Jeremy Schmitt:                00:00                    We’re dropping prices dramatically, giving people 30 to 40% discounts, 14 weeks stays. Some unique things we’re doing that you could potentially do or reaching out directly to hospitals and say, “Hey, if you have people that need help with quarantine, if you have extra traveling nurses, we want to provide that service for you.”

Julian Sage:                       00:18                    This is episode number 54 of the shorter rental success stories podcast. Are you an investor that’s looking to have your home professionally managed? Got a cohostit.com for more information. Welcome back to short term rental success stories. I’m your host Julian Sage. This is a show where I talk to hosts about their journeys and starting and growing the short term rental business. My goal is that you’ll be able to walk away with practical information that’ll help you become a better host and learn how to scale your business like any exceptional hosts. We all strive for five star reviews, so please go on over to iTunes and let us know what you enjoy is. It really helps support the show if you haven’t done so already. Going over to our Facebook group, the host nation, to connect with the community. Hey, what is going on Host Nation?

Julian Sage:                       00:59                    I am super excited to be back again with you this week. So there’s been a lot happening in the short term rental space with Airbnb making these new announcements and their forced step action plan, which is something that we’ve covered on the vacation rental machine podcast. So if you haven’t checked that episode out where we cover everything going over what Brian Chesky shared with us for his four steps of action to be able to help alleviate hosts that were affected. It’s definitely an interesting, listen, this is definitely something that you do want to find more information about as it can seriously impact your business. There’s also a lot of information coming out for small businesses in regards to grants and funding loans to be able to help hosts out. The SBA is coming out with a lot of resources for hosts to be able to utilize, such as the COVID-19 bill, there’s the EIDL loan as well as the PPP and all these different loan programs that are coming out to be able to help either pay for employees or some type of grant or a loan to be able to allow you to keep operating your business.

Julian Sage:                       01:59                    Again, go on over to the vacation rental machine podcast to be able to keep up to date with Jon and I as we are covering this information as it’s coming out, I want to say thank you to all the hosts that have been super supportive and recognizing that I’ve been a little bit stressed out. I sent out an email the other week, you know, just being honest and saying I’ve been burnt out. I’ve been going really, really hard for the past year, the past 52 episodes. And it was just like, exactly. At one year it was just like, boomall hell breaks loose, but I’m doing okay. And I thank you for everybody for your kind messages and emails and comments. So every day I was just waking up, just super excited because I knew like we’re getting there, we’re moving forward, we’re progressing.

Julian Sage:                       02:44                    So now just to be able to stop and reflect and not so much think about what’s the next thing that we can be doing? How can we, you know, make this next move. And now it’s more like, well, how can we help the people that are hurting? It’s times like this that we have to do a lot more reflecting and looking introspectively. And I’ve been doing that myself. Like how I always end every episode we have to keep on host thing. I’m in this for the long haul and I don’t plan on going anywhere for a long, long time. And even though every day is not going to be just, you know, constant progression and strides moving forward, it’s just the simple act of doing and keeping on keeping on hosting. And that’s why I’m really grateful for our guest today.

Julian Sage:                       03:23                    Jeremy Schmitt. Jeremy was a previous guest on the show and he’s come back to be able to share his seven steps to survive a pandemic, survive this type of situation. We also talk about the state of rental arbitrage and what Jeremy is seeing from these companies like Sonder, Lyric and Mecasa, all these big companies that are just really focused on picking up more units and what that means for rental arbitrage. A lot of people have been really bad talking about rental arbitrage model, which I honestly believe is really just coming from the people that did not like the model and don’t like people that are teaching how to do it. It is a model that you know, is here to stay there. There’s companies that are really doing well off of it, but again, it’s like any other business that you’d be the same if you own property.

Julian Sage:                       04:09                    But again, we covered, is rental arbitrage dead, is it something that’s sustainable in the vacation rental machine podcast? So if you’d like to hear Jon and I’s perspective on that model as my partner, Jon has over 24 properties being rental arbitrage. And then another 10 or so being cohost and a few that he owns really utilizing this whole model that we call the RCB, the rental arbitrage, co-host, buy and hold models, and how using all three can really help diversify your portfolio and allow you to be able to scale exponentially. Again, this is a really great episode that can talk about some of the different pivots that you can do in your own business. If you’d like my show notes for this episode, go to shorttermsage.com/str45 or if you like my show notes sent directly to your inbox every week, then go to shorttermsage.com/shownotes.

