Andrew's journey in the realm of real estate began with a single duplex and a fervent vision to create something monumental. Through unwavering dedication and strategic property acquisitions, Andrew has meticulously transformed this vision into reality, steadily expanding into a notable hospitality brand.
Andrew's journey in the realm of real estate began with a single duplex and a fervent vision to create something monumental. Through unwavering dedication and strategic property acquisitions, Andrew has meticulously transformed this vision into reality, steadily expanding into a notable hospitality brand.
All right, everyone, welcome to the Real Estate Game Changers show. I'm your host, Mike McKay, based in the Jacksonville, Florida market. And each and every week we do this show with people who are changing the game of real estate all over the country. And anyone in the Jacksonville area, if you're thinking about getting into real estate, wholesaling, buying off market properties, we are currently hiring salespeople to help us acquire more properties reach out to me on Instagram. If that's something you're interested in, you can just send me a DM. And this week on the show, we have Andrew Puckshavinsky. Andrew, welcome to the show.
Andrew:I'm ready to rock and roll. I'm excited to dive in and share a little bit of our story.
Mike:Cool. Let's do it. Maybe for the people who don't know you, if you could give us just a little bit of background about how you got into the real estate business and where your business is today.
Andrew:Yeah. So I'll try to give you the spark notes version. Me and my now wife met and we bought our first property in 2019 I believe. And it was actually a duplex. So that's how we got into the real estate space. It was really great because whenever we had first met, we were both reading real estate books and had the same interests. So it was much easier to Do everything as a team, not only have the dual income to buy the properties but also have a shared vision with that. So we bought our first property 2019. We didn't do much for that first year because I was still working a corporate job. I've done software sales for a technology company. I was working for a marketing company previously before that. So we're just enjoying our time together. And then we came to visit Northeast Florida. So Melody, she she used to be a property manager for a commercial broker. So he had commercial properties in Flagler County and then also in St. Louis. So we came down to visit, we stayed at one of his beachfront homes and it ended up. Being not that great of an experience'cause it was managed by a nationwide company. So whenever you get to thousands and thousands of units it's really hard to keep that quality whatsoever. So from that point we stayed at that property. We told him about our experience and he was just like, melody, you already managed my commercial properties. You guys should just start a vacation rental management company. So we did on a whim at that time because it was one of those situations where. We went into that, we already had rental properties, we were already managing our own properties, and we thought, I think we can put out a better product. I think we could probably do this a little bit better. Not like it was arrogant, but we just had the background in real estate already, and it's something we were passionate about. We were both operators. So from that point, we sold all of our properties in St. Louis. We reallocated that capital here in Jacksonville. So we started with our own properties. We were self managing those. Then we began to build the brand out. So from that point, that was the genesis of Joseph Ellen Properties and Joseph Ellen Design. So we went from just the properties that we had. And I actually believe we got our first management contract in June of 2021. So I think we're right around three and a half, four years. And now we have about 60 million under management.
Mike:Wow, and then as you guys were growing that along the way, just from managing your own properties to, starting to take on other people. There's usually a lot of challenges that you run into along the way. You want to share maybe a couple that happened at the different stages of scaling and how you overcame them.
Andrew:Yeah. That's, that can be such a detailed question because we've had so many mistakes and I think in our space, especially as quickly as we, we set to grow and we scaled You have to really fail quickly and figure out what the issues are and then get to the next step so you can continue to grow. We were lucky that we had a shared vision and we knew where we wanted to go and what company we wanted to build. So whenever we had these little hiccups we knew how to get over those challenges. Although, like in the time it was a little bit trying, obviously there's been some tough situations. There's been situations where we've had. Technology changes. So especially in the short term rental space, you start with a management system. It's the hub in your entire business. So we started with one that was a little bit smaller. It was for tiny operators starting out. We then grew to more of an enterprise level company. And we made a technology change around like 120 properties. And there has been times where, I got the reporting wrong on our property management system and we were taking like a 30, 000 loss per month for probably about 90 days. So like we've had a ton of hiccups, but it's been really great that we've been able to do it together, my wife and myself, so we can figure out what we're doing wrong. You have that support. And then you go to the next thing and continue to grow.
Mike:Yeah, what are some of the challenges you faced outside of switching over property management systems?
Andrew:It's just, um, it's very time consuming. So like, whenever you first get started. Like going from startup to where we are now. And I would say we're still a startup. Like we're three and a half, four years in. But now we've gotten to a point to where we're very dialed in. Like we got the team, we have 30 cleaning teams in house. Like we have everything dialed to a tee. But whenever you're first starting, like you don't have the revenue. to have the team or have the admin. So whenever we were in the very beginning, we're picking technologies. Like I had that background in technology. So it was a little bit easier for me to build our tech stacks out, our softwares and our systems. But for example, if I were to do a software change now, I not only have virtual assistants, I have a chief of staff. So I wouldn't really be doing that stuff back then, whenever you're starting in the business, it's always challenging until you get enough revenue to hire, because Your marketing, your HR, your sales. And then you also have to go swap out a doorknob or make sure that trash isn't full. So like we've been through all of that stuff. I'm so thankful that we've grown now to where we have such a deep team to where we can delegate a lot of that stuff out and offer a better service. But dude, it was It was a grind in the beginning and you know how it goes, like especially the first two years, you're doing everything yourself trying to, get the ball off the ground because you don't have the capital to hire, a team of 15 or 20 people. So that was definitely a big challenge.
