CDRE 30 | Hostshare

 

Short Term Rental Owners will want to know about this NEW company that can help you maximize your off-peak and off-season nights. Turn those vacant nights into options. This week, Jeramie Worley meets up with Sean Wilkinson and Landon Wilkinson, two exceptional entrepreneurs in the vacation nightly rental space. Pilots, STR Owners, leading edge tech developers, and all around just great dudes asking the question: “How do we turn vacant nights into vacation nights?” So, listen in to the exceptional Q&A that might just become the BIGGEST perk yet to being a STR owner! Many of us have assets but we don’t know how to use them. If you have vacant nights, you can now trade those for travel to locations you love or have never been to yet. The Vacation Rental industry is for people who love to vacation and travel, so learn some new strategies here! Listen in.

 

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YOUR Vacant Nights Become YOUR Vacation Nights

Meet Hostshare.co With Us And Let Us Talk About Sharing!

A pilot, an entrepreneur, and a short-term rental owner walk into a bar. You don’t get some crazy joke about a genie in a canoe. What you do get is a company so wildly enthusiastic about travel and how you can take vacant nights and turn them into vacation nights. This brand new platform is launching soon, and it’s called Hostshare. I got a chance to talk to the Founders, Sean and Landon Wilkinson about how it works, what it costs, and why they created this cool new opportunity for short-term rental real estate investors.

We broke out of the studio mold to catch these guys on a phone call. We are finding so many interesting people with so many recipes for success, people who are truly enjoying the journey. We couldn’t wait to capture their story and bring it to you as soon as we could. I hope you enjoy the journey of Sean and Landon Wilkinson with their creation of Hostshare.

 

CDRE 30 | Hostshare

 

How are you doing?

I’m pretty good. Good to see you again, Landon.

I don’t know if we got a chance to meet at all.

I saw Landon and we chatted for a little bit but didn’t get the privilege to meet you, Sean, so good to meet you.

Thanks for having us on.

My pleasure. I like the studio stuff because I feel like it’s personal. Our show is just to give you an idea of who our audience is. Our audience is entrepreneurs, people who aren’t necessarily in real estate yet. Some want to be and most of them are. They understand that real estate is the largest driver of wealth for them, where they are at. A large portion of those real estate investors are short-term rental owners. It’s funny, your product is something I have thought about for years, and so it’s interesting to get you guys on to talk about it.

Thanks for having us.

The idea is to assemble a group of fun people. By telling the audience your origin story, and by talking to them a little bit about who you are, it makes sense for us to have you back on the show when we start talking about topics and things that matter, and debates and things like that. We are assembling our series of regulars. I don’t know if you remember the show, the X-Files. Sometimes it was a monster episode and sometimes it was an episode that moved the story forward. We have both of those as well.

You are in the short-term rental space yourself.

I am. I have been there since 2008 before Airbnb was invented. It was so funny. At the very beginning of my career, I was looking for a good deal for myself and a couple of investor clients. The market was so bad back in ‘08. The only people that were buying were investors. It was so bad. People who were selling properties, it was like telling people they had bad news. People would try to sell their property, and a lot of times they’d have to bring $20,000 to closing just to liquidate the property.

My sales skills started differently than most people because I was trying to help people exit a situation hold their hand while they got off the bus slowly and let the bus go. That bus took with them a lot of carrying costs and expenses. A sales pitch was different for a listing agent and for a buyer’s agent, I was just trying to find anything that would work. The numbers on short-term rentals at that time were great just because there was no inventory. You could fall off a log and profit wildly with a short-term rental back then. I had to lie to people. I had to tell them that instead of making $45,000 a year on a 4-bedroom, I had to tell people you were going to make $35,000 because it sounded more realistic and they didn’t know me. I realized that these numbers are so good, which is why a lot of people move to the industry.

Back then, something interesting happened, which is relevant to what we are going to talk about. I was a sales manager at a development in Branson, Missouri. Some people who were clients of mine had a nice house. This was a nice development made specifically for short-term rentals in Branson, Missouri. Pretty much close to everything, close to the lake. For whatever reason, the people who mowed our yard at that HOA weren’t showing up. The yards were just shaggy. Just not well-manicured and needed a lot of help. One of our owners there had some people coming in from Hawaii whom they had done a home share with.

