Ray Vargas:                         00:00                     Soon after, we started getting phone calls and emails from local realtors that were like “Hey, thank you so much for creating this business. We’ve been dying to work with people like you because we have so many interested buyers that want to rent their property, short term.”

Julian Sage:                         00:15                     This is episode number 37 of the short term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed? Go to cohostit.com for more information.

Julian Sage:                         00:27                     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. 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.

Julian Sage:                         00:54                     Hey, what is going on Host Nation family. I just wanted to say happy Thanksgiving. So I wanted to just take a moment to not get like super gushy with you guys. I do that a lot with you.I just pour out my feelings, but I wanted to say that I am just super grateful and super thankful for this community that we’ve been able to build and this family. I love being able to read your guys’s posts in the host nation Facebook group and then also being able to talk with some of you a little bit more personally and finding out where you are and what you’re trying to do in the BNB empire builders mastermind group. It’s just so cool to be able to be a part of something and to have some people that really, it feels, it feels like family.

Julian Sage:                         01:35                     I’ve met so many really good friends and you know, continue to build these relationships with all these hosts that have been on the show and seeing where they’re going and staying up to date. And I’m just super thankful. So really you all have changed my lives. So you know, dramatically I’d never would’ve thought that I’d be doing what I am today, still serving in the coast guard and being able to pour my heart and energy into you guys. So I hope that you’re able to gain some value from the content that we’re putting out just because I really appreciate what we’ve been able to build together. We are 37 weeks in now and it just feels like, it feels like it was yesterday when we started this podcast thing in the short term mental journey together.

Julian Sage:                         02:17                     So I’m continuing to grow. Cohostit is continuing to take on more clients and people and it’s just so cool. I’d never would’ve thought that we, you know, we’d be doing this and I wanted to thank our special guests for today and that is Ray and Vanessa Vargas, the newly wed couple that decided to convert their mother and daughter live in space in their house into an Airbnb unit. And within 45 minutes of going live, they got their first booking. Since then, it’s been rented every single weekend. For the last three and a half years. Ray and Vanessa realized that there was just a huge business opportunity within the Airbnb short term rental space and thought what it would be like managing other people’s properties. In 2018, they took the leap and founded Home Sweet Hudson, being the first in their market to provide property management services and it gave them a huge advantage to starting to building their portfolio of properties.

Julian Sage:                         03:08                     Now Ray and Vanessa manage over 25 properties and are continuing to grow and scale their short term rental business. This is an awesome episode where we’re talking about really dominating in a niche and also the scaling factor because Ray and Vanessa really we’re dealing with a lot of personal struggles with hiring additional people because it would take such a big chunk of their profits. So Ray and Vanessa talk about that experience of hiring a full time person and scaling and that whole experience and really dominating a local market, which if you all have the opportunity to become the subject matter expert in your area, and I think that this episode is just so cool because it makes you realize just how network-driven this co-host model is and really how all of this can just happen so quickly. I mean these two have only started in 2018 and now they have over 25 properties and this is a full-time thing for them. So if you like my show notes for this episode, go to shorttermsage.com/STR37 or if you like my show notes sent directly to your inbox every week, then go to shorttermsage.com/shownotes. With all that being said, on to this week’s conversation.

Julian Sage:                         04:10                     Hey, welcome back host nation to another episode of short term rental success stories. In this episode, I have the special honor of speaking with Ray and Vanessa Vargas. Vargas, Correct?

Ray Vargas:                         04:22                     Correct.

Julian Sage:                         04:23                     All right. Let me, let me redo that one.

Vanessa Vargas:               04:26                     I will be a Vargas next Saturday.

Julian Sage:                         04:32                     Okay, I’m including this now.

Ray Vargas:                         04:34                     After we get married.

Julian Sage:                         04:36                     I’m including this now. We are officially, because by the time that this episode is out, you are going to be Ray and Vanessa Vargas. Well again, congratulations on the ceremony. For those of you listeningthey are actually flying out to Puerto Rico and they are going to be getting married. So congratulations to Ray and Vanessa. But so just if you wouldn’t mind introducing yourself, let the host nation know who you are and what inspired you to get into short term rentals.

Ray Vargas:                         05:06                     Sure. Yeah. So I’m Ray and I’m actually a native of the Hudson Valley was born and raised here, although I left when I was 18. I’m 40 now and so I’m moving back into this area. About three years ago it was a bit of a homecoming. For the longest, my career lied in new business development specifically in advertising for both print and eventually digital media. And I think what really inspired me to get into this industry really is just the lifestyle that it affords and also the opportunity to give back to a community where I grew up in. And I think it’s really exciting to be able to help small businesses, we created jobs. For me that was very inspiring.

Vanessa Vargas:               06:03                     Yeah. And I’m Vanessa. In my former life, I was a public relations manager for wine and spirits company. And I think very similar to Ray. It was just really inspiring to be able to give back to the community and really just be able to kind of make our own schedule and live our own life. I’ve never thought about being my own boss, but being on the side of his is a lot of fun. So it’s been a really fun journey so far.