Mike:Yeah. And I, you mentioned something there, like you guys have about 30 cleaning teams in house. I know that's at least when I was in the STR space, always a debate. Should you bring that in house? Should you outsource it? Use cleaning companies, individuals. What made you guys decide to bring that in house?
Andrew:control primarily. I think especially, in our size, if you have a couple of properties, it's it's very easy just to use a different company. And but in our situation, we know that we wanted to continue to grow. So I want to have as much control as possible. So if you have a company that has employees and they're just getting a paycheck, if somebody checks into a property and there's a hair on the bed, or, even in the turnover space with your. Flipping or whichever that is, and you're doing a turnover and there's an issue and you need to send them back right now because that's not an acceptable product to put out. They're not as receptive if they don't actually work for you. So we thought it was a really good play to bring everything in house with our team because we want a little bit more control over what we were. Kind of offering as a product and cleaning is, as like a huge part in the short term rental space. It's really like the core of our business. Everything starts and finishes with that. So it was huge for us to bring that in house. We do that with all of our teams though. So like we have, now we have virtual assistants that are technically like independent contractors, but we have our maintenance teams in house. We have our cleaning teams in house and it allows us to. not only control costs, which is important in our space and especially at our scale but also to control quality. If there's an issue, we can send somebody back. If there's an issue, we can train our team on that stuff and they actually receive it well because they're on our team. It's not like they're working for Sarah, who's their boss of another company. And then there's 15 employees underneath them. So we try to have as much control over the process as possible because as property managers or even in real estate, there's so many things that we can't control. Like I can't control somebody booking the property. You can't control how, some things turn out with a flip or a wholesale deal or even buying rental properties. So we just want to try to control some of that stuff and have a better outcome on the backend.
Mike:Yeah. And what kind of like procedures do you guys have in place to especially with cleaning to keep that kind of like quality to the level of guests are expecting?
Andrew:Yeah. That's another thing you were talking about, like the journey and the mistakes that we made. We had to build out SOPs over time because what worked really well for us, like at a hundred properties doesn't work well for us at 175. So we always have to update those things. And also get to a point to where like you get out of the worker mentality. So I'm just now getting to a point where I can delegate a lot of this stuff out. If I wanted to leave for two weeks, I know our team would make sure everything doesn't burn down. So we're always updating those SOPs and making sure things are, up to date with our processes, but we have a pretty down pat right now. Like we use a couple operations software such as like breezeway to, to schedule everything out. It's pretty dialed into where like We don't have to tell our cleaners when to clean. Like they follow their own schedule. They have a mobile app, they report a checklist and also photos back to us. So in the beginning we're like, you're trying to do all that stuff. You can't necessarily build out all the SOPs because I'm going to make sure trash is taken out, as like a very small business. But now I can build a lot of that stuff out now that we're a little bit bigger and it's helped a ton. So like technology is huge in our space. We use breeze way to manage all of that stuff. We have mobile apps for our cleaning teams, our property management system has been pretty much customized. And so we use hostly for our management system and they've done a lot to customize, it to what we need, especially at our size. But the team members is like the biggest process that has helped with quality. So we've hired like property inspectors to go walk the properties before guests arrive. Those property inspectors report to property managers. Those property managers then report up to me. And it's helped a ton with our quality over the past year or two.
Mike:Gotcha. And what are those property inspectors looking for when they're going out to those properties before guests arrive?
Andrew:Yeah, so they're given like a 50 point checklist. So just like our cleaning teams have to go to a property and run through a checklist, take photos of each room, they know the spots to address in each room. Our property inspectors have the same thing and we want them and I say this all the time. We just hired a new batch of property inspectors the other day and put them through a training. We want them to go into a property as if they're the most petty guest ever. So like you've been in this space, the guests that, we'll give you a five star review no matter what, but then you also have to guess that there is a hair in the corner by the door and they want a full refund and a free week stay. So we train them to go in and we want them to be as petty as possible. If this is out of place, let us know. If this is out of place, let us know. If you feel like a chair isn't aligned to where it needs to be, like, let us know because we're not always going to fix those things depending on what they are, but we want to know so we can train our team about it. So they need to catch everything, but they go through like a, it's probably like a 50 or 60 point checklist with photos that reports back up to our property managers.
Mike:Gotcha. And then that property manager is giving feedback to the cleaning team. We're getting maintenance out there if it's needed, or sometimes the inspector is doing some maintenance on the spot. If it's something quick or
Andrew:Yeah, exactly that. So we train them to where if it's something small that they can touch up or fix right there. Great. If they can't fix that in five or 10 minutes, then it gets reported back up the chain. And then we push that out to maintenance or a cleaning team to go back. Because we also don't want them spending the entire day on, on something that they can't fix or like reclaiming a house when that's not necessarily their job. We need to train the cleaning team to go back and do it better the second time. Yeah, so they're catching stuff. They're trying to fix stuff, but that has been huge in. Increasing our reviews. There was a point where we lost super host status and it's like such a vanity metric, but it's really hard to keep whenever you have a ton of properties. And then we got it back once we put the property inspectors back in place because we were catching everything. There was no guest arriving and the internet's out or hot water's out, or there's a Palmetto bug by the door. We're catching all that stuff before they even get to the property and just mitigate it.