They are like, “These people are coming from Hawaii. We want to show up best of the best.” I was their real estate agent, and they were like, “Can you find someone to mow a yard?” I’m like, “I got you.” It was ‘08, the market was slow. I showed up. I put my lawnmower in the back of my Ford Escape, drove over there, and got the yard mowed, pristine, and looked great. Just in time for their Hawaii guests who had a great time. I never ended up being able to sell that house. It just goes to show you that nobody cares how good of a guy you are. They just care about results in business. They don’t care that you show up and mow your yard. They just want that house sold.

That was my first experience with somebody who was sharing their home with another Airbnb owner, a VRBO owner. I know you guys built a platform where hosts can share this. Can you guys talk to me a little bit about how you came up with that idea? Maybe what some of the challenges were like, and where you are at with it now? Your genesis.

Sean and I both came from a background in commercial real estate and multifamily. I started my first one several years ago. Since that time, we haven’t been working together. We have done different things over the years together, and about mid-April, we were kicking around the idea of buying a sailboat. We own an airplane together. Owning an airplane together gave us a sense of, with one other guy, so much more efficient, even with us using it as much as we want to. We have rarely had a conflict on schedule. It dawned on us that with all these carrying costs, you have got your annual, your insurance, your hangar costs, if you split them three ways, owning a single-engine airplane becomes economical.

There are so many luxury assets that sit mostly unused. We got thinking about buying a sailboat together and trying to do the same thing and find some other people to do that. The conversation was, “Can we build a platform around making shared ownership or fractional ownership simple and clean? We went through different iterations of what that could look like starting with mostly boats and then into like, “Could you do it with several luxury items?”

We got talking about, if there’s also waste in that space, our short-term rentals sit empty upwards of 50% of the time. There are still great investments. What’s happening with all of that? When you run the numbers, it’s like $6 million Airbnb listings with 50% average occupancy upwards of $900 million per day of waste. $330 billion a year that’s just lost potential revenue. “I wonder if there’s a way to solve that problem.”

You go through ThirdHome, Kindred, or HomeExchange.com, and they are all second homeowners allowing the home-sharing platforms that exist right now to be geared towards second homeowners, but not short-term rentals. Since they are requiring you to block off time and the future, you are only ever going to have most likely revenue days lost. For us, a light went off. Most likely within five days, those nights carry a high probability of going unbooked.

If we can build a platform that allows people to book on short notice and have instant access to the benefits, whereas all the other platforms, you have to either build credits through sharing nights on their platforms or what have you. That’s what we did. You sign up with your listing and you have instant access to three weeks of travel a year. You are sharing several nights based on your average nightly rate. If you have a higher nightly rate, you will share a lot less if those nights are available and unbooked on a last-minute basis, say your property is $1,000 a night, you might share 3 or 4 nights a year. Whereas if you have a $100-a-night property, it might be 30 or something like that. I don’t remember.

The other thing we noticed too is that every travel platform was centered on the traveler and making the traveler experience important. As Airbnb hosts, a few times we have felt slighted by the platforms where there’s a bias towards the traveler. What’s nice about Hostshares is that we are strictly working with hosts and short-term rental owners.

We can be a resource for hosts and the travel aspect is the first thing we want to focus on, but we love the idea of it being like a club for owners and short-term rental hosts where you can create a place that is meant for hosts to benefit their business. That’s step two of what we are excited about is building all the resources for hosts to make their business thrive and utilizing this this free travel aspect is going to be a real game changer for a lot of people and getting the maximum value out of their properties.

 

 

You guys are very observant. I can tell. Your logic behind the launch of Hostshare and just the way you have observed some things about Airbnb being very traveler-centric rather than host-centric, you are not alone in that at all. If you go to any Airbnb forum of short-term rental owners on there, everybody is complaining constantly about Airbnb favoring the traveler because they identify themselves as a travel platform, as almost a hotel serving transient guests. The problem is that they don’t own any inventory, or at least not yet. They are starting to which is a red flag and a concern. It should be a concern for some short-term rental owners.

