Jeremy Schmitt:                00:00                     Me having a partner who is in it for you know two to three years before I got into it was just invaluable because anybody can do this at five or 10 units. Then once you get to 15 and 25 and 30 it’s a different level of scale. You know on a different level of systems.

Julian Sage:                         00:17                     This is EPS number to seven of the short term mental Success Stories podcast.

Julian Sage:                         00:21                     Welcome back to short term mental success stories I’m your host Julian sage. This is a show where I talk to hosts about their journeys and starting in growing the shorter mental business. My goal is that you’ll be able to walk away with practical information they’ll help you become a better host and learn how to scale your business. So we had an awesome review you come in on i tunes that I want to highlight. This is coming from Little Leo 88 and they said five stars. I’m so glad I found star success stories. Julian always has great guests with a wealth of knowledge to share. This channel helps the beginner get started and the seasoned host tweak their listings for better reviews. This community that I’ve found from the podcast YouTube and Facebook group have proven to be so kind and helpful to so many people.

Julian Sage:                         01:01                     It’s so great to be able to bounce ideas off of others and here’s some other great successes. Thank you so much Little Leo I really appreciate them for that really awesome kindhearted review makes me feel really good and I want to actually announce that we are doing a giveaway so if you’re not part of the Facebook host nation Facebook group we’re actually doing a vacation giveaway because we all are about that vacation rental life. That’s why we listen into the show because we want to you know have vacation rentals but we need to take more vacations so we’re actually doing vacation giveaways. If you want to know more it’s actually really easy to do. You just leave a review on iTunes. Take a screenshot and then post that in the announcement. So this is actually going to be ending today. So you have until the end of the day to leave your review. Take a screenshot and then post it in the announcement section of the host nation Facebook group and we’re doing giveaways some really cool places that you could go.

Julian Sage:                         01:57                     I like barley can coon even light places in the U.S. like Daytona Beach and Las Vegas. So some really cool stuff. All you need to do for this giveaway like I said. Yeah that’s really yeah. I’m just super glad to be able to give back to you all. And to be able to do some vacation incentives and some fun ways to get more engagement and get you guys taking a break because we are all about that vacation life. But we need to start taking more vacations. Guys come on.

Julian Sage:                         02:24                     So today I had the honor of speaking with Jeremy Schmidt. Jeremy is the founder of The Passion group a short term rental property management company servicing primarily in the Chicago area. Jeremy started two and a half years ago with no prior experience but found a partner and went in as a junior investor. Working with this experienced property manager in the UK Jeremy was able to build his first management company help host to over 50 properties in a little over a year. But Jeremy decided to sell off his share of the company to his partner to be able to start his own style of management. The passion. This is a great episode that you all don’t want to miss. So if you want to see the show notes go on over a short term stage icon backslash Star 2 7 or if you like my show notes then get a short term staged a comeback says Jonas.

Julian Sage:                         03:13                     With all that being said on this week’s conversation Hey welcome back. Host nation to another episode of short term mental success stories in this episode. I have these special honor of speaking with Jeremy Schmitt Jeremy if you please would introduce yourself let the audience know a little bit more about who you are and what inspired you to get into short term rentals.

Jeremy Schmitt:                03:32                     Thanks Julian and thanks for having me on. My name is Jeremy Schmidt. I run a little company called Ashland group based out of Chicago. We’re here in Chicago.

Jeremy Schmitt:                03:43                     We’re in West Palm Beach. We’re also in Mexico City. I’ve been doing short term rentals for two and a half years. I had short term rental management company about two years ago sold it to my partners about a year ago and I started the passion group really focusing on creating a brand creating an operating model that’s focused on creating freedom for my partners. So I don’t take on a ton of clients but I take on a lot of partners and investors just because I believed in everybody thinking like an owner and when everybody’s thinking like an owner the results tend to be better because short term rentals are such a hands on business. And if you’re not high touch and you don’t actually care about you know your asset and guess you’re coming in and you know the whole experience then you know it just doesn’t work in the long term.

Jeremy Schmitt:                04:38                     So you have had the passion group for a little under a year now. We have twenty five properties mostly here in Chicago said to us on beach Mexico City and we’re also working on new short term development project in Tennessee which we’re really excited about which maybe we can talk about later but started here. I studied entrepreneurship in college at Indiana University and then I worked for a very successful broker developer here in Chicago and it’s really hard because it was 100 percent commission which was you know pretty terrible coming straight out of college but I got to learn. I’ve got to grow very fast and I’ve got to learn the language of real estate which is really huge in terms of being able to grow and scale my business here. So I worked under and made a lot of relationship chips here in Chicago for about five years and then you know I had a conversation with entities like Hey you seem like you’re ready to go off and fly on your own. So we did a couple of years ago and now we’re here.

Julian Sage:                         05:49                     And then how did you hear about short term rentals because you’re coming from a real estate background very heavy. What what brought you into short term rentals and did you make the switch entirely or you still have the real estate stuff going on on the side.

Jeremy Schmitt:                06:05                     You know I think it was a random dinner party where I kind of heard about this double blind. I had a friend in college. So I a really good friend too.