Mike:Gotcha. And are they going out before every guest or is it randomized around?
Andrew:They're pretty much going for everyone now. So we've gotten it to a point where we have I think we probably have five or six property inspectors now. And then our property managers also walk properties as well. Like they have a quota they have to hit whenever it's walking properties. So we're getting pretty good coverage on a lot of stuff, but they're, they're trained to where like they know. Okay. This cleaning team is they're rock stars. Like we don't need to check them as much, but this cleaning team needs a little bit more training. We need to make sure to go to this property today. So it's a lot of using your best judgment as well.
Mike:And then I know one challenge, like when I was back in the business was like, after a while, they're just wear and tear on these properties. When we were doing it, like we, I guess we're the principal on all our own properties. So we would just go and spend the money to repaint it or whatever, fix the wear and tear. But does that present a unique challenge to you guys? Because you're, you are managing for other people where sometimes they might not be so receptive to saying, Hey, you need to spend a couple of grand to paint the place to touch it up.
Andrew:So we, we've been fortunate now. And what I mean by that is whenever you're starting in any business, whether it's property management, anything where you're doing like client acquisition, you got to take what you can get. Like we needed revenue to grow. So you take what you can get. You're stepping on eggshells with owners from time to time. So that's something that we experienced in the first two years. Like it's tough whenever we're trying to grow and I know I need revenue coming in to hire for these roles. So I don't have to go change out locks and do stuff like that. And I can be an operator. So you don't want to make owners mad. Now we've been really fortunate to. Build a brand and we have a really good idea of what books and what doesn't book and like what properties perform. So we make our owners do those updates because at the end of the day, like we're doing asset management and if we don't tell you that something needs to be updated, then we're not doing our job, whether you receive it well or not. Like we are very brutally honest now and if a property is going to perform or. Hey, the furniture sucks. Like it needs to be updated or it's not going to perform. If you want the same results, keep it the same, but here's what we can do with the property. And it's going to perform a little bit better. We've gotten much better with that. And I don't know if it's, we have more flexibility because of our size, but I think we can just be a little bit more honest. And I think I've just grown up as a business owner as well. And telling them that this is what it needs to perform. If you want it to be on our program, these are the updates we need to make. Yeah.
Mike:And then along the way, as you were scaling let's call it around cause there's probably different people listening to show at different points. Let's just say, for example, around the 50 unit mark, were there any particular challenges around that point that you had to overcome or processes you had to redo?
Andrew:But you're just doing everything at that point. And I just knew like even conversations that I had with Melody, I was like, we need to double this or we're going to be, we just got ourself a high paying job and we're just going to work every day for 15 hours. So that, that's the biggest challenge at that size. Like you just don't have the resources yet and you're just like still grinding to get every single client and keep every single client. And it's much easier now. It's 10 X is easier than two X. That's the same perspective with this is it is much easier to run 200 homes than it is to run 50 homes because you have the team, like you have the people's leverage. So that's the biggest thing we wanted to get to. And that's like what we strive for with our growth. So the bigger that I can get with the company. And not like too big to where we lose a personal touch, but big enough to where I can delegate stuff out. And there's people that are better at doing jobs than I am. It's the better product we offer. It's really tough at 50 to a hundred properties because you just don't have the money to hire the team.
Mike:Yeah. What do you think is the turning point? What's the number in Jacksonville?
Andrew:I think it's, if you're. If you're at like 52 to 70 properties, it's pretty easy to keep like super host status. It's pretty easy to keep bandwidth on everything, but now like we have close to a thousand reservations a month, so it may seem like a lot, but it's much easier because I have, two property managers and six property inspectors and 30 cleaning teams. It's easier now that we're a little bit bigger and I think it will get, easier the more that we grow and it's going to come with its own set of but whenever you're that size, it's. It's tough because you need to delegate, but you're doing everything yourself. That, that, that's really the biggest challenge is the lack of revenue. Like it's tough to spend money on marketing. You don't have any, it's tough to spend money on hiring. You don't have any. So you have to do everything yourself. And that's like truly grind mode at that time where you're just still hustling. Like you're not an owner of the business. And that's been our whole point over the past year or so is we want to get to where we're actually like. owning the business and not just working inside the business. So that's that's some of the steps that we have taken, but it's the lack of resources. I think that's the biggest thing whenever you're smaller.
Mike:Gotcha. What are some challenges that you guys face today at, I think you said you're around the 160 unit mark.
Andrew:Yeah. So we have, I think we have 176 or 175. We probably have 11 or so that are our short term rentals and then we manage the rest of those. But some of the challenges we have today is Gosh, I think it's a lot of like ego to I want to continue to grow in scale. So we're looking at two companies we're looking to acquire right now that would add to our inventory. But it's just a different set of challenges. I think more so what we go through now is like making sure our team's happy. Are we paying our team? Are we going to get to a point this year where we can give them benefits and stuff like that? It's more like thinking like a leader rather than the day to day hustle with things because we're just responsible for a lot of people now, like our cleaning teams, our maintenance teams, they're all starting to have families as well. So it puts a little extra level of like stress and responsibility because you have people underneath you that are depending on you to literally take care of their family and pay their rent or mortgage or anything like that. So I think it's that responsibility. And then also just the pressure of continuing to grow. Like I always have that fear, like it's going to be gone tomorrow. And I think that's helped us scale a little bit. But yeah, there's just, there's a million things that pop up on, on any given day. So I'm still really working on delegating stuff out. Like I very much get in my way a lot of times. And I know a lot of owners do that as well, no matter what the business is real estate, just regular business. So that's been my focus over the last couple of months.