Now your platform is directly competing with you, but you have also got what you are talking about, which is this complete and blatant disregard for the asset itself. That asset itself is so special. It creates freedom for the host. It creates memories for the people that stay in it. It’s so very special. That’s why when I met you and we talked a little bit about what you were doing, I have got to get you guys on this show to talk about what you are doing and how it works because that’s one of the things that I preach about all the time to all of my investor clients.

Even right now, my wife and I and some business partners have started an odd concept where instead of just renting a condo or renting a home, we are renting a ranch. It’s an 80-acre piece of land with a 10-acre private lake stocked with bass, crappie, and bluegill, and rumored some record-sized catfish that we haven’t caught yet. We have cut-in four-wheeler trails, but this is about an hour outside of any major city.

We are on the bleeding edge of this, which is not where we want to be. We want to be on the leading edge of it. The interesting thing about that is that it’s something that we could share. It’s an asset that we have got. Even though we are in an area that is new to short-term rentals, it’s a very rural county. Sometimes it’s hard to find cleaners or people to do marketing for us or things like that. As a group of owners, it would be nice to get this off and running a little bit. We need to be able to use this asset better.

We need to say, “If you want to do some marketing for us, then you and your family get two weeks out of the year to do marketing for us. It’s your job to go connect with the cattle ranches in the area, or anybody that has groups, or you be our full-time marketing person and you can we don’t have the revenue to pay you yet, but we have this asset that would be a great thing for your family.” I love the fact that you guys are helping owners use their assets to benefit their own lives. Talk to me a little bit about how it’s working. Is it pretty seamless? Are there some challenges?

The concept was launched on April 15th, 2023 and we started with a landing page with a signup. We have got I believe somewhere around 600 properties represented now with the owners that have signed up. The actual traveling will be live sometime in October and people will start having access to their portals. What’s nice, is one feature that does set the host apart is the simplicity of use. Our development team has created a simplified onboarding process where you literally just enter your URL and instantly everything auto-populates. Every other platform that I have tried to use or we have tried to use for home sharing requires a fair bit of work to rebuild a whole new listing on a new platform.

Anyway, I was going to mention that because lower barriers use even more, which is our goal, just make this simple for people to sign up and start traveling right away. Along with being integrated into channel managers for short-term rentals and stuff like that where you book on our platform, it will block it out on Airbnb and VRBO and all that. Getting all the APIs for those calendars and stuff set up is a process on the development end.

Not going live yet has given us a chance to do a lot of one-on-one discussions with hosts and better understand as we are building the platform, what’s a priority. It’s been fun because once people grasp the notion, it’s compelling. It’s a new way to think about your vacancy that it takes a second to communicate, but once they get it, it’s interesting.

Along with the way you travel too because it does change a lot of how people travel being last minute. For us, especially as pilots, a lot of times you are dependent on the weather. We have to book places last minute almost, all the time. Once you have a critical mass of places, if you have 500 homes that are on Hostshare in one city, the reality of one of those places being vacant when you are 5 or 4 days out is pretty high. You have to be a little more flexible with how you travel. That’s going to be something that people might change their travel patterns a little bit.

 

 

I will say too, the cost of travel. You get three weeks of nights as part of your membership, and that means there are no taxes, no commissions, and no nightly rates. It is just cleaning fees that are being paid for as a part of that stay. It does give people a little bit of imagination on what’s possible then with, if you have got seventeen Airbnbs, for instance, you don’t even need your own home. You could stay on Hostshare theoretically full-time. It’s fun to think about once that becomes live to see what people will do with it is going to be interesting.

The off seasons would be different at different places in the world, so you could stay on those unbooked nights. Talk to me a little bit about the onboarding process. You said you were having a lot of one-on-one conversations with hosts. How do those conversations go when you are onboarding? What information is somebody going to need to know, or what is your vetting process like to make sure that you have like-minded hosts on the platform?

The hosts that we have talked to are always funny because there’s a faint concept of home sharing and how that works for a lot of people. Even though it’s still fairly a new idea for a lot of people, if they are familiar with home sharing, they expect us to operate similarly. Am I swapping directly with another person on that last-minute basis? They may have some notion of how it works or if they have gone through the website, usually they can answer most of their questions pretty quickly. In the onboarding process, there’s authentication that’s part of what we build into our costs that when somebody signs up, they are getting authenticated with everything.

