Welcome to short-term rental riches. We’ll discuss investing in real estate but with a specific focus on short-term rentals. Quick, Actionable items to Acquire, Manage and Scale your portfolio. I’m your host Tim Hubbard.

Tim: Welcome back everyone to the Short-Term Rental Riches podcast. Happy to be here again. Happy to have an extra special guest today, a guest that’s written a great book and writing another one and it just has a ton of experience and that’s Brooke Pfautz. Welcome to the show, Brooke.

Brooke: Glad to be here, Tim. Thanks.

Tim: Would you mind just giving us a quick background? I know you’ve just, you’ve got so much experience in the space, but I guess where you got started and where you’re at now.

Brooke: I’ll try to keep this as brief as possible because it’s in a long, long road, but stumbled back in 2007. Didn’t know anything about short-term rentals. Ended up building that company pretty fast. Started a company called Vantage Resort Realty in Ocean City, Maryland. Built that to about 500 properties under management. Sold that in 2013. Went down to Orlando where I was Chief Business Development Officer for another management company down there. I was also COO of a company called Purpose Built Vacation Homes where we design and built these luxury vacation rentals. Then I went into software for a couple of years. When I was headed up Sales and Marketing for LiveRes, which is a property management software company. And then four years ago, I launched Ventory. And Ventory is a sales and marketing platform that helps professional short-term vacation rental managers grow their inventory.

Tim: Yeah. Awesome. And I know that we could talk for 20 hours today, but our podcasts episodes are normally quick, actionable ones. So, I want to try to get to some nuts and bolts here. Your book that you wrote, Zero to 500 Properties in 5 Years. I read it. As we know, there’s lots of different ways to make money in the short-term rental world. We can buy our properties and invest in them, which is usually what we talk about on the show. Although we can do lease arbitrage, which is another way. And then we can also manage properties. And so, I know a lot of the people who listen to the show are also managing properties. And you built a massive portfolio in a short amount of time. Can you give us a little more insight into that?

Brook: Yeah. So, I launched in Ocean City, like I said, didn’t know anything about the market and knew really quickly, realized really quickly for us to really scale and kind of make the maximum money that we could. The best way to do that was by growing inventory. If you only had a handful of properties, there was kind of a cap on what you could really make. But the most impactful lever that you could pull, what we determined was just adding inventory because we knew we would fill them up with guests. We didn’t have any issues with marketing to guests. This is in the early days of VRBO and Homeway. And we used a couple other channels at the time. Airbnb wasn’t even really a thing, but we knew we’d get them booked. But so, we realized the most impactful lever we could have was really getting inventory. And I came from actually mortgage banking. That was kind of my original career right out of college. Did that for about 10 years and was pretty decent marketer in that realm and kind of took those marketing skills and kind of turned it into short-term rentals where most of our competitors were lobbying out one postcard per year. We were constantly doing owner acquisition marketing from both a digital perspective, but also a lot of direct mail. Direct mail really, really works in this industry.

Tim: Yeah, it’s awesome. It’s a great story. And your book was jam packed full of insights. A lot of the people listening to the show know that my company and I recently started managing other properties as well. And we’re doing a little differently. We’re managing properties virtually. So, a lot of things have changed since when you started building your portfolio. What would you say to someone, I guess, building a management portfolio today in terms of just how things are different?

Brooke: Yeah, I mean, well, the first thing is I like to look at just from the first perspective of if you want to build net worth, you can do it many different ways. You can do it from owning the real estate. You can do it from arbitrage. But many people think that you can’t do it from managing other properties. But these contracts are super, super valuable. And it’s probably, I think people discount really the true value of these contracts. I mean, there’s a guy named Jacobi Olin with C2G advisors. He’s done more M & A transactions, mergers and acquisitions transactions than anybody did. Over $200 million last year. And he said publicly multiple times that the average contract value is about $34,000, $33 ,000 or $34,000. So, I mean, that’s pretty significant. I mean, you can figure it out. You grow a portfolio of 100 properties, you know, on average, you know, that’s $3.4 million. So, it’s not just owning the real estate. So, the first thing is understanding that, you know, there really is value to these properties and these contracts. And the second thing is, you know, have a specific proactive plan to go out there and get them. Don’t just assume they’re going to stumble into you. You know, just like you have a most people have a proactive plan to going out there and getting guests, you should do the same thing with with new inventory as well.