Julian Sage:                       04:53                    With all that being said, on to this week’s conversation.

Julian Sage:                       04:54                    Hey, welcome back to Host nation to another episode of short term rental success stories. In this episode we have the special honor of bringing back a previous guest from episode number two seven so that was 25 weeks ago when we first started the show. That was our midway point. So I’m really excited to be talking to Jeremy again and seeing where his business was then where it is now and also what he’s doing during these uncertain times and how he’s handling this as well as a really awesome free resource that Jeremy put together for the host nation community and for all the hosts that are looking to, you know, just to get some more information on what they can be doing. So I’m really excited to have Jeremy back on. Jeremy if you could please give a little brief introduction about who you are, for those of you that haven’t listened to that episode, again, go to shorttermsage.com/str27 to listen to Jeremy’s episode. But Jeremy, please reintroduce yourself and let’s talk about where you are now.

Jeremy Schmitt:                05:48                    Thanks Julian. Thanks for having me on again. I have a little company. It’s called the Pasion Group. I had it since we last spoke.

Jeremy Schmitt:                05:58                    Since we last spoke actually, we’ve rebranded our Chicago portfolio to be called Chicago Residents Club because we wanted it to be more local, partner with more local business. We’ve also expanded to Palm beach just to offset the seasonality of Chicago and it’s been really good for us right now in these uncertain times. So since we last talked, we talked about going from zero to 50 and we’ve continue to grow but we’ve grown very objectively and very based on data. We’ve seen the VC players in here and I talked to a number of people; the Sonders, the stay Alfred’s, people coming into these metropolitan cities like the Chicago and flooding the market with supplies. I’ve been talking to the local brokerage community, talking to these developers that we have relations with. We know that they’re just making deals that don’t quite make sense.

Jeremy Schmitt:                06:51                    Where we paytheir model is master lease for people who don’t know. Where we pay maybe 1700 – 2000 for a one bed. They’re paying $3,000 for a one bed and they’re doing this for one of their deals actually. One of my friends was a part of it. You know, they even have to pay the taxes, which the city taxes in Chicago are enormous. So we just started seeing that about and you know, six months ago and we knew just like this is not sustainable. It’s okay during good times. But we’ve been in an extended bull market, we’ve been at the eighth inning for a long time and Corona was kind of that last strike out. Okay, we’re entering the ninth, maybe we’re finally, I’m going to be entering this kind of recession area. So for us,, during that whole time, our big focus was one building up a stack, a stack of cash to be ready for this.

Jeremy Schmitt:                07:49                    So, in our business, we always require at least two months cash reserves. Ideally we have up to six. For us, it was a little tough just because we just got out of winter time. So January and February historically is where people lose the most money in Chicago. So it was, it was not good timing cause the Chromos stuff happened like the 1st of March. And for us, you know, Saint Paddy’s day is a big day. We could have done much better, but putting that cash stock away was really important for us. Secondly, we went out and really seek strategic capital partners. So for our deals, you know, we don’t really take on many clients. We have two really large clients who we take on really to mitigate our risks. So okay, we master lease and spent X amount we want to have, okay, maybe a fourth to a third of that revenue coming from, you know, the management side of the business because there’s no risk there.

Jeremy Schmitt:                08:45                    We’re not going to be making as much in these uncertain times, but because we have an airtight no management system, we’re able to make money, well it’s a lower risk profile. So we’ve built that into our portfolio as well since the last time you’ve talked. And then as I spoke, you know, Palm beach, it’s actually been really good for us in these uncertain times because people are trying to get out of New York, trying to get out of Chicago and get to more room, more remote location. Well, having those units down there, you know, it’s really helped us during those uncertain times, but a lot like everybody else, you know they probably watched other episodes on YouTube or the Airbnb automated guys. Nope, we’re dropping prices dramatically, you know, giving people 30 to 40% discounts, 14 weeks days. Some unique things we’re doing that you could potentially do are reaching out directly to hospitals and saying, Hey, if you have people that need help with quarantine, if you have extra traveling nurses we want to provide that service for you.