Mike:Yeah. And what about, obviously there's been a lot of talk out there about kind of market challenges in the short term rental business. What are you guys seeing on that front?
Andrew:I will say there's not an Airbnb bust. So I will say from my experience, what we're seeing within the data is yes, there is saturation, but a lot of the stuff you see online, if you're not looking at the data, people say, Airbnb is dead. There's an Airbnb bus, like Airbnb is crushing it right now. They're bringing on so many units. It's not even funny. It's such a popular thing. I think it's really become an asset class with multifamily or, other types of real estate that people can sit their capital and there's, There's such a flood of private equity right now in the space as well. People creating funds, they're buying these super properties. They're super cool. But I think that is what is valuable right now. So like just in the Jacksonville market, I think there's probably 6, 000 properties somewhere around that range. And that's not counting like the beaches area. I think probably 40 percent of those, I looked at this the other day or either one bedrooms or two bedrooms. So whenever people have these duplexes or four units or a two bedroom in Murray Hill, and they're like occupancy's falled off. It's not working anymore. Yeah, that's because there's a million of them in the area and it's super saturated. You don't want to update your furniture design. But what we're seeing Cool properties, essentially. And three plus four plus bedrooms with a pool. Like those properties are still crushing it. Like our entire book of business, like we're up 150 percent from last year. So there's not necessarily like a bust situation. There's saturation with bedroom counts. So if I was. Given advice to anyone that's acquiring or even we're looking at properties to purchase. I'm not buying a one bedroom, I'm not buying a two bedroom. I'm like looking at four or five bedrooms with a pool.'cause those properties are killing it.
Mike:And is that at least in Jacksonville, is that kind of all different areas of town or do you guys have concentrations in certain pockets or?
Andrew:So we are everywhere. Like we range from Jacksonville Beach, we go down to Flagler and Palm Coast. I will tell you areas I like I think Springfield's super saturated. I think there's a ton of short term rentals there. There's a ton of one bedrooms and two bedrooms. That's where we're seeing occupancy dip a little bit. Our big Victorian homes in Springfield, they're still doing pretty well. I think the Riverside and Murray Hill area are a little bit saturated as well. I really Mandarin, Orange Park, Joynton Creek with pools. They're doing very well right now. Stuff at the beach, if you bought three years ago or two years ago, they're doing well. Now it's a challenge because I have real estate agents send me properties all the time in Jack's Beach and it's 1. 5 million and they think it's going to crush it as a short term rental. And yeah, it will crush it, but that's in comparative to the debt you have on the property. If your mortgage is seven grand a month, it's not going to do very well. It's going to break even or lose money. so that's something to think about is. That people don't often look into is what's my debt on the property going to be compared to what the nightly rate is because your rental revenue does not correlate with the purchase price and a lot of people think that, Oh, this property is 1. 5 million. It's going to absolutely crush it. Sure. It will, but your mortgage is so high. It's not going to make a difference. Our beachfront stuff is doing really right now. Our stuff in St. Augustine is doing really right now. It's just like the one bedrooms, two bedrooms or like your, it's your properties in Murray Hill that really should be a long term rental. Those are the ones that really should be long term rentals, not like the high end inventory or like the properties with the wallpapers and the putting greens and all that stuff, hot tubs, those properties are still doing really well, especially in North Florida.
Mike:Yeah, for sure. That's funny. You mentioned that I was, went to an Airbnb last time and selling point was sauna, hot tub, pool, lake, right? Those were, that's the reason we booked it.
Andrew:People just want cool shit now and especially like where the economy is, where it is, people are scared to spend money. Nobody's buying anything. Nobody's selling anything, but people will spend money on experience. But they're not going to spend money on a property that gets lost in the sea and the furniture is not great because there's just a million of those. So 24 months ago, you could throw anything up and make a ton of money. Now you just have to actually be a better operator. You need to have better design. You need to have cool amenities at the property. That is what is doing well. And I think if people focus on buying those properties, then they'll see a lot more success. But like stuff that should be a long term rental or a pad split, it should be a long term rental or a pad split, not like a vacation rental. So that's one thing that I would focus on if I was buying right now.
