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[00:00:00] Sarah: Hello, listeners. Welcome back for another great week. My name is Sarah Karakaian.

[00:00:19] Annette: I am Annette Grant. And together we are–

[00:00:21] Both Annette & Sarah: Thanks for Visiting. 

[00:00:21] Sarah: All right, let’s start this episode like we do every week, and that’s sharing one of you, our awesome listeners, who’s using our hashtag on the Instagram, #STRShareSunday, so we can show you here on the pod. Annette, who are we sharing this week?

[00:00:34] Annette: This week, we are sharing @beathaurfarm. And listen, it’s like Gaelic Scottish.

[00:00:41] Sarah: Beathaur.

[00:00:43] Annette: So forgive me if I pronounced it wrong, but I’m going to spell it. @B-E-A-T-H-A-U-Rfarm. B-E-A-T-H-A-U-R Farm. Check the link in the show notes. Holy smokes. This farm is from 1868. I guess the Johnstons were a famous cookie company. This couple has been spending three years– yes, you heard me right– restoring this home. 

[00:01:14] Suzanne and Charlie, the stories, I’m sure you have to share with all of us. But, wow, it is Beautiful. It is so beautiful. I want you to just take a look at it. It is on four and a half acres, so they are making it happen in the design. They really stayed true to the farmhouse feel here, and you’ll see it in their quilts, and the paint colors, and just the charm. I think that’s the word I really want to use here, is it is so charming. Just looking at the photos takes you back, and they are just crushing it here, but three years. 

[00:01:53] Sarah: But they’ve woven it with modern conveniences, like the heated floors.

[00:01:59] Annette: Absolutely.

[00:02:00] Sarah: And I love when people do justice to the charm and the originality of the home while bringing us travelers a taste of luxury.

[00:02:09] Annette: Right. The bedrooms have electric fireplaces now, which are just lovely, but man, it is beautiful. Well done, Suzanne and Charlie. I hope you are enjoying the fruits of your extensive labor here. The ceilings are gorgeous, the doorknobs, everything. They’ve crushed it. It’s beautiful. 

[00:02:31] Sarah: Yes.

[00:02:31] Annette: All right, Sarah, we’re going to go from one couple another couple.

[00:02:36] Sarah: Yes. Today we have Jonathan and Heidi who met at a Halloween party, and that was the start of not only a life partnership, but also a business partnership. And Jonathan had no idea where his life was going to take him after meeting Heidi, who has this entrepreneurial flare to her. Jonathan has this business savvy–

[00:02:58] Annette: He was military thinking he was going to retire into a certain career and been prepping for it, and then the pivot.

[00:03:04] Sarah: And we just thought this episode would be so wonderful for listeners out there. Not only if you’re in some sort of partnership, but just how you just never know where life’s going to take you next.

[00:03:13] All right, Jonathan and Heidi, welcome to the show.

[00:03:17] Jonathan: Thanks for having us.

[00:03:17] Heidi: Thank you for having us, Sarah.

[00:03:19] Annette: For sure. We can tell everyone we were chatting a little bit before the episode got started. We love that you guys were in costume, and at Halloween is when you met, but talk to us about both of your individual stories, and then when you came together, how you’re creating all of the short-term rental real estate empire that you’re building together now.

[00:03:40] Yeah. Thanks so much. Really appreciate the opportunity to come out here and talk to some of your listeners and share a little bit about us because we feel like it’s been a pretty impactful story for us so far. For myself, I’m currently active duty in the Marines. Been deployed to combat about four times and overseas for various other exercises.

[00:03:59] Jonathan: Getting ready to transition out and retire next year is timely for us to hit a really good inflection point with the business. The business actually began with our relationship together. I’ve had houses over the past 10, 15 years that I’ve rented out long term, but going into the short-term space and then the mid-term space, which we’ll talk about later, has been something that we’ve worked on to refine and discover some new spaces together.

[00:04:28] So throughout my time in the Marine Corps, I did get my master’s in business from Purdue, also a master’s in IT, and a project management cert. I had all the resume to transition into something like a C-level type job for a Fortune 500, or become a government contractor, or something like that. But it turns out that working this business is going to be the more likely avenue, more lucrative. It’s a great creative outlet. So I’m looking forward to that. 

[00:04:57] Heidi: Yeah. And for me, I don’t have all that. I was a stay-at-home mom for nine years, 10 years, and then I needed to provide for my kiddos, and I only did one year of college, so I always thought, man, I could be a property manager and live on site, and then I can do this.

[00:05:17] And I didn’t want to live in Fresno anymore. That’s where I was from, Fresno, California, and born in LA, but LA was just too much for me. So I made my way to San Diego, North County, coastal, and I got a job. Someone gave me an opportunity, and I’m still there. That’s still my day job. I did that back in 2016, and my mind was always running, running, running, running, like, okay, this isn’t enough for me.

[00:05:45] I’d love to travel. I want to spend time with my children, and I want my time too. So I spoke to the investor I worked for, and he always just gave me opportunity, opportunity. He’s like, you need to get your real estate license. So I went from managing long term properties, apartments, and homes, then I got my real estate license. 

[00:06:07] And when COVID hit, I was sent to Maui, and actually, I was living there when I met him, and I was transitioning back full-time. So I was still there a little bit, and then here. Did a lot of travel back and forth, bought some homes out there, or sold homes out there– not bought. I didn’t purchase any, but I was already doing a little bit of in-home hosting, so my mind was always running.

[00:06:36] So when I was still living here before heading to Maui, I would rent out a room through Airbnb. And I was like, I have my children half the time, so when they go with their dad, I’ve got two or three bedrooms at a time. So it was all booked. The rooms are all booked. COVID hit, I stopped.

[00:06:56] I went to Maui, come back, and then my wheels start spinning again, and I’m like, I need to get back into this. At this point, I had saved a substantial amount of money where I was like, I need to invest this in something. And so we meet, we start dating, it’s going, and I have a one bedroom here that I was living in.