Julian Sage:                         06:27                     So you, you to give a little pre, so you have a 25 properties that you are managing right now in the Hudson Valley, New York area when, because both of you quit your jobs. These are like full time jobs. I know Ray, you were saying that you actually got laid off and that you were looking for some work and that’s what kind of led. So w so what was it the initial, like what got you into the short term mental space? What was it about that?

Ray Vargas:                         06:55                     Well, I think it actually started when we purchased our house here about three and a half years ago. And we both were working for companies based out of New York city. We were traveling a significant amount of time and so we decided to convert the mother daughter live in space of our house into an Airbnb. It’s a one bedroom it has a little kitchenette in the bathroom with its own private entrance. And that’s an, I actually added Airbnb travelers. We’ve seen it from the other side. We love it. And so I’m just for fun really. We were like, Hey, let’s our apartment on Airbnb. And so we realized that there just wasn’t a lot of local resources to help us manage the property. You know, and being that we traveled so much, it created a lot of pressure and there lies the business opportunity. And once we realized that, Hey, what would it be like to manage other people’s properties? I think that’s kind of what, what’s wrong.

Vanessa Vargas:               07:58                     Yeah. And as, as we started doing research, we strangely enough found that no one was doing it in our area. And if you don’t know New York, a lot of people are familiar with the Hamptons being like the quick getaway from New York city. But this area of the Hudson Valley has quickly become another one of those areas where, you know, people will just take a weekend and go up to the Hudson Valley to get away. So it’s a good staycation area. There’s a lot of mountain climbing and things like that. And so it’s become a huge tourist destination. And no one was doing it here. So we were the first to market, which gave us a huge you know, kind of headstart in building a portfolio of properties.

Julian Sage:                         08:40                     Yeah. A couple of couple of things that I want to go off of that. So I’m looking at your website right now and while these places are absolutely beautiful, are these, are these units that you are designing and working with the property owners or are these like, are they like all staged homes and nobody actually lives there?

Vanessa Vargas:               08:57                     So I’m, they’re all, I’d say almost every single one of those properties are, the owner uses them part of the time. We got really lucky, like these homes are beautiful and we got really lucky in that we have a lot of owners with impeccable taste that kind of caters to the people that are coming up to our area. Sometimes we do give direction to the owners in order to make the properties ideal to market to the person coming from New York city that’s used to like, you know, luxury style living. But for the most part we’ve kind of gotten lucky in that. But I’d say we balanced that along with kind of seeing what people are looking to rent. And we’ve learned along the way and are slowly starting to filter out properties that might not be ideal and trying to really focus on you know, higher end properties with the amenities that, that folks you’re looking for

Julian Sage:                         09:52                     Now, the Hudson Valley, I’m not sure exactly where that’s located, but I know in New York it’s, you know I imagine that it’s very seasonal. Are these properties only rented out during a certain time or this are these year-round?

Ray Vargas:                         10:04                     Well, it’s interesting. We actually started our business last year around this time and at that point we had taken on about three to five properties and they all started to book pretty quickly through the fall and winter season. And the occupants who rates were significantly high especially for properties that had never been on Airbnb, they were brand new to the platform. And, you know, we were just getting started. So now that we’ve gone through our full year, know, it doesn’t feel seasonal. I think we’ve been pretty consistent through every single season.

Vanessa Vargas:               10:49                     Yeah. It’s a, it’s a drive to market so people can come up last minute. So you know, even if it’s snowing here, you know, it’s more fun and prettier to be up in the mountains then, you know, in the city dealing with slush though I think people find reasons to come up. I think a lot of the times being that our homes are so beautiful, the home becomes a destination and there is skiing and things to do year round. So whether it’s, you know, spring, summer, winter, fall, it’s, it’s kind of become a really evergreen market.

Ray Vargas:                         11:20                     Yeah. Actually this is our first time going through the foliage season where the leaves change color. So there’s a big demand of people coming into the area just for that.

Julian Sage:                         11:31                     Now I’m looking through some of your photos as well and I don’t know who’s doing the photos, but these are a very spectacular and I love some of the detailed shots of like, I’m looking at this one where there’s like a guy sitting or laying over the couch. And then the next photo is like of this journal. With this, it almost looks like a little Pinterest picture. Like who, who’s the one that’s coming up with this stuff? Do you have a dedicated person or is that you guys?

Vanessa Vargas:               11:55                     Yeah, we do. We work with a photographer named Derek and he’s been awesome. He’s in almost all of our properties at this point. He’s just super creative. We don’t really have to give him much direction. He has a really great eye and I think he kind of understands our target really well. And so yeah, it’s been a really great partnership working with him.

Ray Vargas:                         12:15                     Yeah, no, we love Matt.

Vanessa Vargas:               12:17                     He does drone footage too, of what the property, he does video tours that we can use to tease on social media. So he’s been a big part of our success for sure.

Julian Sage:                         12:26                     Right. Yeah, I definitely want to go into, you know, you acquiring the properties. I, you know, being in this high, higher end area, I imagine that it’s, yeah, maybe not as easy. Maybe it is as easy as knocking on the door, but curious about that. But having this this marketing background, are you guys utilizing your experience to advertise your properties? What w what is your strategy with this?