Mike:Gotcha. And then let's say we were talking, a little bit before, like you obviously started the business and still work in the business with your wife. You want to talk just a little bit about, maybe the good sides of maybe some of the challenges of that as well. All
Andrew:Yeah, of course. Hey, it's been a big value add. as well. God, she's, she Whenever we started the business, she was just playing like the design games. And she was like, Oh, I just want to be a designer. She has no background in this. And I think she probably is furnished and designed like 150 homes in the past year and a half, two years. So absolutely on fire. And it's been A really big funnel system into our management business so we can capture them at the very beginning. We have really great relationships with realtors and have cool programs for that. Then they get to the rehab design phase. She tackles that, then we get to the management phase, and then I handle that on the back end. So from like a business standpoint, it's been great. It's Dude, it's good to have someone with you when it's hard, because I don't know if we'd have grown this much or if I could really even do much of any of this by myself. Because being in the short term mental space for a long time, like there's some stressful fricking situations, like calling you at 11 o'clock because you can't figure out the keypad and then cussing you out and it just ruined their experience and this, like those situations happen all the time and you have to get rather unemotional about it. And. In a way care, but also be transactional to where you don't get upset with stuff, but it's good to have that person event with. And I think that's been a really big key to our success because we do everything together and we've been a team throughout this entire thing. Now on the opposite side it's always a challenge cause you're with that person 24 seven. So it's tough to like, when do you turn off business? And when do you like turn on husband and wife time? So that has full transparency. That's been a challenge at times, when do we stop focusing on the business and when do we start focusing on like that side of our relationship? Cause it's, I'm sure you guys experienced the same thing. Like whenever you go out to dinner, like you're talking business, whenever you do lunch throughout the day, you're talking business and it's, that's the stuff we love to talk about and that's what we choose to talk about, but I think we can even do a better job of getting back to husband and wife sometimes. That's always a challenge whenever you run a business with your spouse.
Mike:Yeah, have you guys I don't know any success or advice on that? That things have worked for, it's still a challenge, but, I work with my wife too. So I'm interested to hear just personally your
Andrew:so I don't know if I can give a ton of good advice because we're right under a year still. Our anniversary is coming up, but it's just, it's a process. You just have to really communicate. You have to really talk. And I think it, it's always good to, Circle back to like you have a shared vision and there's a reason why you guys are doing this together because you both have a passion for it. There's tough times. There's been fights that have started just because of the business. I'm sure you guys have had the same situation. And then you're with that person 24 hours and you run the business with them and then you live with them and you're eating dinner with them. There's times where you need to have space for yourself. But again, we couldn't do, or I couldn't do much of this without her. Like we could compliment each other so much. But I don't know if I I can give too much good advice. Like we're still learning so much in our relationship, I think. Cause we've been together for gosh, probably five years. Been married for close to one. So we're still learning, man. Like we're still figuring this entire thing out and how to run a business together. So half the time we were just winging it. So I think we've done okay so far.
Mike:Yeah, there you go. And so you were saying before that like she's designed a lot of homes by that. Do you mean managing like the renovation or just furnishing or both? Or
Andrew:Oh yeah, she does that too. So it started to where she was just doing vacation rentals. She's done a couple of flips that she's designed. She's done a commercial space for a marketing company that she designed. which is a really cool project. And she's done, she's probably done a handful of residential projects. So she's she's done it all because we have a rehab team and we have so many in house maintenance teams and it's it's easy for us to do that stuff. Now we haven't done like full guts. She has actually done one full gut renovation that she she designed, she absolutely crushed it. So that's more her realm. Like I. I will see the property in the very beginning and then I just step in whenever it's all done and then try to take the credit, but it's all her that does everything. Yeah. And she crushes it.
Mike:I don't know how much, about that. I'm sure you guys talk about it a bit, but if you're renovating something with the purpose of making it a short term rental, is there any kind of things that you make sure to do?
Andrew:Guest. So I would say if you're selling something for resale, obviously you want to do things. They're going to help it appraise square footage, bathrooms, kitchens, all that good stuff that you know. Whenever it comes to vacation rentals, like you can almost get away with doing more of a. Cosmetic rehab, but then going all out on the amenities. Like I want the pavered backyard with a beautiful grill and a nice stone fire pit and a putting green. That's the stuff that's going to drive the rate up to where you can have a. Like a cookie cutter, a bathroom and kitchen. And the guest isn't going to be like. Oh, we're going to give them three stars because it's not that high end. Like they want the cool shit. Like they want the amenities. So that stuff where if we're driving like a cosmetic update we're going to put stuff into stuff. That's going to raise the nightly rate, especially like if that's the owners in game, they're going to keep it as a short term rental or a vacation rental. If they have plans to sell it, or even if they have plans to, we have a lot of investors that they'll buy it in cash and they just refinance out. It's a little bit of a different situation, but we still push them to You should put in a hot tub. You should put in like an above ground pool. You should put in volleyball net or a fire pit or a barbecue grill or stuff like that. Because that's the stuff that's going to get you more per night, not necessarily like the chef's kitchen. Although that stuff is beautiful in photos.
Mike:Yeah, and I guess if you have, if there's someone who's looking at renovating, a property I'm sure this might change depending on what area it's in, but how would they go about figuring out the stuff that they should do during the renovation
Andrew:Yeah. So
Mike:rate.
Andrew:yeah. So here's what our Processes with our business. And we're still ways away where I want to be, but we try to be as fully integrated as possible. And we still have other things that we can build out. It's a complete process, but we have a lot of people, especially in the past, like year or two, that would just land through our website. Like we have a decent amount that are here, local in Jacksonville, but we have people from overseas. We have people from California, New York. They just land on a form fill and they're not here. So that's why we built out the design company because they're like, I don't have anyone to update it. I don't have a real estate agent. I don't have anyone to design it or manage it. So we want it to be as full service as possible. So that's, was the birth of design company. And then Melody has her team that does like the updates, the backsplash, the wallpapers, if she has to do it. But we try to be as full service as we possibly can, because we want to keep that person with us and have a good experience from the very beginning. So use our agent. Yeah. We'll help you find the property and then Melody's team will design the property. She'll do the updates on it. They usually, not usually all the time, have a good experience with the design part. Then they go into management and they're already like on a high, they're happy. They know our brand, they trust us. And then that's helped us been sticky on the back end whenever it comes to management clients.