[00:07:18] And it was all furnished, and I was like, I’m going to try this out. Not live in it. Just actually go full blown. I’m going to just see if I can do this. And it was working out, and I was like, dude, are you down to do this with me? I would talk to him about even renting his place. And he was a little like, this is my home.

[00:07:42] I don’t know. And I was like, it’s okay. We can try it out. I have an opportunity to do an arbitrage. I can rent out a home, we furnish it, and then we can just go from there. I’ve already tried the one bedroom. And so I even had another Zoom meeting with someone to show us so he could see, and that didn’t go so well, and I was like, I need to trust myself.

[00:08:08] I know what I’m doing. I know the market. I’ve done long-term rentals here. I know that there’s a market for midterm, short-term. It’s here. So he’s like, yeah, let’s do this. So we combined. And this was three months into our relationship, and we’re like, all right, let’s do it. So yeah, we started furnishing that first four-bedroom and in Encinitas Leucadia area right by the beach, doing the whole permit thing, everything.

[00:08:36] And while we were waiting on our permit, we had to stop doing it, but we saw the potential there. And then month 2 or 3, July, it just skyrocketed. It completely surpassed our overhead and even our expenses, everything. We made our money back, everything. So he instantly had created a listing for his house, and he was ready.

[00:09:02] Annette: I love it was a short-term relationship that went short-term rentals. You guys just agreed. We’re going all the STR– can we rewind a little bit, Heidi? I don’t know if we’ve ever had anyone on the show that has rented out multiple rooms in their home while they were living in it. Were you renting out those rooms to individual– were they each individual listings?

[00:09:25] Heidi: I was. I had a listing where all the rooms could be taken, or you would just rent them separately. And then, surprisingly, one of them became my roommate. I loved her so much. Her name is Dee, and she was a nurse, a traveling nurse. So she needed some time, and so she actually ended up staying with me until I moved out of that house and everything and went back to, Georgia or something.

[00:09:52] And I rented them individually, and I vetted them. I would vet them before too. It’s like, who’s coming, and whatnot. I’ve only had one bad experience with someone, but they smoked in the house, and I was like, no.

[00:10:08] Annette: Right.

[00:10:08] Heidi: But other than that, I spoke to them, and that was it. And another thing, I was really busy. I would only come home to sleep. So I had this house, and then I also had this other apartment. Anywhere I lived, I would do it. And so I’m the type that you can sacrifice. It’s okay. 

[00:10:28] Jonathan: I do want to share a short, funny story, an observation from my perspective, is we’re just getting into the space, and she’s trying it out with– that’s what someone does, is maybe they’ll do a house hack. A little house hack didn’t hurt anybody. Rent out your space. If you’re living in it, it’s just a little bit of an extra sacrifice. You vacate. Someone comes and does a vacation there or whatever. 

[00:10:50] And I remember February 22, I was on vacation in Rio de Janeiro to see Carnival. And I do a FaceTime with Heidi, and she’s in someone else’s bed. It wasn’t hers. And it’s her friend. I think it was Rochelle, right? 

[00:11:07] Heidi: Yeah, it was Rochelle.

[00:11:09] Jonathan: She had rented out the space and just decided, I don’t need to leave, but I’m going to take the booking and just went to her friend’s house and slept there. Yeah. And I’m seeing her, a grown woman sleeping in someone else’s bed. I’m like, you could just go over to my house.

[00:11:26] There’s no one there. Literally have a couple of beds to choose from. But that’s where you see someone’s hustle, and you got to respect them doing what they need to do to prove out a concept or to make that extra money. You got to start somewhere. 

[00:11:43] Heidi: Yeah. My mindset was like, if it does well, I’ll go– we weren’t living together, but when he was home, I was there all the time. It was like I was living there, but–

[00:11:53] Jonathan: And her house.

[00:11:54] Heidi: Yeah, he had [Inaudible]. But it was so weird. We were three months in, so yeah. 

[00:12:02] Jonathan: Three months from being official.

[00:12:03] Heidi: From being official. Yeah. So he made a joke. He’s like, my girlfriend is homeless.

[00:12:12] Annette: In a good way. Yeah.

[00:12:14] Heidi: Yeah, I was just trying it out, and I was like, okay, I can go rent something else and then let that work itself. Yeah, but I ended up moving in with him, and it worked out.

[00:12:25] Sarah: First of all, Jonathan, thank you so much for your service, and congratulations on the retirement. Have you retired, or is it still upcoming? 

[00:12:34] Jonathan: It’s still upcoming. August of next year will be the official date I hang it up.

[00:12:40] Sarah: Thank you so much for your sacrifice too, but also, I think there’s so much we can take away from this conversation of, Jonathan, what you learned about Heidi, yes, she could have just stayed in your house, but as she’s trying out this new business venture that she’s seeing if it’s a good fit for her, she’s also respecting a new boundary in your relationship by maybe not assuming X, Y, Z.

[00:12:59] And I just think a lot of listeners out there, you might whether it’s a life partner or a business partner. And I love those little clues that we can pick up on on how you can see how the relationship is going to be moving forward in the future, whether it’s business or personal. And it’s those little clues that can really help us understand that this person’s a good fit as we embark on something that is going to be really hard to untangle.

[00:13:21] So we really need to be sure that we can do this together. So Jonathan, from your point of view, when July surpassed your highest hopes, was it that that got you hooked? Was it her passion for it and her unwavering spirit to try this out? What helped you, as the partner that maybe didn’t have the initial idea for short-term rentals, get on board?

[00:13:45] Jonathan: Yeah, thanks for asking. I never really had the vision of me being in hospitality because customer service is something that you have to really evaluate whether you’re going to want to do it personally. So much goes into it, from communications to the experience, etc. So I didn’t envision that being really part of my end game or my now game either.