Jeremy Schmitt:                09:44                    I’m also part of kind of a national network of short term rental operators. We’ve created two brands to kind of help those stranded travelers. Right. And also these hospitals stays just because the hospitals are getting overrun. We’re also putting our stuff on Zillow so that distributes a truly a hot ads, Zillow, Craigslist, and then Facebook marketplace. You know, just to expand the reach. And the more we’ve done it, the more we see it’s like, Hey, this should be a continual process through, through our bookings. You know, we might not make as much money for the summertime where we making a two X three X money, but if we can make in a 1.5 to two longer term rentals, it’s easier for our operations and cleaners, you know, and it really decreases the risk when things happen, when things hit the wall. You know, and things are happening now [inaudible] one of our top competitors is really struggling, seems to be going under.

Jeremy Schmitt:                10:39                    Do other people. I’ve just kind of given up on it in the market. So me and my team, we just decided, Hey, let’s create a resource. So maybe it doesn’t help now cause we’re already in that uncertain time. But if you’re in this business for the longterm and you see the true value, I mean let’s start building the business, the right plate the right way and make it foolproof moving forward. You know, that’s what we’ve done with our business. As I said earlier, you know, we built fully grown our units objectively. Yeah, we could have, we could probably be at a hundred units right now, no problem. But you know, we’re happy at our amount because you know, we know we’ve made great deals and we know we have the right no systems and partners in place to take care of that. So, you know, we wanted to share kind of from our standpoint, you know, how we’re surviving this when most aren’t. So we created kind of a seven part series that we look forward to sharing with your, it’s your group and your nation.

Julian Sage:                       11:35                    Yeah. Thank you so much Jeremy. You know, I think what you said about finding the counter seasons is something that’s really smart from a manager perspective. A lot of managers, they might just focus on a particular area. But let’s say, like you said, everybody’s moving from those highly dense populated areas down to the more set apart areas like Florida.

Julian Sage:                       11:56                    For those properties in the Chicago, New York area where people, you know, you’re, you’re finding those vacancies, like you said, one of the things that you said that you’re doing is you’re listing to them on a long term rental sites. Are there any other pivots that you’re doing right now in your portfolio? And especially because you’re working with investors, so are your investors expecting certain things or what are you doing to be able to work with them?

Jeremy Schmitt:                12:17                    Yes, so this is actually one of the parts in our, our ebook is have strategic capital partners. And the really important aspect of this is strategic capital partners who understand our business. Like our business is real estate, but it’s not, it’s a hotel asset, it’s a hospitality asset. So for us, you know, all of our partners understand this, and they know when times get bad, they get bad quickly.

Jeremy Schmitt:                12:47                    But it, if we can survive, you know, and we have the right buffers in place, we’re not only going to be able to survive this, we’re going to be able to work with our capital partners to start to pick up other units. So we’ve gotten contacted by two or three other groups, two, you know, take over their portfolios right now. And some of them are a fit, some of them are, are not a fit. But that’s really what’s important, you know, in terms of us and working with our partners, you know, in terms of pivots, it’s just a matter of having open communication. I mean, that’s what our business is and hospitality. It’s communication and providing a good service. So talking to the landlord saying, Hey, this is going on. You know, New York, LA, Chicago hasn’t really, but you know, they’re doing, they’re halting evictions, which we think it might’ve been smarter to just defer rent payments cause people are just gonna probably say they don’t have the money.

Jeremy Schmitt:                13:43                    But you know, it’s just having conversations with them saying, Hey this is where we are now. We have reserves and we’re going to stay alive. We’re not going to default on you. We’re here to be your partners in the longt erm. No, what can we do? So, you know, ease this part and can we defer the rent for, you know, 30 days. Can we talk to, you know, your, you know, your partners, your investors, even your tenants to see, Hey, can we provide an extra service for your building, you know, in case families need to be together. So those are both small pivots that we’ve been doing. But that’s why, you know, I sold my former company, we started this, you know, having the right partners who really understood this or being in it for the long run is invaluable because anybody can do this when it’s good. Anybody, it’s very easy.