Like ID verification. We also have a review, we have a certain amount of reviews needed and a star, a rating quality. There is a standard there that we want to hold. One of the neat things about using Hostshare is that people who are coming and traveling to you are all hosts and short-term rental owners. We expect there to be an elevated level of responsibility that these people will hold. As a short-term rental owner, myself, anytime I’m traveling somewhere, I feel like I’m conscious of the places I stay just because it’s that ownership mentality when you have experienced the other side of it.

 

CDRE 30 | Hostshare

 

Do you have ice trays or not? Chris and I stayed at this rough place in Sarasota one time, and there weren’t any ice cube trays, so we had to get the tablespoon and half tablespoon measure and we filled those up. We created our ice trays, but we shouldn’t have had to. You just want to be sure that these hosts are taking, so that’s the next question I was going to ask you. Part of that onboarding, what is your measurement of standard, because that’s a real problem in our industry right now.

We heard about that at Skiff too, that the industry is very fractionalized and people don’t know what to expect anymore. This is why companies like Marriott Bonvoy are going to stand out. It’s like the whole point of the short-term rental industry, from the beginning of it, is a great way for the average Joe to build some wealth or to just have a place for themselves and their family to retreat to. We all need a place where we can make those memories with our family. That’s important. Do you have questions there to make sure that they meet your expectations of minimum standard?

 

 

Since there already has to be an operating host on a platform like Airbnb or VRBO, there’s going to be a pretty quick way to vet. If three stars with a bunch of negative reviews anyway, we are going to have a benchmark for 4.7 minimum star rating. I don’t know if that’s what we landed on and then 5 to 10 review minimum. You can’t have to be a pretty established Airbnb to become a part of it.

Are you guys going to stick to your guns on that? What if somebody shows up with a beautiful mansion or horse ranch? It’s tempting to say, “We got to put this on the platform.”

Hopefully, if that’s the case, it won’t take them long to get a few reviews.

I’m glad to hear it. Keep your standards. That’s important.

One thing I’d mention too about the larger places like large mansions and stuff is one thing that’s neat to think about is you have a home that might be a couple of hundred dollars a night property, but everyone gets the same amount of nights. It just depends what varies is the amount of nights you share on the platform.

Let’s talk about the use of it. What it look like to me if I were going to sign up my ranch on the platform, what would my expectations be as a customer?

You’d have it listed already, theoretically on one of the major platforms. You will go in, you will enter your URL, and go through on scrape all the data from that listing that will then auto-populate into your listing with Hostshare. You will have a 24-hour review period where we will make sure that there are no issues between the authentication or listing standards. Once you are live, you virtually have access to any of the homes on the platform. It could be a multimillion-dollar home or an apartment that’s being subleased.

The multi-million dollar homes are going to be on there far fewer nights than the smaller properties. Your place, for instance, if it’s an 80-acre place I’m assuming it’s going to have a higher nightly average rate. You are only going to be obligated to share a much smaller number, assuming it’s a higher nightly rate. Again, only if they are available. The exception and you are booking 90% plus occupancy you may never share on Hostshare because ultimately, you are generating revenue for all those nights. That’s the goal of a host. We don’t have a minimum sharing requirement where you get booked off the platform if you don’t have those nights available, you don’t share them. That’s fine, but the average is going to be sustaining it.

If you are making money off your assets and you can afford to pay for your vacation, that’s fine too. It almost seems like your platform acts independently from affordability because it offers variety, which is such a huge human need. If I understand you correctly, you enter your property on there, and based on your rate, quality, and offers, is the number of nights that your property would be required to be available for Hostshare.

It is the share calculator on the landing page. You can enter your nightly rate and see how many nights. You could explain how that formula works if you want. How that works and how we make it to where it evens out. There are 21 nights available for every person who signs up across the platform. What you don’t want is to say that everyone gets 21 nights, but then every property is only providing 7 nights. The mathematical side wouldn’t work out if that was the case.

How it works is just to say that the average across our platform, if you took all the listings on Hostshare and say the average is $300 a night, that’s our equilibrium or our median. You’d multiply that by 21 to get you, it’s $6,300. You take that $6,300 and depending on what your nightly rate is, say if your place is $1,000 a night, then you would divide that by $6,300. It’s the equal value contributed. It might be 6 nights you provide if your place is $1,000.