[00:14:10] But that said, timing for getting into the first place, March-April timeframe, getting into an arbitrage is significant. You’re paying your first month’s rent. In this case, it was 7,000. It’s a coastal place. Double that because you got to pay security deposit, and then furnishing a house. Doesn’t matter if it’s inland or coastal. At a three-or four-bedroom house, we find that we spend about 20 to 22k when you go all in, furnishings, and then down to the linens, and soaps, and essentials, so somewhere in that ballpark. They vary, of course.

[00:14:44] Heidi: Plus the first month’s rent and the deposit. 

[00:14:46] Jonathan: Yeah, yeah. So you’re substantially in at that point, and you’re hoping it works based off of other data that’s not exactly that house in that neighborhood, which I know we’re preaching in the choir. You just want it to work. And then it did. We go right into the summer time frame, and then boom, July gets solidly booked at rates that we were able to set out on our own terms. 

[00:15:08] And that was a 27,000-dollar month, top line. I’m like, okay, maybe I do like hospitality. Because by that point, I had done a lot of not just the hospitality, but the operations. Running a business is an outlet for me to be creative, and execute, and plan things that are completely my language. 

[00:15:32] Heidi: It’s all him. I tell him all the time. I would not have been able to do this without him. He is the engine behind all of that. I get to be creative, and decorating, and I tell him, that’s the one thing I feel I’m good at. 

[00:15:50] Annette: No, I’m going to stop this right here because, Heidi, you are not giving yourself enough credit. You are the whole reason that he got started in this. So John, love you, mean it, but Heidi, girl, you have got it going on, and I want you to puff your chest a little bit more because that’s what we do as women, downplay it. And I just–

[00:16:08] Sarah: You’re the visionary, and you’ll–

[00:16:10] Annette: You’re the vision, for sure. 

[00:16:13] Heidi: Yeah. 

[00:16:13] Jonathan: She’s the dealmaker. She’ll talk insurance companies. And we’ll get into this later on, but she’ll talk with someone that’s got a family, a client family that needs to relocate in our Zillow posting. We use all platforms. Our Zillow posting for a two-bedroom. This is silly. It was about $7,000 for a month, just to some people in there. And we’re not exactly going for people that are looking for a house for themselves. We’re going to talk with insurance companies. She comes back with an 11,500-dollar deal for one month in a two-bedroom. 

[00:16:48] Heidi: And extended–

[00:16:50] Jonathan: Okay, you’re doing that Heidi thing where you ask for more money. 

[00:16:53] Heidi: He says it. You’re doing the Heidi thing. Oh, you did your Heidi thing. I’m like, what do you mean? 

[00:17:00] Jonathan: She has a way of getting what she wants. 

[00:17:01] Heidi: The investor I work for, I think that’s why he’s kept me on too. I know why, but negotiating, and ideas, and just trying to find different venues to make things work, I guess I’m pretty good at it. But we work as a team, and he’s amazing at the whole business, the model, and keeping it running and growing. 

[00:17:26] So we both have our good qualities, what we’re good at, and we do our best to combine it and support each other. It’s not always perfect, but we also have to remind ourselves it’s only been a year and a couple of months, and it’s growing so fast that it’s like, we weren’t prepared for this. It’s a wild ride, for sure.

[00:17:51] Annette: After the first arbitrage, though, what was next after that? You’re like, okay, we have this first arbitrage. We see what the revenue is. Where is the moment where you’re like, okay, this is something that we’re going to expand on? Take us through those conversations that you had in starting to develop where you are now.

[00:18:07] Jonathan: Yeah. It was my house next.

[00:18:09] Heidi: His house. He had that listing done. I didn’t even do it. He had it, and I looked in the Airbnb app, and I was like, did you make a listing? He made the listing. 

[00:18:20] Jonathan: Yeah, it was already furnished, ready to go. At that point, we were looking at options anyway to get into a little bit of a bigger house. Mine was a three-bedroom, which we converted into a four. It was at a den space, but still with my two girls, and then her kids, we just needed a little bit of a bigger space anyway. So we began to look at a rental, if we could use for that purpose, to enjoy and has a few more amenities that we wanted to have for a long-term play.

[00:18:51] And so it became a clear runway for that place, where I was living, to just go right onto the market. It’s mine, and there’s no barriers to us doing other than an HOA that they sometimes are very, very assertive, but that’s where we began to discover a new interesting space for us that began to be a lot more important for what we are now. And that was our experimentation in the midterm space.

[00:19:20] Heidi: Where the HOA came in and stops you, and you’re like, so much potential here. Your coastal newer development, the amenities, and we just couldn’t, but we were like, all right, let’s just do midterm. And when we listed it live to actively start finding someone and we were actively looking for a home, we’re like, we should just do a furnished home ourselves or something.

[00:19:45] Let’s try. But if we don’t, we were like, okay, we could just furnish it. We find a house, so, all right, we want to see it. And then all of a sudden, we get a ping. Someone’s interested. Yeah, someone was interested for a month for his place, and we’re like, what? And then we negotiated that, and it wasn’t even an insurance case. It was a sports team of professional skaters from China that wanted his home.

[00:20:15] Jonathan: And they wanted a lot of beds in there. 

[00:20:18] Heidi: And they wanted a lot of beds in there. We were willing to give them the beds. We’re like, oh. So it happened in a matter of days, two or three days turn over, paint the house, rearrange some stuff, remove our belongings, and then move into our house now, where it was fully– it just all worked out for us.

[00:20:39] Annette: Where was that listing, though? Was it on Airbnb? 

[00:20:42] Jonathan: It was. We had to sell as well, but the booking came from just being on Airbnb. No reviews. 

[00:20:49] Annette: What did the HOA do? I want to talk about the misstep because I’m sure there’s a lot of listeners here that want to put their primary residence on Airbnb, or a short-term rental. Did you know you weren’t supposed to be doing it and you just did it anyways, or did you not read your bylaws, and you’re like, I’m going to try this until they like it? Talk us through that too. 