Ray Vargas:                         12:49                     Yeah, so we are working really hard to get to a point where we can focus on marketing, and we have done some stuff through Instagram. Obviously Airbnb itself is its own marketing platform. But as you know, since we’ve only been in the business for about a year, we spent a lot of our time just learning what it takes to be a property manager. But yeah, we have a lot of great ideas that we want to roll out pretty soon.

Vanessa Vargas:               13:18                     Yeah. Yeah. And I think it’s, it’s interesting being that we were the first bill company in this area, a lot of folks have found us, so we haven’t really had to do too much marketing. Yeah. So like Instagram has been a great platform for us because even with minimal effort, we’ve been able to kind of get our name out there. And also through just like talking to realtors and you know, Ray has a lot of friends in the area, so like just kind of networked and talk to people and, you know, friends have shared our information with others or they find us organically online. But we have tons of ideas on how we can build off of that in the future for sure.

Ray Vargas:                         13:58                     Yeah. What’s interesting is that my background is in sales. So when we were putting together our business plan, I had this whole strategy of how, you know, I was going to prospect and research and like cold call people. And once we got our website live and we started to network with a few realtors and I started to tap into some people that I know locally, all of the business just started to come to us.

Julian Sage:                         14:26                     So realtors if you can kind of expand on that, because I know realtors, th there’s gotta be something in it for them. They’re not just going to be giving you their rental properties. So what type of relationship do you have with these people?

Ray Vargas:                         14:40                     Well, I think the realtors that we work with realize that there’s a lot of value and partnering with people like us that understand, you know, what are the projected revenues for certain types of properties. So to give you an example it’s often where a realtor will say, Hey, listen, I have a prospective buyer from New York city is looking to purchase a home in this area that they’re looking to rent short term. And so we put together projections based on the size of the house, where it’s located. We know all of the market data of comparable homes that are already short term rental properties for many years and how much they’re, they’re generating. And so what happens is that Ray able to provide them with that information to help them close sale.

Julian Sage:                         15:34                     No, I think that that’s, that’s brilliant from the way that you’re looking at it because you’re basically teaming up with them so that they can be able to make the sale. Maybe someone’s on the edge of, I don’t know if I should purchase this property because I want to be able to short term rent it. And a realtor happens to know that you guys are a subject matter experts and they can partner with you to be able to help get a person, you know, over that edge to, to make, make that purchase. I think that that’s a brilliant. Because you were talking about the sales process and prospecting. Were these just from like a few major realtors or were you going out? What was your strategy with, with networking?

Ray Vargas:                         16:14                     Well, interestingly enough, you know, we didn’t really, realtors started to reach out to us once they realized that we existed. And it was all really coming through Instagram. So one of the first things we did was we developed, we got our LLC we created homesweethudson.com and we created our Instagram handle. And so we just started posting content. And you know, soon after we started getting phone calls and emails from local realtors that were like, Hey, thank you so much for creating this business. We’ve been dying to work with people like you because we have so many interested buyers that want to rent their property short term.

Vanessa Vargas:               16:56                     Yeah.

Julian Sage:                         16:57                     So you were, you were, you created the, the website, this was before you had any properties. Correct. So you created the website, you created the Instagram, and then you started targeting real estate agents on Instagram.

Vanessa Vargas:               17:09                     No, they, they sort of organically started to find us and not really sure how that that happened.

Ray Vargas:                         17:14                     Yeah. They, they, I mean it almost seemed like just a few days after we went live with our website and Instagram handle, they found us.

Vanessa Vargas:               17:23                     Yeah. I mean we had talked about the idea of actively reaching out and setting up meet and greets with realtors to kind of educate them on the business. And it just sort of happened without us having to, to initiate contact with them. And Ray has some friends that are realtors in the area. We talked to the person that sold us our house. About, you know, he wasn’t that familiar with short term renting. And so we started talking to him and the were just kind of spread. So I think talking, just talking to you never really know how to connect with others.

Ray Vargas:                         17:52                     Yeah. Interestingly enough, during that time when we were starting the business, we were doing some renovations to our house and the contractor who was doing the work, which is a childhood friend of mine that I’ve known since high school, was literally there when I like lost my job and I was trying to figure things out and I was like, they’re building stuff here. And I’m like, you know what, I’m just going to go all in on this business. And so once we went live, he was like, Hey, I know someone that just remodeled their house and maybe interested in, that’s actually how we got our first client. It was through word of mouth.

Julian Sage:                         18:29                     So walk, walk me through the process because these are some, you know, really luxurious houses. And you guys are charging, you know, significant significant prices for these to a person are, are these just all people that are ready to start short term renting their properties or do you have to kind of come up to them? Do you have like a package, a presentation, a what? What’s your process with onboarding a new potential client?

Ray Vargas:                         18:54                     I think this the first where it starts really is just having, usually it’s a conversation over the phone because they live in New York city. And so in that conversation we ask a lot of questions in terms of, you know, what it is that they’re looking to do what type of property or what type of goals do they have in terms of short term renting, how often do they want to use the property because obviously that’s very important in terms of us deciding if it makes financial sense. And then if we feel that it’s a good fit based on the conversation we scheduled a walk through and usually we’ll meet them on the weekend and take them a walk through of the house.

Julian Sage:                         19:36                     Okay. And are are these people that are like ready to start? Short term renting or are yoy giving, like pitching people that are renting their properties or anything like that?