What’s neat is as a traveler, you sign up and you have 21 nights of free travel and you are able to look at, say if you are more of this, you have a pretty open schedule. You are able to travel at a whim. You could be looking out for these places that are going to be on Hostshared much less frequently than the places that are on there 30 nights a year or whatever. Travel to those places and get $2,000 a night, and stay all 21 nights if you are ambitious about it.

If you are flexible, by using Hostshare, you could be a couple of thousand dollars in night properties every time you travel.

We are booking some off-season or off-peak nights. If we happen to be traveling to a destination during that time, there’s probably a pretty decent chance that there’s going to be a Hostshare property available in that area. Are you targeting specific areas with a certain density to try to build up your inventory of sharing? What do you call your ideal customer, a host or a sharing host?

The top 40 STR markets in the US we will be targeting by ZIP code, both with probably a mix of a variety of formats, but specific markets like Phoenix and Tennessee, and all these you hear about that have a very high concentration of short-term rentals will get focused. That’s where a lot of travelers are looking to go. The more quickly we can build up critical mass in those markets where there’s going to be a property available. If you are on a lot of the forums, it’s clear that there’s some constriction in the market in terms of booking and occupancy. There’s the viral post that went out that was claiming a 50% reduction or whatever. I don’t believe anywhere near that.

 

 

I saw that post and that was data from all the rooms. I saw somebody else post to that. It was some data from AirDNA. It was one of the executives at AirDNA who retweeted that or commented on that thread. This isn’t super accurate. It was more like a 5% to 8% reduction in some areas worst case. Every market in the world, since the history of time has had cycles. It’s nice to see everybody taking a deep breath because it creates a shakeout and that’s how you rise from there.

We have a real estate team in Branson, Missouri. We have got one in Upstate New York, in Coastal Carolinas, in Oklahoma City, and the Twin Cities, Minnesota area. Everybody is experiencing a 20% reduction in everything right now. It stands to reason that the short-term rental industry would as well. We did have a lot of investors that came to this market just for the money not because they wanted to be graded hosts. They are realizing that it’s not the easy money that everybody talked about. It is the highest-paid part-time job you will ever have.

Even more, now that you can use it to travel wherever you want. I’m not scared of that. It’s okay and it’s a great time for us to innovate and to launch ideas like you guys are, because this is when people have the time to educate themselves. They are not so blindsided by the need to constantly get their to-do list done because they are breathing a little bit and breathing is good.

How did you start this? You guys are thinkers and you are entrepreneurs because you ask fun questions. It’s those questions that you ask that lead to some of the greatest ideas out there. These how questions. How do we monetize this? How do we do this? You guys were a couple of pilots and tell us about yourselves. Where you are from and how you got started in the entrepreneurial game.

Sean and I’s entrepreneurial journey began as a band when I was 15 and he was 12 or 11. Back when his bass was taller than him.

What music was it?

Funk Rock. We always said it was a mix somewhere between if you had Chili Peppers and Jack Johnson, we were falling somewhere in rock.

Where are you guys based?

Central Washington, a town called Yakima.

What are the people like there? What do people like music-wise and culture-wise?

It didn’t matter to us. We just played what we wanted. We brought Yakima to play music most of the time. Growing up it was funny, the early memories of thinking we had a tour along the West Coast, and then you realize you have all these holes in your schedule, and I’d be in the back of the bus trying to call places to see if we could play that night. As a 15, 16-year-old, or 17-year-old, it was a great sales learning experience. As we got further along, we ended up working with some neat engineers and producers and getting to see how it was professionally done and understanding once we got into the college routes, that was a good introduction to business, but never paid for itself. I got into painting contracting to afford the van and the lifestyle of being a traveling musician.

Sean worked with me for a while on that, and then did his own thing and got into real estate. Neither of us did the college route. We come from a non-traditional background. Our dad is in the real estate fund syndication direction. We did have a great mentor in that growing up. When I was seventeen I was in a called running start. You guys probably have it over there too, but it’s where you are in high school and college simultaneously. I ended up buying my first real estate deal at that point and I put $5,000 down on this postage stamp lot with two mobile homes on it.