Jeremy Schmitt:                06:16                     He’s getting married this weekend but we were kind of part of an entrepreneur mastermind while we were at Indiana University and we heard our friend in Breckenridge was doing this property management company and you know he was an investment banker formerly and we’re like What the heck are you doing in Breckenridge doing property management. So you heard about there being bee stuff a little bit in Chicago because it was growing but then went and just visited my friend in Breckenridge and we just got talked talked through the numbers talked about kind of what it looks like and he was managing about 70 properties at the time and just absolutely crushing it. You know he’s basically he’s the boss of Bambi in Breckenridge you know still is in my thesis was hey what if we bring this too. This was before Sander and you know the big boys really came to the playground.

Jeremy Schmitt:                07:07                     My thesis was hey what if we bring this operating system which is typical for a ski town to metropolitan city. So we did we partnered up. I founded it brought on two team members found a couple cleaning teams and they became our cleaning teams and then ended up you know starting with one cleaning toilets and doing what a lot of people have done doing their own cleanings to growing it to be about 50 units before it was my time to really leave and sell it. I sold it to my my former partners and now you know that’s why I’m doing my own thing. But I was kind of happenstance you know lucky and you know seeing the opportunity and seeing where the holes could be filled in terms of you know professional you know a professional experience but still with that high touch you know intimate authenticity that a lot of air travelers seek.

Jeremy Schmitt:                08:08                     You know we wanted to bridge that gap. And that’s and that’s what we continue to do. You know because I’m not looking to bring on one hundred units here in Chicago I want to understand I think it takes away from the authenticity doesn’t allow people to really get that high touch you know local experience you know especially when the people you know aren’t owners you know are people that we work with are always owners so they have a vested interest in the property. So you know like I said we’re at about twenty five now and yeah we’re happy where we are we’re continuing to grow but we grow slowly and now we’re expanding into other markets like West Palm Beach Tennessee Mexico City.

Julian Sage:                         08:51                     You know Jeremy I just think that this is SoCal you’re probably one of the fastest growing you know property managers that we’ve had on the show you’ve only been in the space for about two and a half years. And just to kind of summarize what what Jeremy kind of did was that he he built up this property management company up to like 50 units. He had investors partners and then he sold it and now he’s started his own which is the passion group. I’m really curious though because maybe lots of people are getting into the space and they’re maybe you know they have the idea about selling their own property management or you know but how do you how do you how does that go about like how how do you build up something like that and be able to pass it on to somebody else and sell it.

Jeremy Schmitt:                09:35                     Yeah. You know it’s funny actually when I was at my former company I helped my partner in Breckenridge acquire another company and so we acquired another company of about 20 units.

Jeremy Schmitt:                09:48                     Luckily my partner had kind of that private equity investment banking background so where you do it there’s I mean the really simple answer is just meeting people in the industry or other owners you know and just sharing with them your story sharing with them who you are building trust with people in other markets and whatever way that can be that can be forums like bigger pockets on the can be events like Eric molars there being mastery. I think those are the best channels because those people know the business they’re passionate about it. They have a number of units and you know sometimes people are ready to move on the kids or they just want to have a different career. This is so time consuming in a very busy business or sometimes you know people are looking at it through an investment lens you know like you have your Sonders You have your Picasso’s you got those guys who are looking to just bring in more units because they need to satisfy their investors. So it’s just you know thought there are a couple of private equity players but you know the big thing is just building those relationships with people who are already in the industry.

Julian Sage:                         10:57                     Now you had this previous property management and this was a team effort correct. So you actually sold your your kind of share of that partnership to your other partners. Correct.

Jeremy Schmitt:                11:09                     So you could start your own. Yeah. So.

Julian Sage:                         11:13                     So with that so do you think that it’s a good thing or how is it better to maybe partner with people to scale. Or is it better to kind of do it on your own because now you have the experience with both.

Jeremy Schmitt:                11:26                     I’d say it depends on your background. Like anything like a person situation which is why I think it’s beautiful that you’re having this podcast and having guys from so many different lenses and that’s what we do when I consult people usually call me on a weekly basis and say hey you know how do you think I can bring on more units or if you’re a real estate background I’d say hey you know you know and you know local players local and demand local cleaning teams who are the most important people on your team. You know you can try and shoot for the moon and start with one and see if you like it. Otherwise you know me having a partner who is who is in it for two to three years before I got into it was just invaluable because you know anybody can do this at five or 10 units then once you get to 15 and 25 and 30 it’s a different level of scale you know on a different level of systems and a different level of just attentiveness and you know what.

Jeremy Schmitt:                12:25                     Where’s your focus because you can’t just manage that by yourself at that point. So having that partner in him being already through those that was so valuable for me I get to learn so much from him. You know he plugged and played his operating system. Yes. Brett here in Chicago and we had to really adapt it to the Chicago market just because it’s different. You know it’s like they’re not so much worried about guests there but like you know we don’t allow local guests here in Chicago because they typically throw parties and create trouble. So it’s like little things like that that you kind of hey you can grandfather what you’ve learned from there and kind of make it your own within your own community whether you’re in a major metropolitan city a ski town or each town. I’d say always going with a mentor or an adviser or our partner is so invaluable and I would always recommend it especially for the first year of six months to a year.