Jeremy Schmitt:                14:26                    There’s low barriers to entry. It’s very simple. But you know, you can really differentiate the professionals from the amateurs and times like that. Yes. And, and that goes for, you know, your capital partners. So our capital partners are understanding, our investors are understanding. Nobody’s happy, you just have to have that conversation and say, Hey, [inaudible] these are bad times for everybody. In Chicago, the market occupancy is about 9%. When right now it should be closer to 40%. You know, and our units are typically this time, anywhere from 70 to 90% occupied in this low shoulder season. But it’s tough. You know, you got to bite it and you gotta be ready for, you know, the water’s too calm. Which is why we’re thankful to have, you know, those capital partners.

Julian Sage:                       15:10                    Jeremy, I really appreciate your stance on where you are and how you’re communicating.

Julian Sage:                       15:17                    You’re very reserved, very leveled during these uncertain times. A lot of people are freaking out. A lot of people are scared. But you’re coming at this from a very, you have to be the person that has to be confident and you have to be the person that is helping these investors, these capital partners feel like they’re secure. You can’t be the one that’s freaking out and saying like we don’t know what to do. We’re just slashing prices. This is really bad. So I think even just your mindset, I think your mindset is really important and where you’re coming from. So I hope that everybody that’s listening to this can see how Jeremy is the way that he’s communicating, the way that he’s talking about the numbers, talking about the facts and just saying, this is what it is. This is what we’re doing. I think that just that alone is really powerful. So I want to definitely talk about what are these steps that you wanted to share. If we could kind of highlight what it is and then if anybody wants to get a little bit more detailed, they can, get this free ebook.

Julian Sage:                       16:13                    Hey, it’s Julian again. Have you ever thought about buying or selling a short term rental business? Strbroker.Com allows you to list one property, 10, or even a hundred. If you’re an investor that’s looking to get into the space and you’re looking to pick up properties, or maybe you’re someone that’s already been in the space for a while and you’re looking to sell. For more information, go to strbroker.com to list your business. Now onto the show.

Jeremy Schmitt:                16:36                    That sounds great. I won’t go into too much into details but I’ll try not. So we broke it down into seven steps. It’s really just thinking about your overall business. The beautiful thing about these down times when it’s so slow is that you actually have time to think about it and work on it. Because you know, your operations are slower. So number one, we just say run a light and tight ship. So by light we mean we want to systemize your operations as much as possible. So, optimize your cleaning systems, optimize your channel managers, optimize your distribution. We’re lucky that this is a repeatable business. So 80% of the stuff can be systemized. Uand the tight aspect of it is playing with A players. When it’s light and it’s tight, rather than just one manager only being able to take care of say, 15, 20 properties, now, he can do 40.

Jeremy Schmitt:                17:36                    So, and he has that buffer in times like these that he feels like he still has room to maneuver. And you don’t necessarily have to, you know, let them go because you’re running on a very light and tight ship. So that’s really the important thing. We asked like what are the 80% of operations that can be automated and optimized to do that? So number two, we really say be ready for a market swing at any time. You know, we’re in a global connected world. If you’ve ever read Nassim Nicholas Teleb’s books, fooled by randomness. Antifragile the world gets more connected every day and black swans, unexpected turmoil events, whether they be good or bad for our business. Oftentimes they’re bad because we’re at the forefront of discretionary income.

Jeremy Schmitt:                18:28                    We’re in the travel business. You see it around hotels, airlines, us, we’re getting hammered. We just have to be ready for it at anytime. You know, it’s cold in 19 now. It’s going to be something else in three years. So no matter how good times are, we just have to be ready. It’s fairly simple. Three and I, I won’t touch on this too much, but it’s just having the right partners the right partners. And when I say partners, it’s also, it’s also your community, right? It’s like, it’s what you provide Julian. You know, then connecting with people. Mmm. You know, all of your levels of communication where you can connect with other hosts who are going through the same struggles. You know, also part of Eric Mueller’s short term rental legends. He’s done a fantastic job of coordinating

Jeremy Schmitt:                19:14                    And collaborating with everybody. I’m making everybody just feel like we’re in this together. Okay, so let’s get a level head and see how we get to that. This, the end of this Thomas. Number four, and I said this in the beginning of our business, it’s creating cash flow redundancy. So redundancies and engineering principle, it’s, you don’t create any systems without fail safe. This stuff’s going to hit the wall. You know, shit’s gonna hit the wall. I don’t know if that’s allowed here, but it’s like you have to just have all of your, it’s, so the two points are here are make sure you know your financials and that they’re organized very well. So this is important one for good times because if you want to get loans, good and bad times, if you want to talk to financial intermediaries and investors, you have to have your financials be high in clad in order to get loans or get capital.