[00:21:10] Jonathan: To be clear, we use Airbnb simply as a platform of getting the property out there because we know that some of the bookings come from there, just like people will have the money and they’ll just shell it out from person to person, or a sports team to person. It’s always been on Airbnb for 31 days or more.

[00:21:29] Now, the city sometimes has– twice, Oceanside, California City has found it on Vrbo and Airbnb, and they’ve said, hey, we noticed your properties on there. Please register your home accordingly so you can start paying taxes to us. If you don’t, here’s the consequences.

[00:21:46] And I had to call them up and clarify with them and with a few other cities that the booking or the property is a long or midterm rental, and there is no basis for us registering in any way with the city for short-term. And we’ve had to have that conversation with HOA and with neighbors.

[00:22:06] The safest thing at this point with being on those platforms and avoiding misperceptions is, of course, making sure your calendars, and if you’re using an integrated booking engine, make sure that this thing reflects it too, that you’re 31 days or more. And you state that much in relatively a conspicuous place in your description of the property.

[00:22:27] You do those two things, you’re going to avoid all the pitfalls, and you’re not going to have to get mired down and people putting themselves out there, which sometimes can be in somewhat public places, like a neighborhood Facebook group, which has happened.

[00:22:43] Heidi: Back to the CCNRs, yeah, you do have to regap. We read them. Some places have six months. That’s not something I would want to touch, but if it’s 30 or 31 days, great. We can work with that. Because they will hound you. Out here, they will. I don’t know if other counties or states will, but here, they’re just on it. And so they will catch something or someone will say something, and they’re there.

[00:23:14] Yeah. And he’s really good at reading everything and understanding it. He will read an entire contract, and they try telling him something. He’s like, no, I’m going to show you right now where this is okay. And so yeah, you do have to do your due diligence. At least for myself, have I done that before?

[00:23:33] Maybe. Yeah, I did at the beginning. I was like, you’re not supposed to ping it there. You got to ping it over here. But I only did it to try it out. But yeah, if you’re living in it, it’s a little different. But now when you’re not, they will– 

[00:23:48] Jonathan: Yeah. Especially when you’re dealing with clients’ properties.

[00:23:51] Heidi: Oh yeah. 

[00:23:52] Jonathan: We’re managing properties for others. Everything’s got to be above board. 

[00:23:56] Heidi: Above board. 

[00:23:58] Sarah: It’s like you took your own homes through the test, the pressure test, and once you bring in someone else’s property and someone else’s asset, I know that you guys are now operating above board, and you’ve got a niche in place. So it sounds like with that first listing, the arbitrage listing that July, you were short-term renting your stays. But as you grew to understand what most buildings were allowing, that 31 plus days is maybe more feasible. So are you guys solely now focused on midterm stays across all your properties, or do you do both? 

[00:24:29] Jonathan: We do both. I’ll just say a quick thing. Right after my property, we went into Carlsbad, the next city south, and we intended to do a short-term arbitrage there. We believe that there was no HOA, which is the case, but the next-door neighbor, he had some real heartache and actually involved a lawyer letter saying that we cannot do any short-term operations, and his basis was from the 1990s CCNR– this is or community covenants and rules– basically stating that no activities such as ours. 

[00:25:03] Heidi: No hotel or transients be coming into– the thing is this home is a twin home. Eye size, it looks like it’s just one home, but it is a twin home. It is allowed in Carlsbad, but he had an issue because they are attached. There were those CCNRs in place. Not even the new owner knew that that verbiage was there, and so her property manager had no idea, and this came up.

[00:25:30] So we were crushed. We were like, if Leucadia, Encinitas home could produce that, this one would surpass it. You’re right on the ocean. You see the ocean. You’ve got a rooftop. This was a beautiful home, and we’re like, what? So instantly, we had to pivot into a 30-day in that same day that we changed our calendar.

[00:25:58] I did it there. I changed it to 30 days. We laid down. We were just talking for an hour or two, and then we get up, probably to go eat, and I looked at my phone, and he looks at his, and we have someone ready to book at the price that–

[00:26:12] Jonathan: It was at the Airbnb rate.

[00:26:13] Heidi: Yeah, it was at the Airbnb rate, and negotiated that. We still had to negotiate with the insurance, but that one, I pushed for 17,500. Mind you, this house should have produced 30 to 35 on a nice summer month, and we couldn’t get that. And we had one booking for two weeks.

[00:26:39] We had just launched this house. So we did our short-term booking. We fulfilled that responsibility we had to do, but then we moved her in a day or two later when they left. And then that turned into a six-month deal. Yeah, so then.

[00:27:00] Jonathan: That was one of our first actual insurance cases. So you asked about our strategy. It’s a mix of midterm and short-term. We do short-term. We’re able, and we want to be prepared to pivot those homes to midterm for the off-season months, winter. So there’s a couple of things that play.

[00:27:20] Saturation in markets. They just make it so it’s hard for people to reasonably say they can compete without resistance with a short-term. Like, should I really get into this space? Am I going to be able to execute? Will the market support it? Because you look at some, as a traveler on Airbnb, there’s a shotgun blast of so many listings, and they’re great-looking listings.

[00:27:44] Heidi: Oh, yeah.

[00:27:45] Jonathan: You got to really evaluate whether you want to get into that space. So saturation is one, and it’s just hard to find the right communities that will allow short-term rentals. So if you want to be in this space and you have that type of competition in the short-term market, the midterm market is something to consider, where a nosy HOA that doesn’t allow– I don’t want to be pejorative towards HOAs. 

[00:28:11] They’re great Americans, but there’s sometimes where they overreach a little bit, and it makes it hard to do business. You don’t have to be beholden to the same city or HOA rules if you’re operating in the midterm space, which is great. It’s a lot of weight off your shoulders and administratively easier. 

