Get The Right One First - The Key to Success In Every Situation with Rented CEO Andrew McConnell

Welcome to this episode of the Million Dollar Mastermind.

I'm Larry Weddell.

And before we get started, if you want to know exactly how to win again and again, go to Wydell on winning.com webinar now to watch something I've put together for you. Now let's get going into this episode of Million Dollar Mastermind.

I'm talking with Andrew McConnell and he is the CEO of Rented, the vacation rental company, and he's formerly founder and CEO of Vacation Futures up through 2020, which was the first online marketplace connecting vacation rental owners with professional vacation rental managers. And tell us, Andrew, you're the guru. Now give us some inside knowledge on how to make the most out of our rental property. I mean, you'd buy a home in the Bahamas, Bermuda, Nassau, you know, do you, do you buy a home like that and rent it out just to kind of defray some of the expenses so you can have it a month, a year or something, or any of these people make money.

So this is the big question because when you say get the most out of it, it depends what most means to you. So if Most is pure roi, then you're going in with totally different criteria. It doesn't matter how close or far away this property is from you. It doesn't matter if it's a market you would ever like to visit or not. All you're looking at is my cost of acquisition versus how much I can make on this. And so you might not be someone who ever wants to go to Gatlinburg and the Smoky Mountains, but if you find a four bedroom property that's going to cost you $350,000 to buy, but it's going to net you 50,000 in profit each year, that's a very good investment. It doesn't matter that you don't want to go there. It's better that you're not ever going there because you want to rent it out as much as possible, keep it full, make as much money. If your objective, on the other hand, is I want something within a 90 minute drive of my house that I can go to whenever I want with my family, but I'd like to subsidize that with rental income, that's a totally different calculation. If it's, I want to retire in Aspen or in Palm beach, and what I'm going to do is go ahead and buy that house now and get it paid off by renting it out most of the time until I retire, that's a totally different situation as well. And so making the most from the property really depends what most means to you personally. But yeah, there are people that make tons of money off these things. There are people that definitely do not cover their costs, but that may not have been the intention in the first place.

Who are the guys who make tons of money off these things? Because in my experience, it's like somehow the rents don't keep up with the, you know, the carrying costs, you know, after, especially after 2008, 2005 on really. And so it comes down to how inexpensively you can get into the property, about whether or not you're going to have a chance to rent it out and. Cause that's what you used about the example you used about Gatlinburg, right?

Yeah. So, I mean, this year is a very difficult time to get into the market. Obviously, the real estate market's gone haywire. People are having to offer cash 10% above ask just to secure the property within 24 hours of it going on the market. The flip side of that is the vacation rental market's also gone berserk in the US and so rental incomes right now are keeping up with acquisition costs. The downside is there's no guarantee that rental income is going to keep up with acquisition costs next year and the year after. But you've already paid that acquisition cost. So the thing is, after 08, there was a really good window in there, five, six, maybe more years where there were incredible deals where you could go get a condo down on 30A in Florida for 100,000 or less and you could profit 20 plus thousand a year off of it. Because the crazy thing was real estate prices tanked. So your acquisition to get in went way down. And the vacation rental market actually grew because people had less money. They weren't flying to Bali, they weren't necessarily flying to Hawaii. They were driving to Florida and Hilton Head and to the Outer Banks. And so the vacation rental market did very, very well through that recession, even as real estate prices went down. So, you know, most. I think what they say about a lot of real estate is you don't make your money on the sale, you make it on the purchase. And so it's really going in knowing the numbers and being smart on the buy side.

Yeah. And talk about how understanding that relates to being efficient and running your own business. You see any parallels there?

Efficient to run your own business versus yeah.

Any parallels?

Acquisition?

Yeah. Any parallels in the acquisition? Because I would say that one parallel is when you're hiring, people put the extra effort into getting the right person Rather than just settling, you know, like, we need some employees, so let's just go get some rather than get someone who's going to be super more productive right from the first day, you know, and, you know, that's one thing, you know, like buy a house at a good price, you know, it all has to do with how much it costs you to get into a property. Well, when you get an employee, it has a lot to do with getting the right employee at the right price because then you can accelerate them and give them raises and things like that. But you solve so much problems just by getting the right person to start with.