Ray Vargas:                         19:48                     Yeah, you know, I think the conversation is just is more educational than pitching. I think most of our clients love the idea that and where it seemed to be super motivated from the beginning. What, what would they lack was just really understanding all of the ins and outs in terms of, you know, the day to day is all the services that we provide. Insurance liability things of that nature. So I think really we focus on just helping them understand how it works and all of the benefits that come with converting their property to a short term rent.

Vanessa Vargas:               20:26                     Yeah. And I think, I think most of our clients, if not all, had already decided they were interested in the idea of short term renting but didn’t want to take on doing it themselves. Yeah. So that part was kind of already, you know, they’re, they either have families or they’re traveling for work all the time or live outside of New York and LA wherever and have said, you know, I want to keep this house, I want to be able to use it sometimes, but I don’t want to take on the responsibility of actually executing, you know, the, the rental management.

Julian Sage:                         20:57                     Okay. And so, you know, you guys created the website, you created the Instagram handle and then you networked with people that are in the real space, real estate community. And that’s how you built up to your initial bundle of properties. And then from there it’s just been all organic. You’re saying that they’re just coming to you now?

Ray Vargas:                         21:18                     For the most par, now we’re getting a lot of referrals from our clients. We’ve also been in contact with the local chamber of commerce, In that we found some leads as well. Again, we live in a very small town, so just being out and about and just constantly talking about our business with people, especially with local service providers who we rely on very much. So I think there lies a lot of lead generation as well.

Julian Sage:                         21:48                     Now, because you guys said that you were coming into a market where there really wasn’t a dominant player in that space and you guys are coming in here and you’re trying to basically set the standard. How are you able to communicate with let’s say for the new investors that are out there that maybe there’s not too many people that are short term renting. How do you set the expectation with people there is not maybe a good amount of market data available?

Vanessa Vargas:               22:19                     Well, there actually are a lot of people that short term rent, but it’s a lot of people that either live locally or are managing it themselves. So there’s a big pool of Airbnbs that exist in the area. I think it’s just there’s less people or no one realized the need for those that wanted to do it, but just don’t live close enough to do it themselves. But I think that there has been enough Airbnb or short term rentals in the area to give owners a good idea of what they could stand to generate through their property. So I think we’ve set pretty good expectations in the owners have I’ve been happy with where they are today for sure.

Ray Vargas:                         22:58                     Yeah. We also have our own Airbnb that we’ve been renting here for the past three years. We had that data to share. And we also relied on air DNA which you probably know is a platform that provides data based on homes that are renting on Airbnb within this area. So that was probably one of our first investment because it’s a subscription based. Yeah, that was very helpful.

Julian Sage:                         23:27                     So you guys decided on a 25% management fee, where did you come to that number? What type of services are you providing with that?

Ray Vargas:                         23:39                     Yeah, I mean it basically includes everything that comes with short term rental management. We came up with the number based on some research that we did within other markets across the country. And when you think about the type of properties that we manage, they’re pretty big. You know, they’re three, four or five bedrooms. They have pools, they have hot tubs. There’s a lot of different things that we are responsible for in terms of making sure that not only is the house ready for guests, but that it’s always in great working conditions for when the homeowners are using. So I think that’s kind of how we came up with that percentage.

Vanessa Vargas:               24:25                     Yeah. I think when we started, we actually, we were originally going to offer three different packages of different percentage points and quickly realized that you want to be able to manage the entire process and not really make things ala carte because then you’re not in full control of how successful the property can be. So we just switched to one flat percentage.

Julian Sage:                         24:46                     No, I like that.You’re trying to create a system that will make it easily easy for you to be able to track and manage the growth. And if you are kind of doing that ala carte, you know, maybe there’s going to be things that on the owner’s side, maybe they’re lacking, which can also ultimately hurt your guys’ performance of your portfolio as well. And this is how you’re making your income now.

Ray Vargas:                         25:07                     Yeah. I think another point to make is that we offer a concierge service where we have partnerships with local business and service providers. So if a guest was interested in having a private chef, a massage therapist and yoga instructor to come to the property to perform the services, we actually helped create those itineraries, which is no cost to our clients. We actually don’t charge any money for organizing. Those experiences. We see the value in creating unique experiences for people so that a, they give us a nice five star review and also refer us to their friends and hopefully come back to visit the property again.

Julian Sage:                         25:56                     That’s like the the Airbnb Lux experience. I know that that’s the concierge services something that they’re providing. So you’re creating these relationships with these business owners. You know, that, that’s good for the community. It’s also good because maybe you can also tap into their network as well. How are you doing this that you’re able to get these good deals with these service providers, support for your guests?

Vanessa Vargas:               26:22                     Just really talking to people and letting them know what we’re doing, letting them know about the kinds of properties that we’re representing and kind of who’s staying at those places. And I think they inherently will see the value in offering maybe a small discount or something special that isn’t available in store or things like that. So I think it’s easy sell at the end of the day.