Jeremy Schmitt:                20:05                    And then two, you have to know how, what your monthly nut is, what are your, what’s your monthly costs and build in a two to six months reserve into that. And we’ve done that and that’s why, you know, we feel confident. We’re going to see, we’re going to see the under end of the tunnel. You know, if Corona lasts for, you know, six months a year, I think maybe we’re all Sol. I’m naturally an optimist. But when anything happens, you have to have these reserves. I talked about this earlier too, so I won’t get into it. But having the right strategic capital partners it just allows you to take advantage of a disruptive playing field. So rather than just trying to survive you can really thrive and take over deals, properties when everybody else is freaking out. So having set smart money. We talked about this too.

Jeremy Schmitt:                20:54                    Part six is marketing on multiple channels. You know, the OTAs, Airbnb, VRBO, booking, long term rental sites like Zillow, Trulia, hot pads, classifieds like Craigslist, social media, like FB marketplace, your local community, the local relationships. Just spreading the word out. I’m not being too dependent cause I think a lot of hosts got her by Airbnb and their stance you know, and that’s, it’s really tough and it’s, but we’re at the whim of that platform because we’re using that platform. I don’t want to say, I don’t want to say what they did was right by any means. Bbut, you know, diversified that multi, that marketing that’ll make your business much more resilient. And lastly is just mitigating your portfolio risk. When we say this you know, there’s, we think about the three main ways that you invest in short term rentals.

Jeremy Schmitt:                21:48                    So it’s the purchasing of property, which is most risky, requires the most equity managing a property for somebody else, which is the least risky or master leasing the property. Which is kind of the in between. For us, you know, we’re doing a combination of all three, you know, and then when you integrate the right team and the right strategic partners into it we feel, we feel like we’ve really minimized our risk. And you know, the greatest investors like the Sam Zell’s, Mmm. He’s one of the best, you know, they always say, you know, focused on the downside, you know, the upside will take care of itself. We always have to focus on downsides. So that’s why we put mitigate your portfolio risk. So those are our seven points and we just, we are team created and our team really did a great job. You know, my partner Josh created it just, just to help people during these times and really rethink it’s, we’ve had an extended bull market for a really long time.

Jeremy Schmitt:                22:44                    No one knew when, but everybody knew the ball was going to drop at some point. After everything settles, let’s get back to it and let’s be just that much stronger using business principles like these.

Julian Sage:                       23:00                    Yeah. I really appreciate that last point. And again, for anybody that does want to read this ebook, I’m going to be including a link in the description of this episode. So if you go to the show notes page, you can get that from Jeremy. But,just to highlight a couple more things that you said. I really appreciate what you said about during this time, people are going to be able to do well when things are going up.

Jeremy Schmitt:                23:28                    It’s kind of easy to trip on when everything is just going up that way. But focusing on where we are right now, focusing on that downtime, that’s where we really need to be looking and finding those creative ways. I think that that’s a really positive perspective. I, one thing that I did want to roll back to that you said earlier was these three models that we teach the, you know, we, we call it co-hosting arbitrage which is the asset light asset heavy and then your purchasing. You said though that these companies like Sonders, Stay Alfred’s, that they’re actually acquiring these leases. You said that the numbers weren’t looking right. Is there something that maybe us hosts that are coming into the space? Cause a lot of us the listeners of this show dabble in all three the arbitrage asset heavy model is what we call it.

Julian Sage:                       24:23                    But are there, you said that these companies are doing something that is not what we’re doing. Cause you know, art for us, we’re trying to find those leases that are at market rent, but you’re saying that these companies are inflating the price just so that they can acquire more properties as essentially?