Tim: Yeah, great tips. Well, I guess acquiring new inventory is one thing, but then actually managing that is another thing. And we have so many tools today. A lot of them I’m sure you didn’t have when you got started with your property management business. What would you say to those out there looking to manage properties with the tools that we have available today?

Brooke: Well, there’s a lot, obviously, so much more technology. And, you know, I look at technology as obviously making everybody so much more efficient and not even talking about, you know, AI and chat GBT and everything else and how that really turns out will will be turning people in on the superhuman and 10x everybody. But I mean, I look at, you know, from just even the property development and property management software has evolved so much, obviously, marketing channels, channels like, you know, like Breezeway. Breezeway makes it so much more easier and those kind of tools, even like guest marketing platforms and guest guidebooks and things like that, that can really cut down. I mean, I remember how many times we have hundreds and hundreds of calls we would get per day. And it was these people asking the same darn questions every single time. It’s like, you know, some of these guidebooks really eliminate so many of those questions right now. And obviously, the use of virtual assistants, revenue management is, I mean, they’re what revenue management wasn’t even a thing when I first started in this industry. And now it’s like, if you’re not doing revenue management, you’re in the dinosaur ages. But tons of technology really is making it much more efficient and again, leveraging virtual assistants. And one of the mistakes that I made, and I’m actually admitting this in my, I’m actually doing a post online about my top 10 mistakes that I made. And one of them was thinking that everybody had to be located in my office. I mean, now looking at it, it was it’s kind of like a dumb moment, you know, but back then it was like, no, we have to have everybody here. And nowadays, it’s obvious, it’s very obvious you don’t need to have everybody in. And very often having people in these resort markets is really challenging. As one gentleman mentioned the other day to me, he goes, it’s not a talent pool, it’s a talent puddle. And many of these small tiny markets, there just really isn’t much there. So, if you can broaden it and make it virtual, it definitely can make your life a lot easier for sure.

Tim: Yeah, I know we’re here recording this. You know, I’m down here in South America, and we’re faraway from each other. And our team, you know, we have people in the Philippines and Mexico, and we just started hiring out of Eastern Europe. And we have people in the US as well. But it really is, I mean, there’s so much opportunity now, and we can do so many things virtually. I guess with that said, though, it’s not easy, necessarily to manage a lot of people. And managing people virtually is just another, another aspect that comes with its own set of challenges. And so I imagine managing 500 properties like you were before you sold your company, that you had quite the team. What would you say for someone building a team out there today? And maybe what what to look for? Any tips around that?

Brooke: Yeah, so first off, the team is probably the most important thing. I mean, I say here just at my job at Ventory as CEO is people, it’s culture and vision and strategy. So, two thirds of my job really revolves around the team. And if you think about it, you know, we have the right idea, the right time and the right market. And what determines our success or not is really the team we assemble. So, my number one job, I’m on the front lines of recruiting, I’m on the front lines of actually going through and vetting resumes and things like that. So, we take it very seriously. We’ve got a team of close to 50 people here at Ventoria. And I’ve hired every single one, I was the initial call on every single one of them. But we have a pretty dialed in process. But one of the things that I think is most effective is we leverage psychometric personality assessment tools. So, you may have heard of like predictive index and culture index. These are these are a couple of tools that I’ve used for close to a decade. Every single team member on our team has been hired with these tools. And I wouldn’t hire a babysitter without them right now. It’s it’s that impactful. It’s almost like cheating. You know, people can interview really, really well. And they don’t tell you though, they’re going to be late, you know, they’re going to not have lack follow up in these kind of things. But these kind of tools really make that so much easier. So, I really don’t even look at a resume until they filled out that that psychometric personality assessment. Then I look at the entire candidate, I must look at their profile first before their experiences, because to me, that’s the most important trait. And then once we see if they have the right profile for that role, then we’ll look at their experiences and then determine if it’s if we should interview them, then we interview them, we’re really looking for just more of a cultural fit and looking in for, you know, how will they fit in with the team? And, you know, do they have the capacity and the desire to do the job?