Was your family freaking out or were they proud of you and standing behind you? What was it like when you were doing this?

I was just doing it to try to buy property before my brother did. That deal was what I call my college education. I was eighteen at the time when I moved in. I got my first vacancy. I moved in person with their security deposit, but they didn’t have their first month’s rent. I was like, “Just get it to me next week because I was going out of town.” I never saw another dime from them. They left the place a disaster.

Did you have to evict them?

I had to go through the full eviction process.

How long did it take?

It took three and a half months, but we are in Washington, so it’s a different ball game than most. It was a mess. We were going to court, and so I was talking to the judge at that point. It came to the point where I was standing outside with the sheriff as they moved boxes out of the place. After that, got a decent tenant and then realized the reality of if I had a $700 mortgage, but I was able to gross $1,400 a month. After my expenses, I was maybe cashflow in a few $300 to $400 a month. That was what got my wheels turning on just building, how do you get more cashflow and the passive residual income like that?

That led to doing lots of flip projects. I started flipping homes when I was eighteen. I was interning at a tech company, and I wasn’t making any money doing that. It started flipping a few homes, and I did all the construction myself too with another guy who was teaching me along the way. I had to do all the electrical, plumbing, and all these things. We ended up flipping around eight homes in that period before I started a management company where we started buying real estate. Now we have got a portfolio of maybe 150 units and that was what I was doing before starting Hostshare. That was what gave me the flexibility to get into it.

Was your goal just to acquire doors and to build passive income that way, just so that you wouldn’t have to go work at a job so you could do the things you wanted to do? Was that the idea behind that?

Yeah. I loved the game of real estate from a pretty young age. Going into these deals so young, I didn’t have credit. I didn’t have any money to work with. I had to get creative and probably 80 plus of those apartments. Landon and I had bought some storage units together. All those are creatively financed seller financing, low down payments, and maximizing the management side and managing them well.

I could write a book on creative financing, that’s for sure. He’s the expert.

What’s one of the most creative deals you have done?

There was a portfolio of four homes that I bought. I didn’t have any money to put down. I was coming into a situation where the gentleman had passed away and he left it to his wife and she lived out of town. I knew the home values were probably a couple hundred thousand dollars apiece. They were all filled with tenants and she didn’t want anything to do with them, but they wanted two of these homes to be purchased outright, I’d already asked for seller financing on all of them. I told them I’d buy two of them outright, and if you kept 2 on contract, they were worth $200,000 I offered around $130,000 for them, but she didn’t want to deal with tenants.

I got an investor friend and told them, “I will let you buy one of these homes for $130,000 if you finance one of them to me for $130,000.” He put all the cash up, he put the $260,000 to buy the 2 and finance the 1 to me interest-free for 6 months. That was the whole goal. He seller-finances the other ones. The 2 were seller-financed 5% 15-year notes, and then the other one was interest-free for 6 months. I flipped that one and sold it for $230,000. The other two were left on a contract. I still have those now, but one of those, I had a little building in the back that I ended up turning into an ADU used as a short-term rental. It’s that back building gross is probably $3,000 a month. The front building also is rented out.

Do those people get along when you have short-term rentals in your long-term rental property?

I put a fence, so it feels like a fully safe property.

Good. I was wondering how that goes. “There’s people in my back, in my pool. Can help me out there? They are cleaning the pool and it doesn’t look like our normal pool cleaner here.” That’s funny. That’s cool. That’s a lot of interesting experience there. I also experienced what you experienced in terms of the eviction and all that. It was our first property as well, so we got a trial by fire there.

It always is hard knocks.

It’s always that way. That’s what drove me to the short-term rental business or to vow off of long-term rentals. I’m also in a second-home market, so the available pool of quality renters is relatively low where I’m at, and in most second-home destinations you have got the people that own the attractions, the land, and the businesses in the area. You have people that service the businesses like the waiters and the employees. There’s just a stark contrast in income there. There is no middle class.

There’s the availability of middle-class people. What do I mean by middle-class? I grew up middle-class. Upper middle class, my dad was a union electrician, and my mom was an executive secretary for the Department of Pediatrics at Washington University in St. Louis. These are great paying jobs for people of their age and their socioeconomic status.