Julian Sage:                         13:22                     So how do you how do you kind of build. Because I’m curious when you first started you had this partner that had this experience so you were able to kind of work together and use him as kind of like a mentor but also as a partner how do you being let’s say for the new people that are getting into the space and want to partner with maybe someone else that already has properties how do you split up those responsibilities if you don’t have that maybe experience in the industry.

Jeremy Schmitt:                13:46                     Yeah that’s a tough sell you know because people who already are doing it and have properties like OK.

Jeremy Schmitt:                13:55                     For me it was bringing units to him you know and say Hey I know you have your business there like I’m going to grow this business and you know he took a little bit of a leap of faith in me but I mean you know the hardest part is finding clients you know and finding deals in this industry. So having the relationships of that and being able to speak the language was invaluable. You know for people who are kind of going into a management company I would say you know I’ll just start offering to work for free in all or just for you know they always need help you know what even if they have their own cleaning staff you know maintenance staff and whatnot you know they can always use inspectors that have better quality control so you can always often do that. You know they could always use an extra hand in messaging the guests as the guests.

Jeremy Schmitt:                14:44                     No. Most guests you know are easy depending on how you automate the system. But you know there’s some guests for high maintenance that can be very stressful for the owner. You know it’s just having a conversation and being man to man and being like Hey what are your big problem points. You know how can I help you take care of them and then from there you’ve got to deliver. Then you got to execute. I think that’s the big it’s the toughest part is hey we want to do this we want to do this but most people don’t know how much work it really is. Especially starting out you know at our point now it’s like we have systems where we can plug and play people are in and they’re like oh my gosh I can’t believe it’s this is you know and it’s still it’s it’s it’s actually not that simple it is you know we always say it’s it’s super simple but it’s not easy because you know it’s hospitality you need to know how to take care. But yeah that’s that’s what I would recommend. You know just having a man or a woman to woman man to man conversation you know saying hey how can I help. What are your biggest challenges. You know and it’s just like you know this is what I think I can bring to the table and I’d love to help you.

Julian Sage:                         15:49                     And so now that you’re kind of now that you’re you’ve you’ve got this property management company that you you’ve taken what you’ve learned from having this partner that was managing multiple multiple units much on a much larger scale what would you say would be the biggest thing that you kind of learned from working with someone that is managing a much larger scale operation and how you’ve been able to apply that to your new management company.

Jeremy Schmitt:                16:15                     It’s all about systems you know it’s everything is a great platform and it allows you to automate a few things but you know on the backend having a channel manager and then having a back and internal company system that allows you to automate you know House manual check and docks you know guest communications those are so invaluable because they allow you to focus on you know the 80 percent that really matters which is the guest experience. You know it’s those are the things that matters because no one you want to give guests an amazing experience in your hometown or your city or for doing it remotely wherever you choose to make your second home. But to you know you want to make it as great as possible because you want to build up those for abuse. So you have a long term moat within your property continues especially in Chicago is getting much more competitive. So you’re not getting consistent five star reviews you’re going to get lost in the chase and you know you’re probably better off doing something else because these professional guys are coming in and you know they’re no joke you’re not going to be able to if you don’t have a full package you’re not going to be able to compete especially you know right now you might be OK but you years in way.

Julian Sage:                         17:31                     No. Could you kind of walk through the makeup of your your current property management team like what does that consist of now.

Speaker 8:                           17:39                     It’s why about a city manager here in Chicago we like to think of it you know based on my past experience you know a city manager can take on you know up to twenty five units and be very intimately in touch with those units and we kind of change our strategy.

Jeremy Schmitt:                17:55                     You know my former company we kind of took on one off clients. Now we only take on limited partners. By that I mean you know we only take on buildings that you know or owners who have you know millions of dollars worth of assets so that they have multi-family properties that are 50 to 200 units large sort of consolidate and really focus on you know having our our little chunk space within those buildings it’s easier for our team easier for our cleaners. So city manager and then I have a cleaning team who even rock and they’re the most important are you know having them on board being able to not only clean but also to help you track inventory and stock the units. So they’re a team of five and they’re just a rock and roll. And then you know I have a secret police just to give our clients peace of mind.

Jeremy Schmitt:                18:50                     I don’t take on any clients at all. Furthermore more clients than I actually accept but taking on two clients just because they’re landlords who own a lot of real estate in Chicago. So it’s like we want to partner with them for the long term and then you know we have our contractor so I have a really great designer here who works for the team and then I have a photographer who’s world class he’s one of their biggest go to photographers but he’s a friend of mine and that’s our team. You know I have a few partners on the side too who we’ve invested capital alongside with each other. And I do that strategically to say hey you know if no I don’t really want to go about you know 30 35 units here in Chicago but if they do and I know I have you know people coming to me offering the units I know my partners are competent they know the system.

Jeremy Schmitt:                19:44                     And you know I can hand this off to them and they can take it and run with it and then we can both benefit together side. Just a couple partners on the side who are either capital or operating partners and they’re they’re fantastic. They kind of they have their own LLC so it’s kind of like a joint venture they do their own thing but they’re good friends of mine and they record what they do. So I like just having those Intel just in case hey what if somebody is out of town we can watch each other’s backs you know and for the long term you know depending on how big they want to go we can help each other.