[00:28:31] So that case, it was just a lady who had a fire in her home in Carlsbad. Could be any rebuild that’s happening due to whatever disaster occurred, unfortunately, for those families. They go to their insurance company. Insurance company says, yes, we have a policy that supports you for this time of need, and the insurance company partners with the relocation firm, and you can become familiar with some of them just by cursory Google search like ALE, CRS, THD, Temporary Housing Director. And they’re–

[00:29:05] Heidi: They’re countless.

[00:29:06] Jonathan: The whole alphabet. 

[00:29:06] Heidi: We still get so many new ones coming in inquiring. And I remember when we had to pivot for that, I was like, you know what? There’s so many properties I have to say no to, so many inquiries with my long-term rentals. That’s how I knew there is a market for that. I would go like this with my boss.

[00:29:29] Jonathan: This is for your day job.

[00:29:30] Heidi: For my day job. Managing these homes in these areas, and I’m constantly getting inquiries like, hey, are they open to a one-or two-month lease? And it’s like, no, this is strictly a long-term. So I also went back to a lot of my inquiries on my Zillow, and I started to look at who had inquired. That’s another way we built a Rolodex, and then new ones that have come in throughout the span of our company being up and running. So that’s how that happened. 

[00:30:03] Jonathan: So if you have listings out there on Zillow or Airbnb, at some point, you will be contacted by one of these types of companies, and it just doesn’t sound like something that someone might be familiar with right away. Like, hey, I’m representing an insurance claim for a family. Can we do this for this limited time? Two months with a possibility of a 3rd. 

[00:30:24] One might not be positioned with their calendar to accommodate that. So many people that are renting on Zillow just don’t have a furnished space, and they’re just not able to meet that really specific market. But if you pay attention with a property that’s posted out there for the world to see, you’ll eventually be encountered by someone that wants to make this type of offer. 

[00:30:46] So we noticed those, and she was already aware of them, and we began to collect those names of the companies and write down their email addresses and their phone numbers. And then every time we have a vacancy coming up on one of our midterm properties, a few weeks ahead of time, we’re calling.

[00:31:00] I’ve been making phone calls today saying, we have two four-bedroom homes and a three-bedroom home in North County, San Diego, pet-friendly. Here’s some basic stats on it. Do you have any client families who are interested in being relocated for a limited period of time? And the answer is going to be yes or no. And they each have a pretty similar process where they’re looking for a little bit more data in email on, okay, what are your expectations for the lease terms and any clauses, utilities, things like that.

[00:31:28] Heidi: Yeah.

[00:31:28] Jonathan: That’s the conversation.

[00:31:30] Sarah: I have so many questions for you. It’s great because of when you started with short-term rentals and then you went into midterms because of the– you pivoted in a brilliant way. And I think because of when you did that, you weren’t so into one way of doing things that for you, it’s been easier to adjust your systems. 

[00:31:51] So I’ve got some questions around that. My first one being– I think that’s a hot tip, and Annette and I like to pick out the hot tips in our interviews– when you register a home with a relocation company, like the ones that you listed, you’re saying that even though you have your information, you fill out the form online, they’ve got your stuff, you don’t wait for them to call you with the next time they’ve gotten available and have someone in need. 

[00:32:14] You’re calling them a few weeks, a month ahead of time and saying, hey, we have this house coming available. We’re already in your system, but we’re wanting to know if you’ve got a good match for us. Is that what you’re saying?

[00:32:24] Jonathan: Absolutely. The folks that I talked with today, I spoke with them, and I understood these are national companies that want– they’re just people with a saturated task load. And sometimes, it’s their MO to look at their database first, but sometimes, they just start pouring through other listings for whatever reason, based on the techniques for that team.

[00:32:46] They happen to be really saturated right now with the Maui fire cases. And my heart goes out to everyone that’s been affected by that. It’s a terrible disaster, and it deserves a lot of attention from the insurance companies right now, but that alone makes it difficult for people to focus on our three houses in San Diego. So we just got to bring it to the forefront of their mind. That’s part of the–

[00:33:11] Heidi: Just remind them. Shoot out an email and attach your listings. Even though they’re already in their system, I ended up doing that right before coming here, just standing, hey, we have this home. They might not have something, but their colleague will. And so they’ll ask, hey, do you have anything in this area? Do you have a family in need? Yeah, that’s pretty much how we do that.

[00:33:35] Annette: Do you keep a listing live on Zillow all the time just to four leads?

[00:33:40] Sarah: Like a lead magnet. 

[00:33:41] Jonathan: That’s such a savvy question. We usually do have something on there. 

[00:33:47] Heidi: Yeah, we always–

[00:33:48] Annette: Yes or no. Wait, you’re saying it’s a savvy– you got something going on here. Give us the goods. Yes or no. What’d you got going on? You got one live. You point them other direction.

[00:33:56] Jonathan: We’ve been increasing houses as we go pretty rapidly with acquisition of clients. So obviously, when one client is getting ready to get their place photo-ready, we don’t want to wait until that if we have another three bedroom that’s a few doors down, and it’s pretty similar. And so, yeah, we’re going to adjust the listing availability date for that one to start a conversation. 

[00:34:18] And then we can talk to the insurance and be like, this exact house, it turns out is not available, but we have one that can really facilitate what you’re looking for, which families that are being relocated, they’re coming from that pocket of the county because people want to be able to go to their same job, get their kids at the same school, and have a similar house to what they just had to vacate from, which we’re still facilitating. So it’s just a big mixing bowl of, we have a lot of two, three, and four bedrooms that check everyone’s blocks.

[00:34:48] Heidi: Like he said, we keep a listing up. Especially in his community where his house is, we have four in that community now. We’ve grown in that community. So I was just on the phone with an insurance agent, and it was like, if this was on their budget, this was coming up. So they inquired about the one we had up, but their need is more in the one that’s about to become vacant. 

[00:35:15] Jonathan: Yeah, they might not know exactly what they need. 