Middle class, we grew up appreciating the things we had because mom and dad worked hard for them. Click To Tweet

Middle class, we grew up appreciating the things we had because mom and dad worked hard for them. We took care of them and we knew to turn the lights off when we exited a room and to conserve what we could so that we could go all forward. We wanted Mom and Dad to win so that we could win and get those things that we wanted, go on vacations and stuff. What I found, especially in short-term rentals is interesting. Do you remember post-COVID when we got a lot of stimulus checks? We had some of the roughest guests in our short-term rentals, they were calling them stimies. Have you heard that term?

We had this nine-bedroom lake view and gorgeous home lodge, and people were smoking cigars inside the unit. Give me a break. Generally, common sense. On our very first short-term rental, we had a 4-bedroom, 4-bath, and this special quiet community. We had some high-net-worth people. The guy was a pilot, and they trashed the place. Maple syrup on the walls. They’d bring their kids. There’s a definite sweet spot of I don’t know how you find those quality people. I’m sure they exist in all socioeconomic classes, but the data suggests that if you hold out your property to that middle class and in a place like Branson, there’s not a lot of middle class.

We haven’t been able to build a portfolio of long-term rentals. Ours has been strictly short-term for the most part, which is why we just doubled down and focused on that. How is that compared to storage units and some of the other stuff that you have got? Did you go to the storage unit because you are like, “I want to try out this sub-asset class?” Are you like, “This has got to be easier than dealing with humans?” You are still dealing with humans.

It’s nice not dealing with plumbing.

I bet. Plumbing was the first a-ha for you. This is refreshing.

It was that and the simplicity of getting tenants out of storage was specifically in our states. That’s become nearly impossible. He has property in Oregon. I had property in Oklahoma. We had a couple of 100 multi-family apartments during COVID. We were fortunate with Oklahoma that the tenant and just the legal situation apart from the federal restrictions with the Department of Health or Eviction Moratorium. Oklahoma was still pretty landlord-conscious. Whereas Washington State and Oregon weren’t.

At that point, for me, a light bulb went off that could happen pretty quickly where you can’t evict or you can’t control your destiny at all with real estate in some ways during COVID. Unfortunately, that went away and went back to an equilibrium. I did sell out all of my properties at that point in 2021 and was able to then turn my attention to another startup that is a whole other story. The property that he calls storage units, we always disagree on the terminology because it’s a small business park. They look like much larger storage units, but they are small businesses that operate like auto repair shops and almost like a strip mall, but it’s more industrial-type tenants.

You got a man door and a garage door as people can get in either way. We are starting to see a few of those pop up in our area too. Need a concept. One of the guys I know that’s renting is a contractor, so he has always got equipment in and out, but he needs an office space for his contracting business. It’s a cool concept.

It’s awesome. The tenants are generally self-employed and hardworking and pay the rent. It’s been an awesome deal because it’s amazing when somebody is self-employed, they are motivated to take care of the property. They are out there blowing off the parking areas and taking care of it. It’s been a neat experience.

It's amazing when somebody is self-employed, they are motivated to take care of the property. Click To Tweet

What’s been neat about that along, which is our real estate holdings and all is it’s giving us the ability to have the flexibility to jump into this startup, whole full-time. There are things that you have to do to keep the wheels turning but that’s what is giving us the flexibility to jump into this and feel self-funded up to this point. That’s the plan at this point unless there was a strategic partnership we were able to work with to get this thing out. We have a great development team now on board that we have relation to and have built an awesome team around this concept and working around the clock to get it done.

There are eleven people on staff now building which is pretty neat.

What strategic partnership would you be looking for would be the best-case scenario for you? We are not going to hold you to your answer. Just free associate. Think out loud for us so that no one is like, “You said it on this show.”

We did apply for, I don’t know if you have heard of the Y Combinator but there was something like that where they can infuse some cash. What you are looking for is the network that they have access to that could be interesting. We are not actively looking for that. If there was an interesting way to get something out or just to get this out quicker because that’s what’s most important to give the platform value you need homes. You need homes to give the new members value. It’s a matter of like you have to scale fairly quickly.