Yeah, I mean, that's true. Not just on personnel, but on any answer. Right. Getting the right answer sooner. Thank you. Is huge. Because I mean, like you would know from financial services, getting a 3% return versus a 3.5 over 40 years, that actually adds up quite a bit. And it's the same thing when you're talking about growth of when you're doing 10 deals a week and you're doing something slightly inefficiently, it's not costing you that much. When you're doing it that inefficiently and you're doing 10,000, that's costing you a ton. So getting those right answers earlier has compounding effects.

Absolutely. And what are your operating principles, like non negotiables you'll find for, like, for you personally, what are non negotiables in your personal life, in your business life? Things that you know you got to have, things you can't have.

I mean, for me, it's health is very big for me. So getting a good amount of sleep, getting exercise every day. I eat, kind of have a pretty strict way that I eat for six days a week. Like Tim Ferriss said, not so much on the 7th. That's a big piece time with my family and prioritizing that and putting my phone or computer, whatever it is, in a totally different room when I'm with my daughter and being able to be fully present, fully focused there because I don't want those distractions that somebody suggested the other day of giving out my email to a bunch of clients. I said no, I don't want them calling me. They can email me and we can schedule something, but I'm not going to be on call because I'm on call for my daughter. That's what my kind of priority is there. It's treating. So they're kind of more than two approaches, but they're two that kind of stand out to me. Are Putting the customer first and putting your team first. And for me, the long term relationship is with the team. And so if there's a client that may be paying a lot or whatever it is, but they're not treating my team well, that's a non negotiable, got to fire that client because the team has to come before anything else. So I guess just things like that and procedures.

What do you, you know, in running your business? What are some non negotiables of things that you know of managing people, managing numbers, managing performance? What are some essentials that you have found? Just got to get no on an ongoing basis for this thing to go because, you know, it's kind of a weird business for most of us, you know, the vacation, vacation rental thing. But then it comes down to income, you know, and it comes down to number of clients, you know, and now I would imagine it breaks down to number of properties that you have in your closet and then how many of them are being occupied at any one moment in time. It's kind of like in sales, you say how, how big of an organization do you have? How many people do you have? And they said, Well, I got 100. I said, oh really? You only had six out working yesterday, so. Right, you really got six. You don't have 100. So I'm sure you keep up with all of those numbers. Do you have yourself a complex, you know, because you were talking about, you know, we've got to add in some analytics, we've got to add in more complications into our analysis of what's happening to us and keeping up with things. When we started this, I'm saying it very poorly because I can't remember it, but you got a pretty sophisticated approach to running your business. I'm wondering how you keep up with it and what's important for you to keep up with.

Yeah, I mean we have our core company values and the first is better for all and that transactions and deals only happen when they're better for all parties involved. And for us that means that it's not about the number of clients we have, the number of properties, just the top line revenue number. It's that it is the right answer for the client to be with us and paying us the amount they are. And that makes our North Star and the metric that we look at more than anything, what is the ROI we're providing to this client so it could be benchmarked against other properties we might not be managing on their behalf and how we're doing compared to those it could be. How were they versus the market before we came on? And how are they now? They may have been 10% above the market. That was great. But now they're 30% above the market. And are we consistently performing better than they historically have versus the rest of the market? And so that is the kind of overarching metric that we consistently look at is how are we delivering for the clients we serve.

Yeah. And having that automated, having that where you can track it, it's just another step to where you let them know how much better they're doing for retention purposes.

Exactly. I mean, that's part of the monthly reporting that they're getting. Okay, here's how much more money you made this year or this month by working with us.

Yeah. What do you look for from your staff? What's your attitude about staffing? I would imagine your people are not all operating down in the islands, but maybe.

No.

No, they're not. We used to have an office. So historically, we were based in Atlanta. We had an office, Everybody was there. Then we hired more outside of Atlanta over time and had people all over the country. And then at the beginning of 2020, more than 80% of our employees were outside of Georgia once we started rented. And they said, well, do we need an office? Do the people in Atlanta want this office? And people said, no, I kind of like to work remotely and like to be able to have the option to work from home and maybe go to a co working space when I feel like it. So we said, okay, well, we don't need an office for this business. And that ended up being fortuitous because then Covid happened. People couldn't go to the office anyway. And that gave me and my family the freedom to come to Bermuda on this digital Nomad pass. And it's. It's an hour ahead, so I can get up in the normal time, which is 5:30 for me, but that's 4:30 back in kind of New York east coast time. So I have a couple hours before anybody's really online, and I can get quite a lot done. It's been. It's been phenomenal.