[00:35:19] Heidi: We have another house in Vista that’s becoming available, and it’s still fairly close, so you can jump it over to that one. So yeah, you can maneuver and massage it a little bit.

[00:35:30] Jonathan: Yeah. 

[00:35:31] Sarah: This isn’t the same bait and switch that people do on platforms like Airbnb, where they show one picture and then you arrive and it’s something different. We understand that. This is where you’re getting a lead. It’s a product that you have similar products in terms of your systems, and your customer service, and your level of safety. And you’re still sharing with the potential company or family. Okay, it’s not this one, but what about this? When you’re still getting that opportunity to choose.

[00:35:58] Annette: To be fair, that’s what apartments and condos do every single day. An apartment building, when you walk through the model, it’s not the one you’re living. So I absolutely agree with what you’re doing because, obviously, we’re just checking boxes like, yeah, three-bedroom, two-bath. The person doesn’t even know exactly what they want either. They just know they have this list of things that they need, and then you’re finding what’s available for them. So we think it’s a great idea.

[00:36:26] Heidi: Yeah. And we actually do it with our short-terms too. We’ve had people come back, and we’re like, that’s not available in your timeframe, but you have this other one. And so we’re just really transparent with them. We do get the compliment they are true to their photos, if not sometimes better.

[00:36:43] So I’m not worried about that either. So yeah, we just get creative how to pull. I’m used to doing that with the long-term rentals. I will leave a house up because it’s not photo-ready that’s becoming available. But they’re very much alike. They’re in the same neighborhood, the same floor plan, but there it does change a bit.

[00:37:07] And I let them know like, oh, this was not– actually, it just got rented, but the other one is ready. I can show it to you. And a lot of times they are. I have the same models, and one just happens to get rented, but no one’s moved in yet, so I can show them that one and be like, the other one will just change. And here are some old photos or something. So I was used to doing that myself with my day job. With this, we’re like, you can implement the same model here.

[00:37:35] Jonathan: Yeah, and if it’s one that’s just too different, then you just stipulate that in your listing and say, hey, this is not quite ready. It’s going to be furnished in a specific way, but at least it gets some of the data out there that can at least be recognized on someone’s search.

[00:37:50] Heidi: Yeah. 

[00:37:51] Annette: You mentioned clients. Who are your clients now? Are you pivoting to help others? Define what your client is now.

[00:38:00] Heidi: it’s a mix because we have returning clients. We’re seeing that now, or by referral, the insurance cases, our clients. Oh, another one, people moving out of their homes. They’re selling, and they need that intermediate space to move in before their next home. So we have those type of clients too, that come in, that need a middle, not long term, but just enough to find their next home.

[00:38:26] Jonathan: And another big one is our homeowner clients that we work with, and we arrange management contracts with them to do a full-service management where we charge a commission at a specific rate based on the property. And they enjoy that management service for as long as they would like to have it.

[00:38:47] Annette: How are you acquiring those clients?

[00:38:49] Jonathan: That’s been a mix of being out on Yelp and Google. Some of them have been just from my old neighborhood, where I used to host a lot of neighborhood parties. They heard what we were doing with that place that we launched, and they want to know how to be creative in that space because if they don’t work with us, then they have to go with just renting unfurnished on Zillow.

[00:39:10] They know that there’s a chance that it can be done better. And by the way, someone with the capability to do some maintenance and house calls needs to be at their disposal as well. Unless they see themselves being directly involved and then physically close to that place, they have to hire someone. And the alternative, I’m sorry to say, no offense to other property managers out there, but they charge a 10% rate to do not that much. 

[00:39:41] Heidi: Yeah. 

[00:39:42] Annette: Yeah, that’s all debatable, obviously, looking the contract to contract, but you said Yelp. I’ve never heard anybody mention Yelp.

[00:39:51] Sarah: Please elaborate.

[00:39:53] Annette: Yeah. Tell us what you’re doing there. That’s interesting to me.

[00:39:55] Jonathan: So the Yelp is new, but we’ve started to do paid Yelp ads, and we’ve actually got calls from there more than Google.

[00:40:03] Annette: What? Okay. Give it to our listeners. Let’s go. Give it to us. Make it juicy. Let’s go.

[00:40:10] Jonathan: I can’t really explain why. I met someone else that’s in the short-term space, and she’s probably six or seven years ahead of where we are. A very successful firm. Maybe I’ll just plug her. Vacation Rentals by Kimberly in San Diego. She told us that she gets some of her leads from Yelp as well, which was news to me, so we just decided to try it out. So we want to be present in both spaces, everywhere we can, and we’ll invest more deeply where we start to see results.

[00:40:39] Annette: So you’re running paid ads. 

[00:40:41] Jonathan: Yelp paid ads.

[00:40:42] Annette: You said paid?

[00:40:43] Jonathan: Yeah.

[00:40:43] Annette: I did not even know that was a thing. And then are you running Google paid ads also?

[00:40:47] Jonathan: We are to a smaller degree. 

[00:40:49] Annette: Can you share your budget on that with us? 

[00:40:51] Jonathan: So it was $25 a day, and that’s per page [Inaudible]. It’s a pretty articulate structure how they do that based on who clicks. I reduced it to five because I still want to have the presence and the capability, especially on Yelp, where it shows projects, and it gives your logo, and it just looks like a more thorough professional page. And you’re just doing way more of the pay-per-click advertising on Yelp. 

[00:41:17] Again, the jury’s still out on whether, at this point, and for us, it’s the right fit to pay for that type of stuff. But more central to our strategy is we are nearing about 18 properties between us and our two managers that work with us.

[00:41:33] And then there’s, of course, our contracted help. We’re pretty close to being okay with where we’re at now, with a handful of new acquisitions over the past couple of weeks and going into the next few, so we don’t necessarily need to take on a lot more business and don’t need to pay to do that more heavily.

[00:41:50] We’re at the point where sometimes you guys might have experienced it. Let’s normalize with what we’ve got here. Get our legs on grass and get good at these properties, and then we’ll move forward from there. 