Ray Vargas:                         26:45                     Yeah. I mean, that kind of partnership is such a win-win for everyone involved. Right. again, growing up in this area, I have a lot of friends who are business owners who own restaurants who are, you know, massage therapists or yoga instructors. So it was really easy to access those people and sort of present these opportunities. What’s nice too is that certain restaurants which we’re working towards now are open to offering exclusive discounts for our guests if they mentioned home sweet Hudson. We’re actually trying to create something unique in terms of coding but there’s so many different ways to help the community in that way.

Julian Sage:                         27:29                     I love it. You guys are doing, doing all the right things. I love the website. You know, it’s simple. It’s clean, it’s beautiful. You guys are going definitely above and beyond with your service. Did it come to that point where it was like the tipping point where it’s like, okay you know, right. You were talking about how you were laid off because of the downsizing and Vanessa that you decided to come onto this when, when was it, that point where it’s like, we can actually really make this into a full time income that we can, you know, scale and grow and be able to live off of?

Ray Vargas:                         28:03                     I think we kind of knew that from, from the beginning. In terms of the earning potential. I think the tipping point for us going all in together and just leaving our jobs 100% was specifically on a day where so in the morning, so Vanessa used to commute into New York city every single day. All right. And I used to drive her to the bus station so that she could take the bus down. I’m at five 15 in the morning and at this point she was doing an incredible job. I mean, literally two full time jobs, not to mention coming off although very difficult health situation. And she, she was overwhelmed. And I remember vividly her, I’m getting very upset at me for no apparent reason that morning. And I remember her leaving and I was sitting down at lunch, you know, I thought about, okay, where are we financially? You know, we’ve got all these bills, we own a home. But at the same time I realized that in order for us to really scale on tape take off, we needed to be full time. So I texted message her that day and I will say, it’s time for you to put in your two week notice for my own health and for the safety of our business.

Julian Sage:                         29:25                     So both being a team, property managers, what type of responsibilities are you guys assigning to yourself? So how do you split it up for a couple that wants to get into the business?

Ray Vargas:                         29:39                     So I think in the beginning we were both sort of like doing everything together, literally cleaning the properties ourselves and really just understanding what it takes to prepare a short term rental property versus a regular residential home. But then as we started to grow and we started to find local people that were able to help us, we started to create roles and responsibilities. So I think for me, I was more of the new business/operations manager and Vanessa did basically all of the client facing, client servicing.

Vanessa Vargas:               30:22                     So all the client communications, guest communications for the most part and a little bit of social media that we started doing. I was helping to put that stuff together. Yeah. As well as well as the listings. And so like managing the onboarding process was probably the largest part of my role in the beginning. So drafting the listings, working with Matt to schedule a photo shoots and stage the properties putting together a welcome book and kind of overall understanding of the property and how we wanted to market it.

Ray Vargas:                         30:54                     Do you know, maybe you should talk a little bit more about the welcome book and just drafting the listing. She does a great job, communicating through the listing. You know, all of the pre features and amenities that the property offers and that there’s actually a professional management company overseeing the property, which I think is super in terms of sort of getting in front of people that are looking to party or do anything that could be unwanted at the property.

Vanessa Vargas:               31:27                     I think my approach is really just to– So people might be looking to stay at a place for their all, you know, whatever reason, if it’s a special occasion or just a weekend getaway. But I think it’s also nice to communicate the potential of the property. You know, what it’s proximity to some cool areas might lead to for you. So kind of taking them above and beyond just like, you know, how many bedrooms and bathrooms and things like that to kind of, you know, is it someone’s birthday, would you be interested in having a private chef or you know, holding a wine tasting at the property or you know, kind of teasing up some of the cool areas that you’re close by and what those places offer.

Vanessa Vargas:               32:13                     And one of the things we started doing within the first few months of our business was, so during the onboarding process, we do an overnight at each of our properties. So we stay at the property ourselves. So kind of just pretend we’re guests, walk around the property, test things out, see what questions guests might have. Use all the different amenities that are there so that we can sort of really tell people, you know, what they expect, what’s really cool, what’s really special from, you know, a backyard that’s perfect. Stargazing to, you know, a really quiet property that’s you know, has a fireplace and there’s a perfect place to read a book. So just really making each listing super special and unique based on what it offers. I think that was a huge help and being able to do that.

Julian Sage:                         33:01                     I love that you walked through that process because I feel like a lot of people are thinking like, Oh, well I have to, I have to do a, a very low management fee because there’s companies like evolves that are coming out there and they’re offering like 10%, and you know, they’re thinking, Oh, well, if I’m going to be able to compete with that, then I’m going to have to charge, you know, something around there. But you guys, you know, you’re onboarding your, their process. You’re, you’re really invested into these properties. You’re going there, you’re staying in these properties, you know, the local connections. You’re, you know, this, this is your home, these are your people. So I think that that is, you know, I think that that’s really cool because you guys, your value is there. And, and you know, I think that that shows through the, the quality of the photos and the descriptions and the amenities that you’re providing completely for free. I think that is just really awesome. What has been the most challenging part of, of scaling this business? I know you guys made it sound kinda easy, but I’m sure that there was maybe something there. There was something there.