Hey, listen, there's a lot of information online, but there aren't a lot of people who have actually done something. In my case, I've actually built a successful business as accrued over 5 billion in assets under management and has done well even during trying times. Now, if you want to know exactly how I've done this, go to Whiteellawinning.com webinar Now, I've compressed a decade of learning into five short weeks. Just for those of you who want to give yourself an incredible advantage and are tired of waiting and watching others move up?

What do you bring to the situation that's allowed your companies or your teams to be successful? What would you think is the uniqueness that you've noticed about yourself that you bring and how you're a difference maker, that you know as people are listening, the whole idea. And it's going to. And it's going to relate to growth, by the way, because companies can flounder without leadership. They could fail without leadership. But if they fail and the leader.

Is there.

That'S on the leader. And the leader's got to produce growth. So what are the things that you bring on a daily monthly basis when you're involved in a situation? Business, personal, whatever. What do you feel like you bring to that team or to that environment? Skill, energy, insight? What do you. How would you categorize your strengths? Because I'm wanting people to think about their own thing as you think about. Because, you know, we didn't do questions before. Because I want them to think about. You better be bringing something to the table, right? You better be definite about it too, you know.

Well, and it has to, in my experience, it has to change, right? If you're not growing faster than the business, then you're not gonna be suited for your job.

There you go.

Because you have to keep up with it. And so I think early on, especially when it was my first company and there was one employee and that was me, it was an individual contributor, right? So the number one thing at that point I brought was just absolute hustle and willing to do whatever needed and put the hours in, et cetera. Then you're bumping into complex problems. My background from law school and management consulting and others, it was probably problem solving was the biggest thing that I brought of. Wow. I could really tear apart these really complex problems, get them down to their component parts and find creative solutions. And that's how created entire business categories, created new products, innovations in it. And then as it gets bigger and bigger to achieve the growth and the scale that we've wanted, that I've always wanted, you have to get out of being an individual contributor. It doesn't matter how smart I am or how hard I work, I can't achieve what I want by myself. And so it all comes to enabling others to be the best they can be and to contribute the best way they can. So it's back to what you talked about before. Hire great people in the first place, then make them even better and give them the opportunity to be even better. And I think at this stage, that's really where it is, is both the recruiting and the enablement.

Yeah, the growth in leadership is a lifetime thing. I mean, you never get to the point where you've maxed out. You're the perfect leader. That never happens. The main reason is because if you're successful, your company will grow and it will be different leadership demands and you cut to adapt to that or the company's going to stagnate. And so how big do you think this thing can be? I mean, give us a vision for what you carry around in your head about how your company can grow and what kind of. When you talk about scaling up and all, what does that mean in your world?

Yeah, I mean, as we touched on before, this is $180 billion industry that has double digit annual growth and it's just getting faster and faster and we solve a problem and fill a niche and are expanding. For me, this is the first step in a lot that we can provide to the same client base. Just having learned about them over the past decade, serving them, starting my own management company. And so, I mean, there are more than 100,000 of these companies globally. They're serving millions and millions of homes. I think the growth looks like creating a platform that provides scale as a service to these local managers and gets more people staying in these vacation homes than already do. So, I mean, I'm not going to put a headcount number on it. I'm not going to cap it by putting an even revenue number on.

It's exhilarating to know that it's that big of an industry and it's expanding. So those, those are the kind of businesses and industries you want to get in that are big and expanding because then you feel like no matter who comes along, there's always going to be room for me to max out.

Right.

And not be limited by the market, you know, not be limited by your industry or your market. So those of y', all, you know, some people need to take a look at the industry they're in, is what I'm saying.

Absolutely. I mean, you could have been the best buggy maker in the world at the end of the 1900 or at the end of the 19th century. But there's very low cap on the size that business was going to be once cars started coming in.

We used to use the example. I started my organization up in Greensboro, North Carolina. That's where we expanded all over the country from. But one of the neighboring towns is Winston Salem. And we used to use example of the biggest business in town in Winston Salem used to be Wilson Wagon Works.

Yeah.