Tim: Yeah, yeah, great points there. We use the dis personality a lot. I know there’s there’s a whole bunch of them too. And the culture fit really is a big thing. One of the books that I read recently, and I’ve heard you mentioned on other podcasts too, is the book Traction. And talks about, you know, all those things. So, anyone out there listening, if you’re if you’re starting building a business, I highly recommend you read the book Traction. It’s a blueprint for running a successful business at all levels, pretty much.

Brooke: I second that 100%. So, we are running EOS in our business, Entrepreneurial Operating System, which obviously what Traction talks about, Gina Wickman, and especially managing remote teams. We say we manage outcomes, not hours worked or where you work from. And much of that comes from EOS, because there’s accountability built into it, there’s a cadence to it. And you really can’t hide behind the metrics. So, people that are effective and do a good job, it’s super helpful. And I would say like, you know, look, I went to business school and, you know, they’re business school, they don’t teach you how to run small businesses really. EOS is probably the closest, you know, building a business in a box that I’ve ever, you know, came across.

Tim: Yeah, it’s amazing. It’s been really good. I’ve just been studying it back and forth and implementing it. It’s really fantastic. So, well, okay, let’s see here. So, building a management portfolio, we know that it can be a really good opportunity. And it’s a natural progression actually for a lot of people in the short -term in the world. And maybe, you know, they get their first property and they like how it’s working. They get a few more. They realize that they have to develop a lot of these management skills and some tools. And then friends start asking and they say, hey, can you manage my property? And so sometimes it’s a natural evolution, but there’s a lot of mistakes that people make along the way. And I think this is what your next book’s going to be about. Is that right?

Brooke: It is. Yeah, it was kind of funny. Yeah, it’s the top 10 mistakes that many of these professional short -term vacation managers made. And it was funny how it all kind of came about. I just casually set a text one Sunday afternoon. I read a blog or something from somebody else or post that somebody else did in a different industry. So, I said, let me try it out. So, I sent a text out to four of my buddies in the industry and they all responded. I was like, man, this is some great content. I asked them if I could share it online. And it went viral ever since that point. And since that point, we’ve asked 52 different people their top 10 mistakes and we’ve been sharing it on LinkedIn. It’s just been an incredibly just powerful series and take aways of this are so valuable. And it’s just so nice to see people there. People have been very candid and vulnerable, but it’s not just the mistakes they’ve made. You take the inverse of that and it’s like, all right, what would you do almost differently next time? And it was such great content, decided to turn it into another book.

Tim: Yeah. Yeah. Thank you, by the way, for that great information. It’s so exciting to me that I love reading. And the thing I love about it is that you can pick up a book or listen to an audio book or watch a series on YouTube, whatever it happens to be. And you can learn from someone’s career, someone dedicating years of their life, they condense it down into a tiny little version and it can help you save so much time and frustration. So, without giving too much away, what would you say are maybe like three of those top 10 mistakes that property managers are making today?

Brooke: Wow. So, it’s funny because it ended up really coming down to about 10 common mistakes across the board. And we can touch on a couple of them. One was team. So, the team of, in one case, not hiring fast enough. In another team, it was talking about not firing soon enough, like they should have fired quick and getting the right people on the team. So, team was a big part of it. Let’s see, there was not inventory, go figure, inventory acquisition was a big part of it, but it was a lot of it based around not knowing the value of inventory, not knowing how valuable it was to actually bring on more properties, but also was talking about bringing in the wrong properties and not only the wrong properties, but the wrong owners. And a big part of it was firing owners that weren’t a good fit for you. So, because a lot of them can be very toxic to your culture and really burn out your team. Let’s see what else we had. Networking was probably, this is probably one of the biggest surprises for me was networking, not networking with local competitors soon enough, but also like not going to industry conferences. I mean, so many people said, I think just about every single person mentioned that, that they wish they would have gone to conferences sooner and they would have actually partnered up with their local competitors and just learn and realize that they’re not competition. I mean, even though they may be competition, but they can be friends and not necessarily foes. Nobody good nuggets in there, but those were kind of some of the big ones.