Julian Sage:                         20:20                     Now you said that you have a city city manager and a rock star cleaning team but you also have properties in more out of reach areas like you said Mexico City West Palm Beach. How do you apply your systems towards those more isolated units.

Jeremy Schmitt:                20:37                     Yeah. So anytime we think about entering into a new market we think about one regulation which is most important which are kind of transient so that’s kind of hard to gauge. But we think we do a pretty good job. And then two is just the boots on the ground. You know I’ve said it three times already but you know who you have your clinic in your maintenance team people who are boots on the ground at the most. And so for Mexico City I’ve been there for about six months. I’ve a partner whose family is various we need this and Mexico City is very deep into real estate. So they owned a bunch of stuff of American Mexico and he’s got that real estate background. We said hey you know let’s partner up. So you know he’s lead my partners leading the charge there. He as a cleaning team relationship with the laundromat owner and then a maintenance team.

Jeremy Schmitt:                21:30                     So it’s like really key you know that they kind of they kind of already had those kind of relationships reset. And then in West Palm Beach it’s an investor state actually based out of here in Chicago but they own stock across the country as well. And they’ve already owned the building. They’ve just seen like you know we want to maximize cash flow so they reached out to me. And then we had a conversation. So they already had a maintenance team in it and we meeting down there. So it’s like I went down there visited them to come through the steps. Talk to them about what we’d expect. And we’ve built a good rapport together so just having you know going there you know a blind eye is kind of hard. You know it’s I wouldn’t recommend that but you know build relationships you know especially with landlords and owners. That’s that’s how I’d best recommend.

Julian Sage:                         22:24                     Now you’ve brought up partners quite quite a lot. When you said you are going to like Mexico City are these more like business partners or these like strategic partnerships like working with landlords that have multiple properties.

Jeremy Schmitt:                22:39                     Just to clarify. Well I don’t. We don’t need to take them partners. We have enough. Sorry. There’s a line in the background.

Jeremy Schmitt:                22:49                     Aaron Warner is from Chicago. We don’t really need to take on capital partners. So for us any partner we take on is either one family and friends people that I love and I trust or two strategic partners who own the land and or buildings and we know we can grow with them in the long term. So you know we don’t really need capital. You know even though it’s always nice we like to go into a new market grow grow low and slow. And once we grab our foothold in there we know we have the boots on the ground to take care of our scaled units then we really you know press the green button.

Julian Sage:                         23:32                     So now let’s say you’re going into a market that you don’t have any friends or family that you know of but you are trying to reach out. How do you go about creating those those good partnerships with those landlords or those complexes when you don’t know the area.

Jeremy Schmitt:                23:50                     So that’s actually what we’re doing in Tennessee with our short term rental development. So we’re purchasing the land going to be developing about 25 modular homes with one of our construction partners and then we’re going to be operating with that goal of it being franchise model kind of the McDonald’s of short term rental so no more operating partners maybe some people who are listening to this will want to do it in their local community say hey we want to do that. Can you help us develop this land and then they can complain to the community so for that you know it’s just being there. You know we’re going into we’re going to Tennessee it’s like one we’re going to meet and talk to the local cabin owners we’re doing this already and say hey what’s the landscape. What does it look like. How does it work.

Jeremy Schmitt:                24:42                     And then to know we’re just going to reach out to a number of cleaning cleaning people maintenance people and we’re just gonna take him through the ringer. You know a lot of the people you don’t really know until you actually see their work. So you got to ask them for references. It’s really important. But you know initially I’d say you know working with the cleaning company to start is a little safer but it’s going to be a little bit more expensive but it’s worth it. So you know work with a cleaning company in those new markets and then you know as you spend time down there and develop relationships with other owners or just cleaning companies you know you’ll bump into people because you know doing this I love it because we’re able to pay our cleaners fairly good wage like a lot more like double the minimum wage you know and we tell them then especially if they do a good job.

Jeremy Schmitt:                25:31                     We reward them for that. You know above and beyond the bonuses. So you just gotta be there you know and be you know start making the calls get on forums go through a Google search through the top people are you know and have conversations but have conversations with people face to face because you really don’t know. That’s what I learned from my old life when I worked in real estate before this. You know you have to be face to face and always have backups to those you never know. You know someone can outwork out someone can maybe have a baby they can maybe have to move somewhere else. So having backups you know it’s the engineering principle of redundancy always helps too.

Julian Sage:                         26:14                     So with those locations like let’s say Mexico City West Palm Beach where you’re not present but you have you know these business partnerships that you do have these landlords. But do you when let’s say something doesn’t work out and you need to find another cleaner you need to find someone that can be dependable. Are you personally going down there or do you have your business partner kind of be the media mediator.

Jeremy Schmitt:                26:37                     Both so you know if my partner is already down there you know he he actually knows the local landscape more which is the most important part of the hospitality business. And I let him run with it. The same thing in Palm Beach. You know we have a really good team and it’s maintenance and they rock and trustworthy and they have a vested interest in the property and properties that they own. But if it comes down to Yeah you got to go down there you know honor less than a week’s notice and just fly down there and see you know fix the problem even you know clean the toilets if you need to know if they’re not going to be there. And that’s just you know that’s the easy part of our business. It’s simple easy now.