Mike:Yeah, and are you finding now that specific items that you put in these renovations are like specific? Experiences perform better in certain areas in Jacksonville or like, how do you figure out? Okay, I've got a home in Jacksonville beach. I want to boost the revenue as much as I reasonably can for my investment. How do you determine what to put in that
Andrew:their budget plays a big role into it. Like what can they put into it? Like There's clients and partners that we have come on that they have a much larger budget than others. And there's, it's a different, it's knowing the clientele. And it's also like in your space, knowing the seller or the buyer or the motivated seller. Like we have our investors where we Maybe the margins are a little bit slimmer because they're going to refinance out and they're only put an X amount of cash into it. And we have people that are buying a second home and they don't really care about a budget. They want to put whatever they can into the property. So it's a lot with. What is that partner going to want to put in there? We can press them on we recommend to do this. We recommend to do this. But there's always cheaper things that we can do, like a hot tub or, that a wallpaper or, the neon signs and stuff like that. Those are things that we could always put in a property to get more eyeballs. So like with Airbnb and Verbo and all the online sites, a lot of their algorithm goes off of views and clicks. They want to reward people that are clicking and viewing and getting bookings because they make their money off the transactions. So it's just like Zillow. If someone's flipping through to buy a house, they're going to see the pretty pictures. They're going to select the home to do a walkthrough where the pictures look really good and they can picture themselves in it. So that's what we try to translate over to short term rentals because people are just viewing the pictures, they're viewing the reviews and it'll help us rank higher if they're clicking on it and booking an Airbnb rewards us because they want properties. They're going to get booked a ton because that's how they get rich. So they want to make money off the transaction.
Mike:Gotcha. Yeah, it makes sense. yeah, so there's and then like you guys said, like you built out like a lot of systems and processes over the years. If someone were just I don't know, let's call it getting to the five or 10 unit mark. What kind of are some of the first systems and processes that you feel that they should build out if they're managing themselves?
Andrew:Yeah. Yeah. So in our space gosh, I have so many pieces of technology because I love that part of the business like building the systems and processes out. So like we've built our own like KPI dashboards, like we're pretty over the top with it so we can have as much data as possible. But if you're just starting out, you can be relative. We were pretty lean for two years and you don't need, because technology can get really expensive. If anyone ever goes to the conferences, like the short term rental conferences or the VRMA there's so many vendors and so many pieces of technology coming into the space. There's 50 options for just pricing 50 options for guidebooks. There's always an add on. But you also have margins too. So like you need to cashflow on the property. So like you could really get away with. We still just use a Google sheet as our CRM. It's just super detailed. We have someone on Fiverr that really built it out to where it's customizable and pretty. But same thing with like our KPI dashboard. Like I spent 120 for somebody to build us out a really detailed KPI dashboard and they just, they did it on Fiverr or Upwork or some of these freelance sites and they can do a lot of that stuff. But you really don't even need like a management system. Like you can manage a lot of stuff just from Airbnb or Verbo. But even the management systems aren't crazy expensive. So you can get pretty far off like Google Sheets, Slack for internal communication, find a cleaner and just a property management system. Like you can scale to probably a hundred units without a lot of pieces of technology.
Mike:What about you've obviously had to hire a lot of people, um, share a little bit about maybe about your hiring process and how you make sure that you hire the best people for your team.
Andrew:Yeah. We're, um, we're still getting better at that. Cause I'm still learning how to delegate. I'm very much Fuck it. I'll do it myself type of guy. And I'm trying to get away from that as much as possible because there's people that do jobs drastically better than I do. So hiring has been. It's been a challenge and it's interesting in our space because like what I would like to hire is 100, 000 role. That's a GM, but we can't. So we try to, I'm still very much involved in the day to day. So does melody, but we try to hire as many accessory roles as possible. So like our property inspectors are maintenance. And I will say that something that we've been super, super blessed with is, okay. We purposely go crazy on building our brand because those people come to us. So I don't have to search for cleaners. Like I have 10 that reach out to me every single week and then we can really vet who we like. A lot of our cleaners have even our maintenance people and property inspectors. They've been with us since we started the business. So like we've been fortunate for sure to have those people around because that's another thing that's a challenge. We've had, I've had people come from other management companies and they're like larger management companies and they say Oh, they had issues finding a maintenance person. Wherever you can like hop on yellow bird and do a post, you're going to have 50 maintenance people pop out, but it's just vetting who you think would be a good fit. So we're always looking for really good team members, but man, we've been blessed. And I think mainly because we, from day one, before I even built the business, like we were building the brand, like I didn't have management clients and we were building a website, putting out blog posts, but I knew that's what we wanted to do. And I had to build a foundation, but it's helped now because we have people reach out to us. A lot of our really good team members have came from. Like referrals or Facebook groups. I think there's maybe one or two people that we've hired from indeed. Everyone else has been like, Hey, I think this person's going to be a good fit. Or they reach out from a social media post that we put out, or they see our content and they want to work for us. So that's been a really big value add. We've been fortunate with team members.