Tim: Great advice, great advice. I love going to the conferences too. I mean, aside from the fact that they just can be fun to get away for a little bit, but again, it’s kind of like you have so much knowledge and so much wisdom all gathering in the same place around the same topic. It’s like a condensed mastermind in a weekend. So, and the virtual options are good now too. I would say at least in my case, a lot of times I’m not as focused with the virtual one as I would be actually being there in person. So yeah, if anyone out there interested in property management, I highly suggest checking out Brooke’s book. He’s got a bunch of knowledge, ton of wisdom, learned a lot and was willing to share it with us all. So, check that out. And then looking forward to getting the new book when it comes out Brooke, do you know when that might be available?

Brooke: Yeah, so it’s probably going to be available this summer, later part of this summer. If you want to get a reserve, we’ll send you, we are sending out some free copies. So just go to vintory.com, v -i -n -t -o -r -y .com slash mistakes. And you can get on that list and we’ll go ahead and send you a free copy of the book. And also if you just go to our website and just, you know, you can get my other book from zero to 500 properties in five years for free as well. We’ll send you a digital copy of that one too. So just don’t go anywhere, you know, contact us page.

Tim: Awesome. Well, why don’t you tell us a little bit more about Vintory too, Brooke? That’s your, current company, right?

Brooke: Yeah. So started Ventory about four years ago and our mission has been the same since the beginning. It’s helping people grow their inventory. So, we don’t do anything with revenue management. We’re not doing anything with the operations or guest marketing. We focus exclusively on the supply side of things. So, all that means is we help people get more inventory, more properties in their rental program. And we do that in a couple of different ways. We do that through data. We have the largest database of Acacia rental homeowners in the US. We have a really cool CRM and marketing automation platform. It helps you kind of nurture those leads. We also have a really cool campaign engine that allows you to easily send out direct mail, kind of our version of Canva. So, you can build out really cool postcards and direct mail pieces and send it through the system. We have, you know, do some digital marketing, like email marketing through our platform and other digital marketing services. And yeah, just everything you need to grow your inventory in a nice neat little box. And it also, has it, we have a team of 50 growth experts that this is all we do kind of helping you, you know, get more properties.

Tim: Awesome. That’s awesome. Well, Ash, I know we can talk for a long, long time. There’s so many avenues to go down, but most of our episodes are pretty quick actionable advice. So, we’ll definitely make sure to have you back on in the future. Before we go, though, I just got, I have one other question for you. The name of the podcast is short -term rental riches. And a lot of people, when they think about riches, they think about just financial side of things, but life has so many more riches to offer than just the finance side. So, what’s one thing that you’ve a habit or something that you’ve started doing that’s enriched your life in a non -financial way?

Brooke: Yeah, well, the industry one, I was just thinking about this this morning, the industry has enriched my life with just the people that I’ve met. I mean, the friendships I’ve gained, I mean, I think if I were probably to get married again, luckily, I’m happily married, but if I were, I mean, I think my entire bridal party would be people that I’ve met within this industry. I’ve just, some of my best friends now are from this. I mean, I can count on them for anything. I mean, we do retreats, we do mastermind retreats, and we’re just, and every time we go to a conference, it seems like not only the people that I’ve become really, really close with, it’s almost like a family reunion, but all the people within the industry, all the vendors and everything else, it’s just that I’ve never seen anything like it. Like I said before, I was in mortgage banking and I’d go to these conferences and talk about a boring conference, man. This is just a completely, I love how everyone really tries to help each other out, even competitors. And it’s just, it’s fantastic, truly blessed to be in this space.

Tim: It is, it is. It’s a lot of fun. And I love that it’s so global too. We have short -term rentals everywhere. People are traveling everywhere. And so, I agree with you. Well, awesome, Brooke. We’ll make sure we get your information in our show notes. Really appreciate your time and having you on today. And we look forward to having you again in the future.

Brooke: Appreciate it. Thanks.

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