Julian Sage:                         27:23                     Now what would you say is the difference because when when when you say partner usually I think that there’s some you know there’s there’s I usually think of like a financial vested interests are. And are you just like renting out their units and they just are partners with you because you’re able to fill their occupancy or is there some type of financial partnership that you do enter into to maybe sweeten the deal so that if in case something does happen and they need to kind of mediate that they do kind of have more vested interest and don’t just like say oh well you know it’s this is your this is your job you know I’m just providing the housing.

Jeremy Schmitt:                28:00                     Yeah. I made that clear to them like in the beginning before. You know I don’t I don’t need to take on it. We our stance is you know we don’t want to be in bed with you know Sara my French assholes you know so we make that clear in the beginning.

Jeremy Schmitt:                28:16                     Like I don’t need your business. I don’t care. We have a fine business like like but if we’re gonna do this you know we’re gonna be partners together.

Speaker 9:                           28:25                     So to answer your question you know we only want to partner with people who you know have that vested interest. So

Jeremy Schmitt:                28:37                     sometimes we prop the chair or you know sometimes we take out a lease you know and just collect on the upside and sometimes we do management contracts so we can have those three options and based on my conversations with the owners betting on how best that they want to be in the project whether they just want to collect the check at the end of the month be happy and fat or whether they want to be kind of be more hands on and learn the business. I kind of you know that’s my role in being a relationship mediator in between this is saying hey you know what makes the most sense. You know what’s gonna make us you know the most money you know. And then what’s going to make us the most important question is like what’s going to make this work most for both of us in the long term. So we just had that conversation figure it out.

Julian Sage:                         29:25                     But yeah we kind of do a mix of all three remodels now with the other with the first company that you guys started with you with your other business partner. You said that you were taking up more individual units but now you’ve kind of you have more of like a you take on multiple units within a specific area.

Speaker 10:                         29:43                     Is there like a minimum that you have with those types of units minimum by no means right. So in Chicago they’re very tight compliance.

Jeremy Schmitt:                29:57                     Think a lot of large metropolitan city so they allow a maximum of six units per building per address. So usually it’s we take on you know just a chunk of sex within the building. Usually they’re on the same floor or you know similar on floor plates on a floor above or below. You know some one of our new owners you know they own a whole complex near Wrigley built so they own kind of a block. So they have multiple addresses so you know we can do up to 12 or 14 there but typically just because regulations allow It’s 6:00 here in Chicago it was up to me we’d be somewhere you know depending on the profit margin would be somewhere in the 15 to 20 unit range for Bill and that’s what a lot of people here are doing and I was actually looking at a boutique here Hotel here in Chicago and the Gold Coast for a little bit.

Jeremy Schmitt:                30:54                     But then I thought that was about a year ago when I was with my former company and then I left. But I think that’s about the ideal number because then you can be Tiki which is what you’re being these looking for you can be high touch but everything in terms of operations on the back end can be consolidated and all your supply can be in one place. It just makes it a lot easier for my team with just really my goal is you know think about hey how can I make this as simple and easy for them because it’s that easy.

Julian Sage:                         31:21                     And if you are getting multiple units within a one building how are you kind of keeping the. How are you not competing against yourself like what are you doing to attract different types of customers for your unit.

Jeremy Schmitt:                31:35                     You know we want to compete against ourselves because competition breeds reads better units you know so we see you know we’re lucky to have that data on the back end of their being B so when we have units facing you know within each other which are basically identical we can say hey this unit is eighty five percent leased. This is 70 percent leased and we have this title that’s different. Maybe we can switch up the title maybe we can switch up the cover photo we always want to split test. So we want we actually want the competition and we thrive on competition because it allows us to learn and then grow them together. And when they’re in the same building typically attract larger groups. So we have people attract us online on the platform and off the platform saying hey we need all replaced so we need all six places. What’s the best deal you can get for us. So we welcome the competition and helps us get better. As connecting our units better making the guest experience better as on an ongoing basis and now we know that we’re losing competition.

Julian Sage:                         32:42                     What would you say would be the number like the best thing from the other partnership that you had the other business that you built up what would you say would be the best thing that you kind of took away from that. And then one of the worst things that maybe they were doing that you’re trying not to apply to your business.

Jeremy Schmitt:                33:03                     Initial inspections before we take out require you do an initial inspection just take on inventory furnishing everything detailing chickens at its garbage parking etc..

Jeremy Schmitt:                33:19                     Doing that to a full basis even though it’s mundane and takes a lot of time initially that upfront work up system rising every step of the process before a guest even arrives with a check in Dad’s house manuals. Everything is the most important part because then it allows you to potentially delegated in the future because everything is taken into account and allows you to be accountable if something happens within No. Glass breaks or you know there is damage to furnishing item it allows you those to be documented front the documentation and then inventory tracking and then being able to plug that into the system is invaluable and I think that’s what a lot of initial hopes miss out on because they’re like hey let’s wing it know let’s take photos and let’s go do it in the name. Whatever happens happens. Which is cool you know you can do it for one or two units but you want to do this for real you can’t.

