The 5-Star Co-Host and Hassle Free RE

Hey everybody, welcome to the Booski podcast. This is the podcast that gives hosts the tools, the tactics, the training, but most importantly the confidence that you can go out there and get some direct bookings. So today we are going behind the host with another successful short term rental host in the industry. We've got somebody from the USA Today who is a podcast host, they're a short term rental operator, they educate people in this space and also they're a best selling author in hospitable hosts too. So we going to be diving into all of that stuff so you can pick up some knowledge and some ideas on what they're doing on their business that you can implement into your business. So yeah, let's get into it then. So welcome along Dave Menopace and his company is called the five Star Co host and his podcast is the Hassle Free Re so you can go and check that out. But let's, let's say hello. Welcome along Dave.

Thank you, thank you for having me. It's usually I'm, I'm on your side of the microphone so it's kind of fun to hop on here and share my story with everyone.

This is cool. We're turning, turning the tables on the, on the host today. So we always get started. By yourself if you can introduce what your business is, where it is and anything you'd like to share.

Absolutely, yeah. So the business we have is called the five Star co Host. We're a professional short term rental management company and if you'd like, I can kind of jump into how that all got started.

Yeah, yeah, definitely. So we'd love to know sort of how many units you co host and how, how it all came around, how the hospitality bug got you.

Yeah, absolutely. So to answer that I'll go back to 2019 in the spring of 2019. And just so everyone knows, actually we live in a small town in central Massachusetts and the closest vacation area is Cape Cod, Massachusetts. So we started our journey in 2019 and really it was just to give ourselves a free vacation, buy a house near the beach, enjoy it, get to use it a little bit and make some money. Right. So on the side. So that is how we started in this industry. We then just hung out to that one house, like just that one house. I guess it was kind of a big accomplishment in our early 30s, but we got that home, we got to use it a lot, we rented it out a lot and we got pretty good at operating but it was a little bit before we bought our next house. So from there I really had the itch to try my hand at doing the BRRRR strategy. So for anyone that doesn't know that that's buy, rehab, rent, refinance and repeat, that doesn't work so well in Massachusetts when you only have $100,000. So. Oh, and my wife's one rule was that I couldn't use our savings. So that money, that $100,000 was really in grown equity in our house in Cape Cod. So we ended up doing six BRRRRS down in Chattanooga, Tennessee. How we chose that market is a story for another day. But really everyone was the nicest in that market and I was able to build teams to conduct this strategy.

You mentioned that you've gone from having a summer beach market to being an all year round market. My two questions for that would be what did you find was the major difference and the realizations when you switched from just the summer market and why would you recommend that?

Yeah, well, and this is going to be me putting my investor hat on for a moment. What I've learned is that the beach markets are usually a lot easier because there's a way fewer variables. At least in New England, at least in New England your gross income won't be quite as high, but your list of expenses that follows that top revenue number is a lot lower, A lot less variables. You're really just operating for six to eight months tops and closing it down in the middle of the winter. So even though your top line isn't as high, there are sometimes opportunities to still have really good margins. Just how it's about how much you keep right up in Maine. It's a year round market. So that gross revenue is a lot higher, but you have a lot more variables. So some months I might spend fifteen hundred dollars on plowing, right. And in the summer I'm on a well, I might not have enough water to fill up the hot tub. And you have to deal with that. Right. So that, that's sort of like the lay of the land. What we personally do is we just pick out areas that we want to vacation in. Where do we want to vacation, where do we want to spend time? And that's going to be where we buy the home. And then making sure we can offset the expenses and make some money doing it. The biggest things, right, just like anything is making sure you have a call list, making sure just whatever market you're in, making sure that you have kind of a go to for something and then a backup. It's really going to save you a lot of headache. Down the road. And I learned that when I was doing the burst strategy in, in Tennessee because I couldn't go there to fix problems I really had to rely on on my network.