Vanessa Vargas:               34:03                     Yeah. We were talking about this earlier and I think housekeeping was one of the things that was really challenging. Learning how to schedule people and offer consistent turnovers, which Ray did a really great job of. And, and then just like operationally, you know, when you’re at even 10 properties, being able to physically go out and handle things, get toilet paper where it needs to go and handle any sort of damage claims, it’s a lot. So before we reached the point where we were able to hire an operations manager, it was just Ray and I running around to different properties and getting things where they need to be, which becomes difficult from a logistical perspective in between reservations. Those were the biggest challenges. Oh. And accounting, which is the other thing.

Ray Vargas:                         34:53                     Yes. So I think in the beginning, housekeeping was a biggest challenge, just finding people that understood how to turn over a short term rental property versus a residential home where someone’s living full time. And so I think that’s why Vanessa and I decided to do the cleaning ourselves in the beginning just so that we could teach ourselves and develop home sweet Hudson cleaning standard. As you know, staging is very important. You know, hospital corners, folding towels, leaving a gift, things of that nature is all stuff that we had kind of compiled and put together before we started interviewing people to do these services. As we started to grow, Vanessa did a really good job of teaching herself all of the accounting that comes with this business it’s tough. It’s a lot of transactions. When we were at five, 10, 15 properties, we were okay.

Ray Vargas:                         35:55                     But then we started to realize we were in over our heads. I think we’re happy to say that we finally found a company that we just signed with last. That’s going to be taking that over starting October 1st. And is this a local CPA that’s going to be managing your accounts or no, we, we tried a couple of local people and you know, I think they did the best they could given that it’s such a new industry. I think it was a big challenge for them to figure out. And so when it ended up happening is Vanessa has a hard time letting, letting things go. So especially with our client’s money, I mean it’s very big responsibilities. So no, we found, well actually this company found us somehow I think it was either through social media or a website and they, they reached out to us and we did a video conference.

Ray Vargas:                         37:02                     They seem to be exactly what we’re looking for.

Julian Sage:                         37:04                     Are these like a major company or are they kind of like boutique and just working with selected people?

Vanessa Vargas:               37:10                     They’re pretty boutique. They all kind work remotely around the country.

Ray Vargas:                         37:19                     Yeah. The name of the company is called stride and they’re very buttoned up. They’re very organized and sort of methodical in the way they we’re explaining how they manage our finances, which is what we were looking for. Some of these local accountants were sort of pooling information out of us where stride was like, these are the processes and methodologies that we use that will help manage your finances. Right.

Julian Sage:                         37:57                     Okay. Very cool. Stride. Yeah, we’ll include that in the show notes. I’m curious to look into them a little bit more. So I think that’s really cool. So the, the, the, your first initial challenge was finding those reliable cleaners. Your second was the the accounting but now you’ve built up to having an operations manager. And you also said that you also have som VA or multiple VA’s. When did that point come?

Ray Vargas:                         38:21                     So we hired our operations manager, which is Tony Garcia. I’ve known him since we were kids as well. Which he’s been such a big value to us. We hired him about three months ago. And it was interesting. It was at a point where, I don’t know if we were really able to afford him. I mean basically it was like cutting into chunk of our revenue, but we also realize that it was necessary. And so we, we took on the investment rather than expense. Definitely an investment. Yeah. And, and we’ve been able to grow so much more since then.

Vanessa Vargas:               39:06                     Yeah. It happened because we realized the onboarding process was taking longer than mostly because there are some things that sometimes did you get done in order to get up and running. So whether it be installing a security camera outside or painting that needs to get done to make the house look fresh. And sort of those kinds of little projects that would halt an onboarding and for small projects like that, it’s hard to get a general contractor to come in and just do a one off little camera installation or something like that.

Vanessa Vargas:               39:42                     So bringing Tony on board allowed us to get onboardings on much quicker and then also to address any repairs or damages that happen to our current properties really easily at low cost to the owner and keep things rolling without having to wait to schedule those kinds of things. So it really was a huge help to moving things along and getting properties up, running and booking quicker.

Ray Vargas:                         40:06                     Yeah. And I’d say once we got to around 18 or 19 properties is when we decided that we had to get virtual assistants for guest communications. I mean, Vanessa was inundated with messages over the weekend. And it was, it was tough. I’m actually impressed that you were able to do that with so many properties. Thankfully now we have virtual assistants handling that.

Julian Sage:                         40:34                     I’m curious about going a little bit deeper into that because a lot of people are probably, you know in that space where it’s like they don’t want to give up that control because you have to give that control to somebody else, but you’re also taking maybe a significant hit on your income which is also really scary. At what point did you decide like, okay, we need to hire the operations manager? Like how many properties were you managing at that point?

Ray Vargas:                         41:04                     Well, no, I think with Tony we were probably around 16 or 17 and then shortly after that is when we decided to hire virtual assistants.

Julian Sage:                         41:16                     And how much of an impact was hiring an operations manager and the VA’s to your growth?

Ray Vargas:                         41:24                     Oh, it’s tremendous. I mean, you know, Vanessa and I were just so caught in the day to day with the business. Once we were able to delegate all of that workout to Tony and the virtual assistants, it allowed us to focus more on new business. So during this time that we were growing, I would say on average we had anywhere between 10 to 15 prospects that were reaching out to us saying, Hey, we want to meet with you. We want you to come visit our property. But we weren’t able to spend that time with them because we were stuck, you know, trying to install ring cameras and getting the houses ready. So now most of our time is servicing our current clients, which I’ll be completely transparent. There were times where we weren’t getting back to some of our clients in a timely fashion. Mmm. I think all of that just had to do with how quickly we were growing. But now we’ve sort of circled back to being able to make sure our current clients are super happy and now we have a bunch of other prospects right now that we’ll be onboarding once we get back from our wedding.