Jeremy Schmitt:                34:18                     The toughest thing I learned was not having a quality players on my side you know in order to do that you need to give them some sort of ownership stake you know. So whether that’s you know in the unit in the company or bonuses through whatever way you need to do it all all of our partners own or have a vested interest in the property and they’re a players you know this business just doesn’t work in the long term like you can’t keep super health status. You know we still have low status after two years like it’s we’re very proud of that you know and who knows it can go away you know you get a number of units in there being these kind of tough on that but not on one but not having a partners which I have now and I’m very thankful for is your law.

Jeremy Schmitt:                35:06                     You know it’s simply it’s a people business you know and it’s all about the people so taking the time to find the right people and making it clear you know hey these are our expectations it’s five star hospitality or it’s just you know you can we you know we don’t we don’t accept anything less. That was really the difficult part and why you know I left you know because you know you’ve got to have a players on your team and now that we do. I’m so grateful when I am super excited to grow and you know continue to create invent and create our brand and help other people you know big financial freedom for themselves.

Julian Sage:                         35:45                     What has been the most challenging part of scaling your short term rental business.

Jeremy Schmitt:                35:54                     It’s for everybody. Finding deals.

Jeremy Schmitt:                35:57                     Lucky for me like a lot of relationships and I actually tell people no more than yes just because you’re very very selective about the Our goal is to be the most profitable ever being the company in Chicago. So we’re super super super selective just because supply continues to increase which means my profits are going to continue to shrink. But now we want to focus on that profit margin it’s it’s really just being patient to be able to find the deals and having the boots on the ground aligned with you. So you know you’re giving a consistent five star experience. It’s it’s it’s simple but it’s not easy. You know and especially on a consistent basis where you know you want to go out on a Friday night. I had this happen two months ago. I was out with my friends and I really really good friends and we’re going to a concert in Chicago and then I get a call at 30 saying Hey we’re locked out of the apartment building system just stopped and luckily we had you know an emergency lock box FOB so they can be taken care of but you know I just step outside for 30 minutes you know to just walk them through and make sure they are OK and you know it’s just like being able to do that on a consistent basis.

Jeremy Schmitt:                37:12                     You know a lot of people who have ever been allowed to travel to see you know a lot of the times you’re not even onsite. Oh no. And luckily we have a city manager so we kind of bounce back and forth so we always have somebody here. But you have the relationships and then being consistent is always a challenge.

Julian Sage:                         37:31                     Now you’ve mentioned also because like you’re very strategic with who you take on as being a client and business partner. What. Like for the people that are maybe just starting and they’re just trying to get like any deal that they can have any type of relationship that they can have. Do you do you maybe not recommend people just kind of taking whatever it is and what’s your criteria for like a really good partnership.

Speaker 11:                         37:57                     How how what is your selection process I mean going back to your question about people starting acting for the first one to get in the door do whatever you can.

Jeremy Schmitt:                38:10                     That’s what I did two years ago.

Jeremy Schmitt:                38:12                     I don’t even know how it happened but you know I was cleaning the toilets getting it just getting to know the business on a very intimate basis is key. And after you know that business you know then you can go to the owners who have multiple properties or management companies who just do long term rents maybe you can add value by providing this air being deeply as it has a different value. Once you have that language and the knowhow down and people know that you’re actually doing it know it’s one thing. Oh I read all these articles and it’s nice but you have to actually be in the trenches you know after you have that then you can be more selective. So I’d say at the beginning no get what you can maybe start your own to a shared room do whatever you can just to kind of get a feel for the platform understand it you know touch base with people like you or other experts.

Jeremy Schmitt:                39:07                     Hey what are what are you doing the back end systems like how do you how do you fine tune them to really get them so they’re automated and the rest are as maximized but then after that it’s like you know for us you know we look for owners and own a minimum of 50 million dollars in assets and you know have larger buildings across the city or cities across the country because we’re not looking to go small anymore. You know we know our system you can plug and play we can do 100 units. We know the system’s great. Yeah. But for us you know it’s that and then like I said I don’t I don’t want to work with assholes. So I look for good people you know and people who care and sometimes you know older guys who want to help the younger generation these old white guys or women whoever sorry whoever you know they have no idea what they’re being bigots but they love mentoring people you know.

Jeremy Schmitt:                40:07                     So it’s like they love hearing about it. And when somebody has their stuff together and they’re young and you know they’re willing to learn and listen to the owner you know and then give their value through their knowledge of everything. Like most people love that you know so you can approach owners you know and move forward that way. So yeah that’s that’s what I would say you know start with whatever you can get but then as you build knowledge and knowhow you know start to get picky. Be selective. You know that’s what the rich do. They say no more things and they say yes and seems to work pretty well for them now with managing this many guests.

Julian Sage:                         40:44                     Is there anything that you do that helps your guests leave positive reviews we only ask for one.

Jeremy Schmitt:                40:50                     That’s a good start. You know we. We make sure everything’s as simple as possible you you know you want to go down the aisle.