The other thing you mentioned is you went from doing the burst strategy to owning these two properties and then you got into the co host model. So what did you find was the challenges and the differences when you start doing the co hosting compared to owning your ones direct. And why should people consider that as a potential business model?

I love this question. The when I started co hosting, I kind of thought, all right, big deal, I got to learn the house intimately. And other than that, I'm managing guests. Guests are the easiest part of co hosting. Owners are the hardest part of co hosting. You work really hard to get a deal, meaning a home that you're going to co host for. Right. And there's different things that happen when you're kind of negotiating with an owner. You have your rate, it's to some extent negotiable or as negotiable as you want it to be. And then you have your terms for supporting that rate, whatever they are. And especially like I love helping people get into the co hosting space and that can be its own whole podcast on how to do that. But when you're getting into it, what I didn't realize is that personally I didn't do well giving concessions on both terms and rates for my services. It just left me unhappy and burned out. And so what ended up happening, to be honest with you, is we had to go a different direction. We had to part ways with several of our initial co host clients because we were just unhappy. And at some point you realize no amount of money is worth it to be really unhappy or to feel that sort of emotional pain. And we almost shut it down at one point. It was not that long ago that we are so unhappy. We almost said what's, what's the point of it? Luckily we got ourselves into a mastermind and learned how to rebuild the company and it's a lot more successful now. But what I would urge people to do is to really think about your, your why in. In co hosting now for us. And this goes to your, your second question there. We really want to build up a more consistent and reliable income stream and we figured we would do that through co hosting because as a realtor, I'm only getting paid with each transaction. And part of the reason too that we've decided to go this route rather than long term rental property manager or even buying property. Man, I'm sorry. Buying long term rentals anymore is. I will say that the vacation industry for me has always just been a lot of fun. I find people are just cooler. Like cooler stuff happens when you're on vacation than when you're living your day to day. So whether it's people getting engaged at our house or getting a professional photographer to, you know, there for family photos, or just being there every week, the same week, every summer or winter, it's neat. It's neat and it's really fun when guests reach out and thank you for just providing your home to them. So that's kind of like what keeps us in this space. And being able to make money off of it is fantastic. It really is. It's amazing.

How is having the short term rentals changed life in general? So what did life look like when you had the W2 job and compared to now? How is. How has things changed?

It goes in waves. I will say that because I've had a bit of a journey here where I thought I was happy in my W2, but secretly I was just working 24 hours a day, not only on the W2, but on real estate. Right. A lot happens when you burst six houses in a year. There's a lot of pain involved in that. And I just wasn't around for anything. Like sure, I was physically at the house, but I wasn't emotionally or mentally there for my kids or my wife. And that took a lot of hard reflection. It really and truly did. And then I'll tell you what, so we did some planning, we did some financial planning. I walked away from that industry. But it wasn't just like all of a sudden my life was amazing. It wasn't. What actually ended up happening was, is I learned I was really bad at managing myself. I was good at managing other people and teams. I was really bad at managing myself. So what I'd do is I'd go out and I'd just have coffee with people or lunch with people or dinner with people and I'd talk about real estate all day and I'd come home and say I did real estate. And now tonight I'm actually going to work on the things that I had to have gotten done today. And I was in this cycle of now, now I'm actually making almost no money and I'm working 10 times more. And that sort of feeds into the co hosting business where it is a lot more stable, a lot more predictable. And you can, if you're good at managing your time, you can find a lot of success. So I'll be honest with you. It was only recently, maybe within the last month or so, that I had to really reevaluate how I was spending my time. But now I'm there to bring my kids to gym class. I'm there to cook dinner. I'm there. I'm, like, physically and mentally there, too. Right. Kim and I can have wine at night, and we can actually enjoy talking about our business and what we want to implement the next week. Like direct booking, by the way. And we can get into that later. But that has been fun to do.

Having a blast? Gonna get it on the Bruce Lee podcast? Bruce Lee? Like Bruce Lee? Cause it's so hard? And the tea is loose leaf? Making up those rhymes? Don't write it, just do it loosely?