Jeremy Schmitt:                24:40                    These VC backed firms are very different in essentially two ways. I’ll explain it to you, to everybody. Number one, they’re making deals with landlords, pre-development. So basically they’re getting leases in place and allowing developers to build during an extended bull market where assets are priced very well. So when they take on a master lease, they’re already paying a premium. New construction is expensive. Assets are priced very well. There’s not really a good place to find deals. So two is that they are forced to grow.

Jeremy Schmitt:                25:27                    They are forced to grow due to their investors. So rather than getting smart deals, which you teach, they teach, you know, just spray and pray. Yeah. Let’s pick up as many as we can at any one time. So we see a lot of their deals. He ain’t taking place in the brand new plastic buildings, which guess what? Those are the most expensive and no matter how nice something is. If my property is better located and better designed and tailors to a specific traveler, say a business traveler, cause it’s close to the convention center, I know I can make as much money if not more money than them. So I know that they can’t be pushing rights that much higher and I see their rates and they’re not so their profit margin, you know, their level of safety, their margin of safety is this, you know, rather than what you teach.

Jeremy Schmitt:                26:22                    It’s like okay let’s find good smart deals. Let’s maybe go to a redeveloped class B building or a redeveloped class C building where the rent is for two bed, $2,000 versus $3,000 so you’ve already boom right there with that deal you’ve built in $1,000 of safety versus the VC players. But they do that because they’re forced to do it. Their goal is market share. You know, most of our goals is profitability. Profitability separates the professionals from the amateurs. So they’ve had different models and I think, you know, we’re going to see, you know, who’s really swimming naked as this tide comes in. I’ve been competing with Sonder and stay Alfred for a few deals here in Chicago and uone of them has already pull back on one of the deals.

Jeremy Schmitt:                27:15                    I’ve talked to the landlord. He’s like, yeah, they pulled back out at like the ninth hour. They were just like, Nope, we can’t take out any more deals and this would be full grown. Now that this has hit, I don’t know. So it’s just different, you know, so that’s why I really respect what you teach. It’s like, let’s do arbitrage, but let’s just do it smart. Let’s not try to take on $6,000 a unit because it looks beautiful and cool. You can make it look beautiful and cool with your beautiful design. Bring in a professional designer, and make up for that cost. Make it cool and then bring in a professional photographer, make it pop and it’s gonna look just as good as their brand new class A building that costs two times as much.

Julian Sage:                       27:57                    So do you think that this model, because I never really thought of it that way that the investors are pushing them to really pick up more units. Like you said, it’s not about the profit. It’s about the, the, you know, what’s their market share. When you’re looking at these companies, you’ve seen beautiful branding, you’re seeing beautiful apartments, you’re seeing, really expensive furniture. Everybody’s looking at this and they’re like, man, these guys must be killing it or something. But what you’re saying is they don’t care about what their profit is. They care about how much, how much market share compared to everybody else is, if I’m getting that correctly.

Jeremy Schmitt:                28:33                    Correct. Yes. Well, they are forced to grow because in essence, the basis of a venture capital investment is the investors want to 100 X their return.

Jeremy Schmitt:                28:50                    So they’re going to push there portfolio companies, such as the Sonders to stay upwards to grow as fast as possible, to build revenue as fast as possible. Because they’re seeing the Sonders to stay upwards make X amount of margin because times are good. But if we’re being logical, we’ve been in an extended bull market for a long time, they’re not going to be able to make this as long. And when Corona hits closer to this or maybe even a negative, so we don’t know how sustainable it is. Hopefully, those guys are great guys. I’ve met some of them, I know how much they spend on their furnishing and everything and I think it’s a little too much. But they have big capital partners. I actually heard Simon Lehman, it’s funny he’s one of the major really vacation rental guys, and he said about them, it’s like they need to unlimited cash, unlimited cash to run their business through good and bad times.

Jeremy Schmitt:                29:50                    Just the fact how fast they’re growing. Sonder has fidelity backing them and some other people. Maybe they do, maybe they don’t. But I think for the majority of these VC players, they’re hurting a lot. And as not as much cash is liquid anymore in the market and just the major macro markets as it was six to three years ago they could easily turn over within a month or three months.