Jeremy Schmitt:                41:00                     If you’ve never traveled with there being you act to because then you can see it from the guest perspective. What five star ratings are now there’s a check in rating is key. You want to make your check in as simple as possible. You know there’s a cleanliness there’s a value. The value one’s kind of tough you know because I want to maximize revenue. You know when people have their own idea it’s not a lot. You know that one’s tough you know but all these amenities you know the whole experience. Now you want to think about those from the guests perspective from an empathetic space you know and then provide on those you know and hit upon those in your house manual or your description you know and everything within your listing is say hey we’re here to give you a five star experience. It’s not let us know because we want to improve it with your help. You know and next time you come back you know have a 10 percent discount just because you’re a returning customer and you’re helping us out. I mean just thinking about it from the guest perspective rather than your own you know rather than thinking Hey how how can I make this as easy as possible which is an important question but it’s not the first question.

Julian Sage:                         42:08                     You know the first question is just like how can I make this a five star experience for the guests and from the guests perspective and is there anything that you do that you would maybe say that is kind of like your unique selling proposition with your units is like something special that you do for your guests or for the people that you manage. What what does that that’s our brain.

Jeremy Schmitt:                42:30                     So if you see our listings in Chicago and see it’s all of them end with width and then a red heart emoji with love because that’s what we do. You know it’s passion group it’s what we do everything is with love it’s heartfelt it’s authentic you know and we really live to you know our brand is our baby you know and as we build it and continue to build it you know we want to give guests that full local authentic experience. You know I’m from Chicago I love this city. I’m so grateful to be able to share it with so many people you know but also give them that professional hospitality. It’s like hey here are the managers Here’s your coffee here’s your tea. You know Denise cleanings in between you need not anything else like we’re here to take care of you if you need a private chef.

Jeremy Schmitt:                43:18                     Look we can help you connect you with our private chef like whatever the amenities are. You know for us we don’t try to get too fancy and say hey this is our thing. This is our thing. You know for us this is always providing. Guess what. We don’t do that because every guest’s experience is different and everybody has different expectations whether they’re coming from France or China or somewhere in America we want to make it especially special for them. So we asked them initially you know what that might be and then you know to the experience according to what they want.

Julian Sage:                         43:53                     Now is there anything that you do for like marketing. This is a new question that I’m going to start asking hosts on the show but are you trying to get off of the platforms are you trying to do more direct bookings. What is your guys is brand marketing strategy.

Jeremy Schmitt:                44:11                     We originally created like an on off platform off air being the site where we can accept bookings and it was fine for us it’s like everybody has more hotel rooms than anybody in the Marriott more than Delta more than Hyatt so people called you and you want to respect their trust and security system because it helps a lot. You know in terms of having high quality guests you know that’s what we pride when we talk to landlords known for your guests. Now you want to pride yourself on having very high. All of us. So it’s like they’re not. This isn’t a hotel and they know that it’s clear through your house rules and through you know just the lines that you set. We do have our properties on Airbnb be on our Web site. We’ve experimented with everything. You know we have a Yelp page of a Google page on Facebook done the ads you know experimental with Google ads for us.

Jeremy Schmitt:                45:12                     It’s those are great. But given that you know we’re not at a Tunney you know we’re only at twenty five when we’re at 50 that wasn’t even that many either. You know you can start but that’s why we’re creating a brand with a passion group you know really attract one operators and partners high quality across the country and world but then to the guests so they can contact directly and then we give guests who stay with us you know little messages that Hey next time I want to reach out directly give you a 10 percent discount. But yeah that’s kind of the extent of how we do our marketing. This is marketing for us. We also have a youtube channel and Instagram page that you know my city manager and Brother is watching right now and is you know doing really well. So you know we’re getting our brand out there you know sharing what we care about you know and how we can best provide for the guests but then mostly keeping it consolidated through their platform right now.

Julian Sage:                         46:17                     And what would you do differently if you had to start from scratch well.

Jeremy Schmitt:                46:27                     I don’t think anything I would continue just to build relationships. I am very lucky. Was kind of a smooth transition from former company with this company.

Jeremy Schmitt:                46:38                     I didn’t have a name. I didn’t have an answer list so that made it a little tough because I built all the relationships in that company like I couldn’t even talk to my friends like I little ones. It was so sad. But you know they can happen. I don’t care but I’m just continuing to build those relationships. Be attentive to you know the true value that you’re adding. You know maybe I wouldn’t have started my own firm in the wintertime because that’s kind of Chicago has the highest range of hotel prices contact. But from winter to summer nobody comes here in wintertime but everybody comes here during summertime. So I mean I almost went bankrupt in February. You know we’re bringing on new units furnishing them and investing in them. But you know we are only making back either our rent or we are a little under it just because we didn’t build up that new momentum in our locations will be good now for wintertime just because of the people that we focus on and where they are.

Julian Sage:                         47:40                     But yeah that’s probably maybe the one thing I would change is that that’s a really good question because that’s maybe that’s something that so many people think about. Are you doing anything to be able to offset that low season.

Jeremy Schmitt:                47:54                     Yeah. So our business is traveling the majority of our units are in Europe Convention Center huge power McCormick Place. So we focus strictly on there because come wintertime there’s still conventions there’s always conventions and then the auto show in February.