And one day, Mr. Wilson looked out of his big tall building and saw a Model T or Model A come belching and sputtering into town. And when he saw that, that was the end. That was the beginning of the end for Wilson Wagon Works. You know, yeah, great things about the podcast is you can kind of talk about things and everyone knows everything, but they don't know where it applies. But this whole idea of get the right choice right from the beginning, you know, if you want to be successful, you know, get the right investment, you know, get the right employee, get the right industry. But the thing is that if you choose well, there's going to be no limitation on how big you can get. And, you know, you can at least do that, right?

You know.

You know, if you're controlling the things that, you know, if you feel like it's overwhelming, I don't know how to get started. Well, find something you can get excited about that is new and growing and get in with a company or start that company that can be. Can fill that niche or whatever. And that's pretty much what you did. And coming out of a totally different orientation of the legal training, but you were able to evaluate the pros and cons and jump in to the industry that you're still in all these years later. So. Turned out to be a pretty good choice, didn't it?

Yeah, it's been a great ride so far, and hopefully it's just getting started. I think there's still a lot to do here.

And the thing that I'd say to people is, we're always learning. You're always going to have to learn. There's so many areas of life, and if you grow, there's going to be more challenges, even the business side. But if you choose the right industry, you choose the right thing. The core skills you develop in your first year or two will be paying off for you for the rest of your life. And you're just comp. You can just be compounding off of that rather than starting and stopping and starting, stopping. So pay attention to where you put yourself. And if you need to make a. You know, it's like you made a geographic change, and some people need to make geographic changes. You know, the thing that. That I found what's so important about geography is are you fired up living where you live? To me, that's a key to your performance. Are you fired up living where you live? Well, you better move your butt to someplace you can be fired up. Because to succeed, you're going to have to give it everything you've got. You always tell people, I don't know how good you could be, but I know you can't be great if you piddle at it. You're going to have to give it everything you've got. And part of that is being excited about where you live. And maybe you just have to say, well, this is not my dream come true, but for right now, I'm excited about living where I live. You know, we moved up to North Carolina from Atlanta, and I felt like, great place to raise the family, raise the kids, start the business. But when that happened, then I went and got the place in Florida, and then I eventually wound up got a place in Aspen, which is where I am now. So, you know, maybe it's not where you're going to be the rest of your life, but for the period of time that you're. You're in, you got to be excited about that. And I was excited living and working in North Carolina and, you know, just the clouds in the sky, the color of the sky, the, you know, the green trees and all that. You know, I just felt at home, felt energized when I went out there. And so, you know, geography is choose your industry, choose your geography, but get your butt excited. And you want to have a last word on this, Andrew, to pass on to people that, that are coming along the road, either along with you or coming up behind you?

Yeah, absolutely. I mean, just like, I don't think you can fix other people and other people can't fix you. I don't think geography is necessarily going to fix anybody. Right. Like, people in the winter in Michigan think that people in California are going to be so much happier, and then they move there and they're just the same level of happy. And so I think it was that third point that you made of whether it's the industry or the geography, what you have to do is motivate yourself. You need to get excited. None of those other things are going to get you excited. You are the one that's going to have to get you excited. And so you need to do that hard work on yourself to understand what's keeping you from being excited right now and solving that. Stop doing certain things, Start doing other things. Make your day and your life what you want it to be. Because if you're not going to do it, no one else is going to do it for you.

That's exactly right. It doesn't matter what the choice is, what the place is. What matters is your attitude about it. Exactly. Because you're going to need a good attitude to do all of the things you're going to need to do to become as successful as you want to be and to amount to something that's exciting to you. So this has been a lot of fun, Andrew.

Well, thank you so much for having me, Larry.

I wish you the best. And we'll probably check in down the road and see how this business is expanding. See when you know you might be living in Tahiti.

I've never been to French Polynesia. I'd love to get out there. Yeah, let's make that the next date.

All right. Thanks so much, Andrew.

Thanks. Have a great one. Bye.

If you enjoyed what you've heard and are dead serious about finding out for yourself exactly how this works in the real world, I've taken the most valuable business lessons I've learned over 40 years and put them into something for you to watch. Go to Whiteellumwinning.com webinar now in order to move up as fast as possible. I'm Larry Wydell, and I run the Million Dollar Mastermind. Go, go, go.