Julian Sage:                         42:37                     So what does an operation, is this a position that you already knew that needed to fill these spots or, or you just kind of creating this where you saw the need?

Ray Vargas:                         42:49                     In the beginning as we were filling the need So Tony actually, I was working for the contractor that was doing the renovations in our house and so we started to use Tony part-time. Like, you know, he would just kind of do it on the side and help us once we started to grow and realize that we need and more than he was available. Mmm. We realized that we needed to make this a full time, a full time job. And so we made him an offer and thankfully he took it in. So his responsibilities really are, you know maintenance repairs. He now manages and oversees house keeping and scheduling. And he also is in charge of inventory. So we purchase shampoos, body wash all of the basics for the property in bulk. And he’s in charge of making sure that that stuff is sort of dispersed in each of the properties he’s done. He’s done a great job.

Julian Sage:                         43:58                     Wow. That’s a significant amount of responsibility that was kind of taken off of you. And now that you, you’ve been able to hire that out. That’s big. How many properties do you feel like you’d be able to scale up to now that you’ve taken those responsibilities off?

Ray Vargas:                         44:14                     Oh gosh. I think sky’s the limit. You know, the way we see it as, as we grow, our goal is to hire more people, right? And we’re actually training Tony to be more of a property manager so that down the road we can find someone to sort of fill his shoes so that he could manage directly, and help us with growing and scaling. I don’t think we know yet how many properties we want to sort of cap it. I mean, in the beginning we 25 and now we can get to 50 by the end of the year, you know, it’s tough, you know. But there’s a lot of work that comes with this and there’s liabilities and all that other stuff. So I think 15 might be the number we’re shooting for and then what we’re doing is trying to develop other revenue streams. So, Mmm. We’re working on developing an online course to educate are there people across the country and how to start their own management business. Mmm. And podcasts eventually too.

Julian Sage:                         45:24                     Awesome. I love it. Yeah. There’s so much potential for educating people and training people.

Julian Sage:                         45:32                     I love that you’re training Tony now to become a property manager. I think that that’s a, you know, such a cool thing when you, when you’ve reached a point where it’s like now you know, you’re ready to train someone up and take them under your wing and start giving them that responsibility to be able to really change their life. I think that that is awesome. Is there any products in your units that really is saving you time and money?

Ray Vargas:                         45:56                     You know, we do work with a company called public goods, so yeah, they’re actually saving us time and money because public goods. They have an array of different products. So instead of having to go to different stores locally to purchase these products and stock the houses with we can actually do everything from their website.

Ray Vargas:                         46:23                     And in fact we’ve developed the partnership. And so we were buying these things in bulk and just literally stocking our basement. They’re great products. They’re expensive for our clients.

Vanessa Vargas:               46:39                     They have a beautiful branding. They’re all sustainably packaged, healthy ingredients. So we know that we’re giving people safe products to use that look really pretty and look really high end. So I’m not hiding them when I’m taking photos in the houses. Yeah. They’ll kind of look and feel what we’re looking to achieve. So that’s one great product. We love, you know, ring hammers are another thing that we absolutely love. And then I think the tool that saved us the most time has been using Guesty, which is our PMs. I’m like, that has been such a time saver for us.

Julian Sage:                         47:17                     Right. What are the other services in the short term rental space that you guys are using?

Ray Vargas:                         47:27                     Guesty is one of them. We’re also using beyond pricing. So with our dynamic person tool, which has been great. Outside of that, that’s, that’s pretty much it.

Julian Sage:                         47:41                     Okay, great. And the messaging is that for Guesty, are you using the automatic messaging?

Vanessa Vargas:               47:49                     Yeah, we use auto messaging for trigger messages throughout the booking process. And then we do our guests communications using, they have a separate guest communications services package, which we have opted into. So that’s kind of what we use for messaging.

Julian Sage:                         48:07                     Okay, great. And you guys being marketing sales in this business aspect, are you guys collecting emails and doing like marketing campaigns or anything like that as well?

Ray Vargas:                         48:16                     Yeah, that’s a great question. So one of the things that we agreed to do when developing this business plan, we just got a new lead that came in. It’s almost, it’s almost everyday. It’s unbelievable. Mmm. Yes. So we use the CRM, so we proactively ask us to share their contact information, essentially opting in to receive marketing from us because what we’re working to do is offer direct bookings through homesweethudson.Com. it’s definitely a couple of months. We are a couple months doing that. So we definitely wanted to start doing email campaigns and social media stuff as well.

Julian Sage:                         49:00                     Okay. And what do you, what are you doing, what’s your call to action in order for them to want to sign up for an email?

Vanessa Vargas:               49:07                     Most people have kind of offered it up pretty easily. But I think what we’ve been thinking about doing is often like a percentage off of their next booking. If they share an email with us.