Mike:Yeah, that's awesome. what about you mentioned moving more into a leadership role what are some leadership challenges you faced along the way? And have you overcome those?
Andrew:Gosh, that's a good question. I think being assertive and handling issues when they happen. So I've always been in a manager role, but I think it's something that I've struggled with where there's sometimes I'm a little bit too nice. To where Melody's the opposite. She's handle this right now. It needs to be fixed. You need to talk to that person. Like you don't need to let it go a week down the road. So that's one thing I'm learning now is if you let issues fester, or if you let things slip to next week, it's just going to continue to grow. It's going to continue to grow. Like you're not able to set really good behaviors and foundation with your company. If. Someone misses a clean or someone overcharges for maintenance, or if a cleaner continues to do a poor job and you just let it go like that, then that's your standard. So that's something I've really been working on is, handling issues right there and not being so nice and addressing stuff because it's almost I've started to learn that I'm almost doing our team members a disservice if I let stuff slide. Because then they're not doing a great job. They're not going to move up. They're not doing the best that they can possibly do. So that's something I'm really still learning about. That melody presses me on every single week. Whenever an issue pops up, it's you need to handle it now. Like you're the owner, you need to address this. So it's always good to have that. person in the back of my ear, tell me things and kind of address situations. But that's probably the biggest thing, man. Like not letting things slip because that's how you do anything is how you do everything. So if we continue to let things like poor cleans go, then that's just going to be the standard. And we can't have that for where we're wanting to go and what we're wanting to grow to.
Mike:Yeah. And you mentioned like you have a KPI dashboard you'd like to look at, like what are some important KPIs that, that you look at on a weekly basis?
Andrew:Yeah, we're, so I'm still finding stuff that we can dissect because I came from a software background where like everything is through Salesforce or HubSpot. Anything you do on a given day is. Documented to a tee your calls for the day, your team's calls, the recordings of the calls, the quality scores, like literally everything. So that's helped a little bit with building our company. Cause I've just stole everything from the companies I've worked for and put them in place in our business and just reframed it to vacation rentals and the real estate space. But Like we have a financial KPI dashboard that shows like our month over month and what we gross, what we net, how many bookings, the margins we make on fees, like all of that on the financial side. And then a lot of the technology we have is starting to kick out data. Like we use key data for a lot of stuff which is like an air DNA, but you put your personal information there for your business and it has like a financial dashboard and how all your properties are performing occupancy rates. One thing that's super important is like booking lead time. And this is all stuff that we've continued to learn over time by going to conferences and, talking with other mentors in the space. Like for example, like booking lead time, it helps you adjust your pricing. So like in Jacksonville, Compared to 24 months ago, like we really get a majority of our bookings, like two weeks out, a week out, three weeks out to where you need to know when to adjust your pricing now, because that's the booking lead time. If you're booking lead times 60 days out, then you adjust your prices 60 days out. So a lot of those things we're still learning in and tinkering with. But there's just, there's so many KPIs in the short term rental space. As so it's hard to find what do I actually use? What do we need to, play with, but also building more out for our team, just see how they're performing, like how many inspections are we doing? How many times did you have to send a cleaner back this week and then reverse engineering that stuff so it
Mike:mm-Hmm. Yeah. And you mentioned a couple times, or during the show, you've mentioned like vision, right? That you guys have this same shared vision. So I'm curious to hear like what is your three year vision?
Andrew:Oh yeah. So coming from. Like the tech background, all they talk about is an exit. Like you're building a technology company to exit. That's all they talk about. Your multiple exit, that's daily conversation. So whenever we started the business, like our goal was to sell it. Like we want to grow this thing and sell it and get an exit. Now, as we continue to get more into the business, I think it's really appealing having a legacy brand because there's so many sconces we can have with our company. Like we could start a cleaning company. We could start a brokerage down the road because we shoot, man, I think probably in the past, like year and a half, two years, I bet you I've given agents probably a hundred leads and transactions just from our website, but I don't get anything from that outside of the management client on the backend and then just helping them underwrite it and the relationship. So there's so many things that we still can. build out. And I think we have a lot of work to do, but we've built a pretty cool brand so far. And I just want to keep peppering onto that. But I really want it to be like, if anybody thinks hospitality, like we want to be the leader in Northeast Florida, not only with like property count or assets under management, but that's who you think of. So like in St. Augustine, like you think DJ and Lindsay and Jacksonville, you think yellow bird. Like we want to be that of vacation rentals and like the hospitality business. That's what we're going to continue to do. I think we're going to continue to grow and scale. I think like 250 homes is a really good sweet spot because when you get bigger, you really lose quality and it's tough. Like I always want to be in group chats with my owners. And it's tough to do that whenever you have a hundred of them. So I think we still have growth to go, especially over the next three years. We have some exciting stuff. We're really building out with our realtor referral partners. Co branded websites, stuff like that to continue to grow our footprint in this area. A lot of our really good inventory comes from our awesome agents that we work with. We've also considered doing a longterm management arm of our business. We get a lot of interest with that, but it just really hasn't been the focus yet. And then also do we build a brokerage, but just focus on short term rentals or vacation rentals or second homes? I think there's a lot of options to where it almost be silly to sell the company now because we still got some growth To go especially over the next three years
Mike:Gotcha. Cool. And then, I know you said you started building the brand early on, and there's a couple of things you just mentioned that you've got planned, like those shared websites and other stuff to continue building the brand, but for people who are thinking about building their brand, like what are some of the steps that you guys have taken over the last, it's called four years, it's allowed you to do that.