Julian Sage:                       30:19                    That’s one of the things that even, you know Jon and I were looking at our business and we’re saying, you know, moving forward into the future, the majority of the portfolio that Jon has right now is this asset heavy master lease model, about half of it though, is the management co-host asset light.

Julian Sage:                       30:40                    So moving forward though, do you still see that there is potential for us. We’re not venture backed. We’re bootstrapping it, we’re trying to be scrappy. Taking those, like you said, those DC properties and really pushing the profit boundary where we’re always thinking profit first rather than quantity. Do you see arbitrage still being a profitable thing even during a downturn or is it mostly just gonna be focused on the cohost model moving forward? If we are in more of a bare market?

Jeremy Schmitt:                31:17                    In a downturn, yes. In a disaster, no. So we’re in disaster epidemic mode. Nobody’s traveling. I was at a ULI conference. Historically travelers travel about the margin for hotel travel decreases about 25% when a recession hits.

Jeremy Schmitt:                31:41                    So people still travel, people still have to travel. There’s really just, so you have to think about that. You also have to think about your types of travelers. You know, are they leisure? Are they business travelers? Now they travel for different reasons. Your business travelers are going to be more, any elastic, they’re going to travel more often because it’s their work laser is going to travel a little bit less. Mmm. I think it absolutely can during the downturn, as long as you consider that 25% buffer, as long as you’re making smart deals, not necessarily rushing into these brand new class eight buildings because no, they look super pretty. You know, it’s Mmm. For the local guys, you know, to your point about a smaller not being DC, I think it’s on one of the only ways it’ll ever work because our business is about being hyper local, you know, and providing a great service ongoingly.

Jeremy Schmitt:                32:35                    And when you’re hyperlocal, you tend to build relationships with the local community and you should know where you can find the best deals. Uand it takes time and relationships and you have to add your value on where you can. Ubut I do absolutely think during a downturn, but not during a disaster like this. I think everybody’s hurting.

Julian Sage:                       32:55                    Right? And that’s, that’s why I appreciate you coming on here, Jeremy. You know, talking about those pivots what we’re, what we’re trying to do to be able to just make it through this disaster moment. But I’m really curious, you know where we’re going to see in the future, you know, this short term rentals, you know, they’ve been around for a while but not like, not like right now we’ve, we’ve, Airbnb really came during this time where it’s like they came right after, you know, right, right after that kind of recession where people were trying to get more creative, find different ways to be able to save money.

Julian Sage:                       33:26                    And now we have all these businesses, you know, you, me, everybody that’s been on the success stories, this is really kind of a first time for us to experience something where we’re going to be going into this you know, potential bear markets. So how we, how we move forward is, is, is really curious. So I’d love to have you on, you know, in the future, Jeremy, I think it’s so cool to be able to see your PR, your progression, see where you’re doing. And I love that you, you wanted to share with the, the host nation community. Your advice. I’ll include a link down in the description as well for that book. Is there anything else that you wanted to share with anybody? Any, any words?

Jeremy Schmitt:                33:57                    Thank you for having me, Julian. As always, you’re great. This is invaluable for people who are listening.

Jeremy Schmitt:                34:05                    We’re in Chicago. We’re also investing in South Florida area. Anybody is in those areas. You can find us on Instagram. We pivoted. Our investor company is called the pasion group, P A S I O N Group. But on Instagram or Airbnb profitpros. That’s where we’re sharing a lot of what carry on knowledge and know-how. It’s Chicago residents club for our business, if you want to see it in action. So those are the two places where you can find us. Or you can always email me at jw@chicagoresidentsclub.Com. I’m always happy to chat and just help people. I mean, it’s really hard, you know, and I’m lucky to have really good partners and people and to talk to unlike you, Julian, thanks for having me. You know, now, it’s just the time that we all help each other and no, let’s get to the other side and wait till these waters calm.

Julian Sage:                       35:03                    I appreciate it. Well, thank you so much, Jeremy. And until next time, host nation, keep on hosting. Hope you hosts benefit from the show. If you found value, please go on over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to hosts that have been featured in these episodes as well as the community, go on over to our Facebook group that the host nation.