Ray Vargas:                         49:21                     I’ll tell you like the feedback from guests that visit these properties have been super positive. If you read our reviews, they’re just like “This is amazing! This is the best Airbnb I’ve ever stayed at! Definitely coming back.” When we make them aware that if they were to book direct where they can save on that 10 or 15% Airbnb fee, it’s pretty easy for them.

Julian Sage:                         49:46                     Yeah, I was just going to say what are you doing that has helped your guests leave positive reviews?

Vanessa Vargas:               49:51                     I mean, I think a huge part has been housekeeping, just doing an impeccable job of making the house clean and presentable. You know, and really checking in with them to make sure that they have everything they need to have a great stay. I’m offering up suggestions on things to do and kind of, I try to offer it enough information so that they don’t have to ask many questions. And then provide additional suggestions whenever I can. I think that’s been a big part of it. And then just having properties that are ideally set up for folks to entertain or just relax and focusing on that has been great.

Ray Vargas:                         50:32                     I also think, especially Vanessa has been sort of spearheading the guest’s messaging from the beginning. She’s done a great job with taking the initiative to reach out to folks before they get to their property to understand what it is that they’re looking to do, and really asking the questions so that we can provide local recommendations. Guests really appreciate that. And you can see it in the reviews. They mention it. Yeah.

Julian Sage:                         50:59                     And is there one house rule and thing that you’ve started including maybe in your cohosting contracts that is really kind of saved you before? That benefited you guys now?

Ray Vargas:                         51:10                     Yeah. I mean obviously no house parties, you know in fact we have a pretty interesting case study. It only happened once, which is interesting cause we’ve been doing this for a year and we’ve hosted hundreds and hundreds and hundreds of people. But we had detected through our ring camera that there was just my, I was getting notifications all night from motion. I don’t typically look at them just because we use it as a sort of a safe code in case housekeeping reports that there was a party. But I just happened to luck and we saw that there were like 20 young kids from, I think was at West point cadets and they were gearing up for a party. You could tell that it wasn’t going in the right direction. So we called Airbnb and we were able to take care of that. So having that, that rules, given that he broke that rule, we were able to ask them to leave the property and didn’t have to deal with any damage.

Julian Sage:                         52:16                     Awesome. And is there one thing that you’ve started including within your cohost contracts? That has really benefited you guys now or going back, you wish you would have started?

Vanessa Vargas:               52:27                     So we recently added or adding in an availability clause. So just like asking owners to give us a certain number of days of availability just to make sure that, at the end of the day, our partnership with remains profitable for everyone involved. That was a beneficial addition to our original contract.

Julian Sage:                         52:48                     Awesome. Okay. Very cool. Very cool. And last question, if you had to restart and do this all over again, what would you do differently if you had to start from scratch?

Vanessa Vargas:               52:58                     I think doing a better job of managing our client’s expectations. So like we recently started doing onboarding calls that would allow us to kind of really explain to them what to expect, what we can assure them that we do. And just really understanding the process. Most of our clients are brand new. They’ve never Airbnb before, so really educating them on what they can expect has been helpful in decreasing number of questions we get and emails we’re getting. So I think that’s really been essential.

Julian Sage:                         53:36                     And do you have just like a checklist or something that you’ve been going off of to be able to help with that onboarding process?

Vanessa Vargas:               53:41                     Yeah, I think we sat down and just brainstorm all the things we’ve learned and said, you know, what can we tell people when we’re first starting out in order to get them ready, and have them understand what this process looks like. And so we’ve just gone through an outline based on our best practices and the things we’ve learned mostly by mistakes and you know, can now help to manage the expectations in the future.

Julian Sage:                         54:04                     Awesome. Awesome. Very cool. And the last big question before I let you go to tend for the dog is what question do you have for a, another professional host? Maybe someone that is in a similar place with you or maybe that next level.

Vanessa Vargas:               54:21                     Ooh, that’s a good one. I think for me it would be, at what point do you start to in house managed services such as like trash removal and landscaping. We were talking about do we start doing like our own laundry? Like, should we get into laundry services and things like that. I’m trying to see like at what point is that really scalable and a smart investment. So I think that’s some of the things we’re thinking about now. Very cool. I would agree. Housekeeping, laundry is a big one. So if we, could I ask you any question? I’d love to hear how companies that are 50 plus, how are they handling their laundry?

Julian Sage:                         55:03                     Okay. Pretty cool. And that’s the ambition for you is that 50 plus?

Vanessa Vargas:               55:09                     Yeah, I think so.

Ray Vargas:                         55:09                     Check back in about two months.

Julian Sage:                         55:14                     Definitely. Well of course, that’s going to be so, so cool. And I’m excited to see where, you’re going with all the resources that you’re going to be providing to the community and yeah, definitely. I’ll include everything in the show notes, but thank you so much Ray and Vanessa for taking the time to tell your guys a success story and I’m excited to maybe have you back on the show once you’ve reached that 50 plus mark and then we’ll see how your operations are going at that point.

Vanessa Vargas:               55:38                     Definitely. We love to.

Ray Vargas:                         55:39                     Yeah, that’d be great. Thank you, Julian. This has been great.

Julian Sage:                         55:43                     All right, well, thank you so much and I’ll let you guys go get that door. 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, the host nation.