[00:42:01] Heidi: Yeah.

[00:42:02] Jonathan: But we don’t want to–

[00:42:03] Annette: I love the idea because people want to know, how do you get clients? How do you get clients? You have to advertise. And so sometimes just paid ads like that, to me, it’s genius because you’re trying it, and it’s a numbers game. So how many leads do you really need to get that one client that– especially in real estate, one client doesn’t mean one property.

[00:42:24] One client could mean five, or 10, or 20, or that one client knows five people. So I just applaud testing it, hearing what is working for someone that is a very similar industry as you. If it worked for Kimberly, why not try it? A lot of people are very scared to test, marketing dollars, whatever it may be. I’m glad that you shared that. You’re out there testing things. 

[00:42:51] Heidi: And I’m sure this has been the story for a lot of hosts and a lot of property managers picking up the phone and calling listings. You look and see if there’s a home that’s been sitting there, which was the case for our Carlsbad house. I saw that it had just been sitting there.

[00:43:08] I saw that they were asking for a little too much for just a regular long-term unfurnished, but the numbers made sense for us, what we’re doing. So not being afraid to pick up the phone and calling owners and saying, hey, are you open to this idea? And here’s the model. Everything’s on board with the city, with your HOA, whatever it is. And that’s another way. You have to put yourself out there. Closed mouths don’t get fed. You got to talk. You got to ask. 

[00:43:42] Jonathan: So another one of the thing I would say is just encouraging everyone to talk about your hustle. A lot of people just feel like they’re a little bit ashamed to say, oh, I’m a realtor. I’m trying to get good at managing properties. People would be like, what? How are you doing it? Explain it to me. And they’re just uncomfortable because they might fear that it might not work out or whatever.

[00:44:04] But you talk to people enough about it, especially– I talk to people all the time on base about it. I’m always talking about investing in stocks and making money. And a lot of people, it’s just like they’re not trying to hear about that. They’re more worried about what’s going on with the military disposition across the Pacific.

[00:44:20] And that’s just an example, but not everyone’s into what you’re into, but when you talk to enough people, especially people that are on a similar mission where they’re just trying to be better and do business, they might not be in a space where they’re going to be a partner for you or maybe a client right now, but they know people.

[00:44:39] And maybe later on, just talking about what it is that you’re excited about and something that you’re trying out will generate conversations, and they’ll come back, and maybe they’ll be ready to do business with you later, or their people will.

[00:44:51] Heidi: Yeah. At the Tides community where the townhouse is, that’s how we acquired three other properties there. I will tell you the HOA, the teams on, or what are the members on the HOA team are homeowners too, and they have bashed us. They have put him out there on blast, like, try to do short-term rental here or whatnot.

[00:45:17] So you’ve got these homeowners, they’re like, can you do it? Some of them are opposed to it, and others are like, no, we want to do what you’re doing. We have to move. We’re going to rent our house out anyway. So we heard that you’re doing this, and it seems like you’re still doing it, so you must be on board.

[00:45:41] So then with his connections in the community and talking about it, and flat out going on the Facebook group, hey, if anyone wants management services, here we are– and so word of mouth. And then some of them were on edge. We’re like, I don’t know. We haven’t heard good things about him or what’s going on. They’re our clients now, and they’re extremely happy. At first, they’re nervous. It’s the unknown. 

[00:46:08] Jonathan: Yeah. We had to just get out in a very verbal community and make sure that everything is on message and consistent with reality, as opposed to some rumors that we might have been operating in the short-term space there. Just because some people were able to put a few things out on Facebook that were untrue and don’t have to be accountable for what they said, that’s on them. That’s fine. 

[00:46:30] But being able to have conversations face-to-face with people that are interested in doing business, and despite the fact that they’ve heard, I guess messages of warning from people in the HOA that, hey, this might not be the best move for you– just go with a different strategy– then they hear us out, and they’re comfortable with how our business is, how ethical we are, and they want to make money, maximize our investment. 

[00:46:54] Heidi: Putting yourself out there, he’s really good at that. I’m a little more shy. I’m like, I just don’t want to impose myself. But if I don’t know you, I can make that phone call and negotiate it. He’s really good at putting us out there with people we know, anyone. I’m learning from him. Yeah, so if we were to give someone advice, go to your community. And if you are tight with your neighbors, anyone, just put it out there, and be excited about it, and don’t be shy to ask because it’s worked out for us.

[00:47:29] Sarah: I think that’s what so many people are afraid of. They’re ethical. They know the laws, they’re doing what they’re supposed to be doing, and they’re afraid of someone calling them out on something that doesn’t exist, so it doesn’t pertain to their business. And you just have to be continually educating yourself, being in contact with your HOA, with your city so that you can be like Jonathan and Heidi here, saying, I hear you out.

[00:47:53] I understand the rules and laws. And because of that, we’re actually operating in this way, which is in complete compliance. And not being nervous about standing up for yourself and your business. Knowing that you are doing everything you can to operate safely. And knowing that you’re in a community, and you’ve agreed to live by certain laws.

[00:48:10] Annette and I always say that you can always operate somewhere else, but the fact that you are operating within the laws of that community, that’s all that matter. And knowing that you can say that confidently. 

[00:48:21] Heidi: Sure. 

[00:48:22] Jonathan: Yeah. And then being considerate, hearing people out if there are concerns, like, a loud dog or whatever. Being a good steward as a property manager.

[00:48:30] Heidi: Keeping them happy too, being completely transparent throughout the way. Some things aren’t always like, oh, we had someone in your house and this happened. But we let them know ahead of time. We are always communicating, and open dialogue with them so they know we’re taking care of it. And so now, they feel comfortable referring us to other neighbors, or friends, or someone. Yeah.

[00:48:57] Annette: So what’s next when you retire? And Heidi, probably, you’re going to leave this day job. Do you guys have a plan for the next steps for the business and for you to as a couple?