Andrew:Yeah, I think just meeting as many people as possible. And then, so as far as like building the brand, build out your social media, do blog posts, set the vision for where you want to go and then start to build the marketing and the brand around that. Because we, so like I mentioned I don't even think we had a client whenever I built the website out and I started like putting out blog posts, like we were managing our own properties and I was still trying to be a thought leader then because I wanted to be like. If a client does land on our website, heaven forbid, whenever we're first starting, if we do get a lead, like I want to be prepared. I want to say Hey, we have this brain. We have this website. We manage a couple homes and all reality. They're just our homes. But we just needed someone to take a chance on us. We have to build a brand out to do that. Cause I, I remember in the very beginning, like I went to every meetup, like I tried to have coffee with everyone just to get my name out. Even if they were like stupid, pointless conversations, just getting my name in front of people and agents and providing as much value as possible. I don't know how many properties I've underwrited for agents that just never move forward with that property. It's like hundreds. So it's a lot of like free value. Cause you get it on the longterm, like the vision that we're trying to build in the company we want to build. You got to do all that free stuff because it'll come back to you down the road. Like they will reach out to us on a better property in six months because they knew I took the time to help them out on this one, even if it didn't pan out. So just bring as much value as possible to anyone. And I think that's the biggest thing that helps with building your brand. And don't be afraid to build the brand now start on social, but you have to actually do stuff like there's so many, and this is a big pet peeve of mine, people that try to be influencers and they haven't grown a business and they're trying to put out valuable content, do some shit first and then bring as much value as possible. And I think that's the best way to, to scale because it's funny how like things just fall into place. Like whenever you're just trying to bring value or, just doing things out of your time that don't really amount to much, like it all comes full circle.
Mike:Yeah. 100%. Um, We're getting close to the end here. There's always two questions I like to ask at the end. And the first one, which I'm sure you have a few being in a short term rental business is what is the craziest or most uncomfortable situation that you have ever experienced in a real estate deal?
Andrew:Oh boy. Yeah. We've had a lot. We've had a lot. So I will say that like the properties that we've bought, they've been relatively smooth. Like I haven't ran into a ton of issues with those, but from like our day to day business in the vacation rental space, we've had people OD at properties and had to deal with that. We've had people leave, I've had people leave rifles like AR 15s at properties. And I was at the point where like you get a little unemotional about it. So it wasn't even I'm going to call the cops. But I'm like, dude, come pick this up. I don't want to deal with this right now. I have other check ins to worry about, get this off my plate right now. We've had two people die at properties. Yeah. People overdose and had to deal with that because we have so many reservations. This stuff is bound to happen. Gosh, there's been a million things we've had. We've had somebody step off a step and sue us. There's been some, I could write a book on all the things that we've gone through with reservations, but those are some of the top ones for sure.
Mike:gotcha. So for kind of the newer people looking to show that the second question is if you could go back in time, give yourself one piece of advice you were looking for your first real estate deal, knowing what you know now, what would you tell yourself?
Andrew:Probably just have patience. And I think it's the same in real estate and acquiring properties than it is in the business. As a owner, you just want things to happen faster, whether it's growing, getting more properties, or I don't know how many times that my wife and myself got super excited about putting offers on properties and then just fell through, like whether it's financing or like the inspection was terrible. And I think we just always get bummed out, especially if it's a home that we really like, whether it's a vacation rental or a primary, it's happened to us a couple of times. But just have patience. Cause like the biggest thing that I've learned in Gosh, we have so much to learn because we're very young in our business. But usually if something doesn't happen, it's for a reason. So there's going to be another opportunity that pops up like, okay, that property fell through. The foundation was cracked and that would have been a fricking nightmare. But then you find a different property where you wholesale a different property or flip a different property where you acquire a different client or something like that, or even like losing a client, be patient. Everything happens for a reason and it comes full circle.
Mike:Yeah, it's a great piece of advice. Andrew, if people wanted to reach out to you after the show, if they're interested in your management services, or, maybe they maybe they want to be a part of your company because you guys are growing. How can they go about reaching out to you?
Andrew:Yes. If you have a short term rental, bring them our way. I want to manage all of them. My email is Andrew at josephellenproperties. com or our website, just josephellenproperties. com. There's form fills on there. I'm pretty much glued to my computer and my email and my phone. So hit me up. And I'm also, I'm happy to help. So if you're trying to get a property, if you're an agent, you need help with underwriting, you can always reach out to me at josephellenproperties. com. It doesn't take up a ton of my time. We just want to build relationships because that's always been our biggest resource. So hit me up. I'm happy to help. Happy to answer questions.
Mike:Cool man, this was awesome, thanks for being on the show.
Andrew:Absolutely, man. I had a good time.