We are working on the affiliate side getting if there are groups like Channel managers or short-term rental insurance companies that want to say, “Sign up through our link.” If this is interesting you just send out an email to their people and then get kicked back on subscriptions that they send our way. There are lots of those types of strategic partnerships, but they aren’t necessarily capital or equity-related. That’s more of what we are focused on those types of partnerships that people want to be a part of affiliate programs.

More strategic alliances by like-minded people. One of the Y Combinator philosophies is that if you are not completely embarrassed by the first version of the product that you have launched then you are not launching fast enough. Speed to revenue is their philosophy. I have a good friend who’s a Y Combinator Alum whom I’d like to introduce you guys to. You guys would get along. You guys said that your dad was an inspiration to you in terms of being an entrepreneur. Did your family own real estate?

Before the band had us house flipping I was eight years old working as a grunt helping. The lead carpenter would beat us up and show us how to do some of the hard work and house flipping. My dad had a management investment company that had a wide range of activities going on investing across the country. He wasn’t hands-on with the flipping but he did see some opportunity in our local market and started house flipping and having us house slipping for him at an early age. He’s done incredible things in real estate and is both just a genuine human and businessman a huge inspiration to me and I’m sure Sean as well. He’s partnered with us on a few deals over the years but largely left it up to us to make our path of it.

It’s always been the most expensive.

If you wanted a hard money lender, you could count on Dad to invest if you wanted but it was always cheaper to find somebody.

It makes you more creative that way. It’s like, “I can’t be the easy pathway for you or you are not going to learn.”

That was his thing.

It’s off to the races then for you guys. It’s liftoff time for Hostshare. You are still in your acquiring posts for your platform. When do you guys plan on going live or what’s next for you guys with this?

October 2023 will be full functionality where people can start traveling. We will probably start with a limited number for 2 to 4 weeks or more to work out the kinks with a small number of hosts for everyone who is invited. We will be exclusive for the first few weeks, but then assuming we don’t have any major rebuilding to do it will be live shortly after that.

Is there anything that you learned along this process that you wish you would have known going into it?

I will say finding like-minded partners and development was we were fortunate. My wife’s brother has done many tech-related startups. He had a development team. He was able to jump right in with in an exchange for equity in the company and put his teamwork on and so we were able to jump in. Since neither of us has a tech background, have 10,000 hours of experience right from the jump which you know is what made it possible without that I’d say it would be a lot more difficult process. Finding like-minded individuals who you can work with you have the experience and giving up ownership at least to me is a no-brainer in our situation.

Finding like-minded individuals who you can work with and who have the experience and giving up ownership is a no-brainer. Click To Tweet

What is that need that you have for someone reading this if they could help fill that what’s one need that you have got right now?

Sign up.

We do think there’s just such great value in it. The whole reason we started it is because we saw for ourselves and if we could trade the nights we don’t book just host somebody that is on the platform and we could go travel somewhere for free, that would be pretty cool.

Plus you are pilots. Fractional ownership of aviation is on the rise right now. I keep hearing about it. I’m so done with commercial travel. It’s just a lot to deal with and it would be nice to have some resources available to take trips like you guys are talking about.

It’s amazing technology to do fractional ownership now as opposed to several years ago. We are on the cusp of the next step of the sharing economy as it relates to short-term rentals, but there are so many other opportunities out there to better utilize existing assets that largely go sit in garages or sit in hangers or short-term rentals. It’s exciting to see that change. At least to me, I find it compelling just makes it so much easier to own things and make better use of assets that we have already.

It's amazing technology to do fractional ownership now as opposed to several years ago. Click To Tweet

Now let’s work on churches next because there are six other days there that we could use for stuff. I love the way you guys think. I want to talk to you guys more. Let’s stay in touch and let’s follow your progress. We want to be one of those strategic allies for you here in the show with all of our offices. Our goal is to continue to grow offices of smart dedicated professional real estate agents all over the country so that we can serve investors all over and send them your way to people that we like. I appreciated meeting you in New York and just knew that there was more there.

I still feel like there’s more here but I thought this was a great first conversation. Thanks for your origin story. The interesting skills that you have in real estate give you the cloud that you need to run this host-sharing platform. This property-sharing platform is for hosts. Let’s keep in a relationship. Let’s keep stay in touch. I just appreciate you guys being available and continuing the conversation.

Thank you.

 

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