Jeremy Schmitt:                48:13                     There’s a couple other shows in that time. So of course we’re going at the lower prices because that’s what the hotels do. But we’re still gonna be able to keep occupancy high anywhere from 60 to 90 percent. When we focus on that and then we’re exploring just because there’s there’s a big nurse community here in Chicago doing to travel and they’re staying. So it might open that up our properties aren’t exactly close to Northwestern but added close to Rush Hospital. So we’re exploring those a little bit and you know it’s fine. Ninety nine bucks you can put your stuff on traveling nurses that kind of market crap but it’s OK. But yeah those are kind of the things that we focus on in the low season to combat seasonality.

Julian Sage:                         49:00                     And where do you see short term rentals going in the future.

Speaker 12:                         49:08                     I see to kind of lady you know you see all the venture capital being raised by the Sanders by the lyrics.

Jeremy Schmitt:                49:16                     They’re basically going to be taking on boutique hotels and that’s releasing large buildings giving people kind of more of that professional hospitality hotel but not hotel hotel. Ah tell whatever our experience that’s gonna be a big chunk of the market because they are being bees invested in lyric if they’re invested in it you know they’re their best interest to see this grow. And you know it’s Tishman spire and all these huge landlords are invested in the Sonders That those are the guys who want all the rules. The big big stage. But another side in this is where we where we focus is know those mom and pop and most people who really care want to give that charming authentic experience you know. And that’s where I think there will always be a business here giving a five star high quality hospitality experience kind of like those guys are doing but making it more authentic you know making the homes really feel like home and creating your own kind of little boutique hotel community.

Jeremy Schmitt:                50:22                     That’s where people I think are really going to thrive. You know the people who have you know thing is an outtake. You don’t have professional photos. Good luck to you. No way. Say now we have to. You have to have dynamic pricing. You have to have all of those are those are just you know typical now those are default. You don’t have those reviews but you can use those to really amplify your local trauma experience. And I see actually the professional guys are kind of going to grow in these large cities. The New York Chicago’s the Dallas says Miami wherever regulations kind of allow these mom and pops you know they’ll be growing and continuing to grow in these. You know just even random town doesn’t even need to be a ski or beach towns. It’s it’s everywhere across the world which is really fun and you know I think that people get those cool funky authentic experiences are always going to win. You know grateful because of some of them my friends and I learn from them continually still.

Julian Sage:                         51:27                     And what for. Do you have any questions that maybe you have for another host that is maybe scaling or doing something different from you or maybe in a larger operation or if you had any type of question what would that be for the next toast.

Jeremy Schmitt:                51:41                     Yeah I mean my question right now is you know at what point are you bringing in-house software development and tools versus you know that stuff in the market for us. We think we ever wanted to sell having kind of an in-house tool would it be a value add for potential choir. So it’s like how are they thinking about their development piece. In that case this is the stage that we’re at right now. And what we’re thinking about and then you know how they’re how they’re approaching other markets we know we have our how we’re approaching other markets and we’re really excited about our development project in Tennessee. But it’s always just fun to learn. You know it’s a relationship. It simply numbers is it. You know you’ve found a new guy who is going to be a partner there. Those were always fun questions to ask and you know to learn from each other.

Julian Sage:                         52:42                     And lastly if you could give one piece of advice to someone who’s planning on starting a their own maybe property management company what what would that be.

Speaker 8:                           52:54                     It’s simple but not easy. So I would say you know think about systems and I said it earlier but it’s just like everything from tracking inventory to your meaning team to gas experience to the check in to the check out to the during the stay to the review ask and then rinse wash repeat all those things can be 80 percent automated.

Jeremy Schmitt:                53:20                     So that allows you to focus on the 20 percent that really matters which is now your clients and your guests in your homes taking care of the guests could be new five star experience and protecting you maintaining your homes so you have a long term investment is how I would think about it.

Julian Sage:                         53:35                     Great and is there any way that anybody can reach you. Jeremy if they have any other questions or want to work with you or anything.

Jeremy Schmitt:                53:43                     Cummings national group so it’s actually spelled p a s i o n it was originally passed on but I figured that was too fancy for a random Midwest kid in Chicago. So it’s a passionate group. You can find this at the passion group that combats passion group on Instagram also on YouTube. My local font firm here is called How real estate brokerage firm and the management firm here. My email is Jerry at help already if anybody has questions again. J.R. at help. And then real estate spots R E dot com. But yeah happy to help or just have conversations always curious about other markets and to you know share what we’ve learned. Because it’s you know it’s a fun ride that’s still changing and growing so I love this business and plan to be in it in the long term.

Julian Sage:                         54:34                     The passion group but and of course I’ll include everything in the description of the show notes. So but thank you so much Jeremy. It’s been such a pleasure speaking with you. I wish you the best of luck and we will just continue to. To stay communicated in the host nation Facebook group and yeah just really excited to see where you’re going. And until next time host nation keep on hosting hope he hosts benefit from the show.

Julian Sage:                         54:56                     If you found value please. Going over the I Tunes leave us a review and let us know what you enjoy about the show. If you’d like to talk to those that have been featured in these episodes as well as the community going over to our Facebook group the host nation talk to host in the next episode. Keep on hosting.