[00:49:07] Heidi: So it’s crazy right now. It’s been juggling children, our day jobs, and the growing business, and then us. It’s why I’m looking forward to his retirement. And somehow, I feel like I’ll be retiring too. I’m this big manifester, and he laughs at me because he’s like, you did not not do the work. So I’m like, I don’t know what it is, but I’ve always told myself when I turned 40, I’m going to retire. 

[00:49:35] Doesn’t mean I’m not going to work. It’s just I will retire from someone. I have one person above me right now who I love working for. My day job’s great. I have so much flexibility, but I’m still a little tied up. My vision was always, I’m going to retire. It doesn’t matter if it’s the last day I turn 40 and I’m going to be 41.

[00:49:57] Within that year, I will be okay. It was before meeting him. It was just always in my mind. And then meeting him, the conversation was like, I want my time back, and I want to own my time. I don’t want to work for someone else. The government’s had enough of me. I’ve had enough of them, and– 

[00:50:18] Jonathan: I didn’t say that.

[00:50:23] Annette: Right, right. No one’s listening.

[00:50:24] Heidi: The military. It’s a hard life, and I think they all end up feeling, I need to rest. And so, yeah, we have enough work. Our business has enough work for us to fully give it our full attention and continue to grow and massage little areas that need fixing because it’s grown so quickly that you’re still learning too.

[00:50:55] Yeah. Next immediate step is to build a successful team to take off our plate those management tasks that we can then free ourselves up to do more of the strategic thinking, and then just expand mostly nationally. We want to get into other cities that are special to us– Vegas, Miami.

[00:51:15] Jonathan: We are mostly in San Diego, but we also have a place in Scottsdale where we got to cut our teeth and forming a team out there as well. And we’re going to just do that. We’re going to replicate it and get it better, going to places where we want to be. When we do our retired lifestyle, maybe a little bit in South America, Costa Rica, where she’s from, El Salvador.

[00:51:36] Heidi: El Salvador. 

[00:51:37] Annette: Nice. 

[00:51:38] Heidi: You’ve got Surf City there, which is huge. I was living in Maui, and I’ve got these Hawaiians traveling to El Salvador to surf out there. So they love it there. A lot of Americans love it there. I meet people that own. I lived here. In Encinitas, I remember meeting this guy, and he’s like, oh yeah, I own two homes in El Salvador. And I’m like, ha. Further validates what I’ve been wanting and what I feel in my gut. It’s like, that’s a good place to go and invest– Costa Rica. And, like he said, places that we love going to, why not? 

[00:52:14] Jonathan: Yeah. Hawaii is on the list too. 

[00:52:16] Heidi: Oh yeah.

[00:52:17] Jonathan: I’m a realtor out there, and we want to expand there, for sure.

[00:52:21] Heidi: I’m a little crushed with what happened with Maui because it was my dream to purchase a property in Lahaina. I lived in Kaanapali, Lahaina area, and yeah, I’m just a little– it’s not the same. It’s not going to be the same. And I will always go back, but it’s not the Maui I knew, at least where a lot of healing for myself happened, and my children. My mom’s still out there. She moved with me. She stayed. But yeah, we will definitely do a lot in Hawaii. I know we will.

[00:52:56] Sarah: Your story is really inspirational, from starting out and getting your partner on board, a new partner of yours on board, and then pivoting when someone tells you you can’t, and you figuring out a way to make it work and fit, to having your full-time jobs and now working towards leaving them, to then adding team members so you can free up your time. It’s very inspirational. Where can our listeners find out more about the both of you and your company? 

[00:53:26] Jonathan: We encourage them to check out our website, which we’re currently revising, but loveliving.com.

[00:53:27] Annette: You’ll always be revising sit, by the way. I’ve never asked anybody about their website that hasn’t said, I’m working on it right now.

[00:53:36] Heidi: It’s true.

[00:53:37] Annette: But it’s real. Everybody’s like, oh, you’re not going to go to it, are you? We’re changing the pictures. 

[00:53:44] Heidi: But you know what? When it was down, when we were changing from Love and Ventura to Love Living, I was like, we need our website back. I was desperate. I was like, I need to share this. And we’re asking for it. 

[00:54:02] Annette: Yeah. Sorry, I interrupted you. Where can you find this lovely, amazing, SEO-optimized website? 

[00:54:09] Jonathan: It’s essentially a website that is done on Hostaway, which uses our centralized booking platform. That’s in no way a plug. The website is actually a venture to free us up from that. And I have someone trying to build a lot of the same capabilities because as you build out more properties, these centralized booking websites, they love to take their piece.

[00:54:30] Heidi: Oh, yeah. 

[00:54:30] Jonathan: So avoiding that’s going to be part of our strategy. But yeah, lovelivingmanagement.com. You can see a little bit about our properties, the listings as we add them. Over the next couple of weeks, you’re going to see five more. So pop up on there, and you’ll see a little bit about us. On Instagram, love living_mgmt. And we follow you, you follow us already, which we appreciate. That’s actually how we started our conversation, which we appreciate. 

[00:54:56] Heidi: I saw an email ping or a Google calendar invitation one day. I was like, I know this name. Thanks for– I was like, oh my gosh. What? You did what? Yeah, it was pretty cool.

[00:55:13] Sarah: There’s a lot to learn from people who’ve been in business for five, 10, 15, 20 years, and there is a lot to learn from people who are just starting their business. And our listenership, and Annette, and myself included, at all areas and all points in which you guys caught my eye because of what you’re doing and that hustle that you have, but that dedication and focus to hospitality, and that’s what makes it such a great fit for our community and our show here. So thank you for all you’re doing out there in California. And we look forward to what you do beyond. With that, I am Sarah Karakaian. 

[00:55:46] Annette: I’m Annette Grant. And together we are– 

[00:55:48] Both Annette & Sarah: Thanks for Visiting. 

[00:55:48] Sarah: Talk to you next time.