternoon where they can walk into their boss’s office and say, you know what? I’m over this. I’m out of here. I feel like I can do better about myself, my, yeah. Well, Brittany, I appreciate you coming on. For all of our rookies that are listening, we’ll put Brittany’s contact information in the show notes for today’s episode. So if you’re listening on the Apple Podcast player, check there. If you’re on YouTube, check the description. And guys, look, wherever you’re listening, please do subscribe. Follow. When we get more engagement on these platforms, it allows more folks to reach the show. And that’s our goal here at the Real Estate Rookie Podcast is helping more people just like Brittany, because we want more success stories. We want more people who listened. We can then bring back on the show to say, Hey, here’s what the Rookie podcast helped me with. Well, Brittany, thank you again for coming on. We really appreciate you taking the time today.

Brittany:
Thank you, Tony. It was a pleasure.

Tony:
All right, guys. That is it for today’s episode, and we’ll see you guys back on the next real estate rookie episode. This BiggerPockets podcast is produced by Daniel Zarate, edited by Exodus Media Copywriting by Calico content.

Ashley:
I’m Ashley. He’s Tony, and you have been listening to Real Estate Rookie.

Tony:
And if you want to be a guest on a BiggerPockets show, apply biggerpockets.com/guest.