Turn Your Students Into Partners and Win Big With Arbitrage, With Jerry Conti.

The idea being anytime that you're looking to do anything, find somebody that's already aggregated the thing you want and go there first because you'll have it at scale instantly instead of having to do it onesie twosie yourself.

You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Welcome to the show. And today we're finally airing an episode with Jerry Conti. He's a serial entrepreneur who managed to humanitarian and world class connector. He's the co founder and managing partner of Lux Home Pro and now boom Str. Jerry is inspired to transform the lives of those around him by adding value and connections. And like many of our guests, he's all about strategic partnerships. This episode was actually recorded in Mexico at War Room before things turned upside down in 2020. So listen for insights and takeaways and that absolutely still hold true.

Hey everybody, Roland Frazier here with the Business Lunch podcast and we are coming live from Punta Mit de Mexico at the Four Seasons resort. And my guest today is Jerry Conti, who is the co founder, which is also the same as a founder of Lux Home and Lux Home Pro and also the CEO. Jerry, welcome to the show.

Thank you for having me here. Yeah.

So tell us a little bit about what Lux Home Pro is and where it's come from too.

Yeah, for sure. So Lux Home Pro started in April of 2018 with an idea to take a luxury property, typically a real estate property, somewhere in between, I would say $800,000 to $1.6 million is a sweet spot for us. Take a residential home in a legal area to do short term rentals and be able to arbitrage it, you know, be able to lease it.

And for those of us that don't know what arbitrage is, what does that mean?

It means being able to take an asset that you don't own and actually rent it out, make money from it.

So basically have the asset cost you less than it cost you to less than you can receive from.

That's a great way of explaining that.

Buy low, sell high. Okay, love that. So now that sounds expensive. So you have, you have to go out and buy lots of multimillion dollar luxury homes.

No, actually we lease them.

Okay.

So. So my partner and I, we had a particular property that generated and kicked off about $180,000 in profit off of one property. And I saw that idea and I thought we should.

Were you leasing the property?

We're leasing the property, yeah.

So give us the full story.

$5,200 a month was the lease for the long term if I was to rent it for a year. But when we went to the homeowner and said, hey, we want to lease it out for the short term rental business, she got excited, we got excited and we ended up giving her 6,000.

So you were, oh, okay. So you said, basically, I'm gonna do this. I'm going to rent your home for a year for 5,000 at the time. And then you talked back and forth with her and said, our plan is we're going to lease it out to other people. And then did you say, did you have to give the extra money to get her to kind of say, yeah, that's.

No, not at all. We just offered it.

Okay.

Because she knew that we were going to make money with the property and she knew that people would come in and out of the property and, you know, we're going to use Airbnb.

Made her feel better about it.

Yeah, of course, 100%. And we also ensured her that we were going to take care of the property really, really well. More so than a long term renter would. Right. And you know, in her benefit, it's better to actually rent your house on a short term level because in the event that the renter doesn't pay, you know, you have nothing really to fall back on. And it may take you a month or two, three, four months to even kick them out if they don't pay. You know, the laws are in favor for the long term tenant.

Right.

Whereas in our sense, if somebody doesn't, you know, if they want to stay longer than their booked amount of time, we call the sheriff and they come out the same day. Right, right. And there's also a set of rules. Yeah. And there's money behind it. To know that she was always going to get a rent payment because we were making money and selling it out, you know, three days at a time or a week at a time and so forth.

So I absolutely love this concept. Do you know Brian Page?

Yeah, of course.

Part of War Room, who has a course on doing that. So my son, who's sitting here as my co producer, listened to that interview and I was very excited about it and thought about it, but I think also had had just a little bit of momentum or inertia to overcome and getting it in finding the people who are willing to do it. How do you find somebody that's willing to do that? Like you? You found this lady and sounds like it just was. Was pretty easy. Was.

Yeah.

Was that like a search and conversations with A few dozen people or the first person you talk to or what?

No, of course you're always looking for the perfect properties that you know, fit the mold of what you're looking for. You know, it can't be too expensive of a property because you know, the cap rate doesn't work out based on what you're paying and what you're making on the property. So you have to be smart in what you're doing. And no, we've, we had to dial for dollars. You know, you're calling, you know, homeowners that want to lease their property and.

You do it mostly telephone.

We did and, but we never did a deal over the telephone. It's always an in person. We have to evaluate the house.

But the lead gen is like you'll reach out and make X number of.

Calls initially, but it's a one on one meeting with the homeowner because you have to look at the property too. You need to do a site inspection to make sure you can fit enough beds in there to make it worth it.

Did you say heads and beds?

Heads and beds. I love that. Yeah.

Is the statistic. So, okay, so let's talk about that a little and then I want to talk about your business, but I like for people to understand the underlying before they find out about yours. So how many people do you have to. Well, let's do it this way. How do you find the people to call in the first place?

So we have bird dogs out there, real estate individuals that are looking for opportunities for us. So we have people out there doing that. Plus we could pick up and just go on the MLS and find, you know, find properties for rent or find properties for purchase and have a conversation, a deeper conversation. If the house has been on the market for over 15 months, they're probably hurting in some way. They want to sell the house. Yeah, it's, you know, it's been on the market for 50 or longer. Yeah. It's burning a hole in their pocket. They know it. In many cases these homes are already furnished, which is an advantage for us. Yeah. And so we have an ability to call them and say, hey look, have you ever considered another opportunity? Now if it's listed with a realtor, we go through the realtor. That's the right thing to do. You know, go do the, go through the realtor and make sure that they understand the concepts. In many cases.

So you're telling the realtor that this.

Is the, this is an alternative for your customer.

Okay.

To sell their home.

That's pretty Cool. Do you get real estate agents, then, that are sending multiple people once they find out you can do this?

Exactly.

How do they get paid?

Well, good question on that because, you know, of course, every home that we try to get an option on the home to purchase a home after our term. So in many cases, we're trying to get 20 months as a lease, depending on the area of the home, because there's a season, and we're always trying to pick up two high seasons in the market. So we try to lock that in with an option to go another year and another year and another year. Because if this is a winner and it's turning some decent profits, we want to do it over and over again. We don't want to give up the property, but in many cases, they really want to sell the property. And so we want that option to purchase that property at a set price at the time of negotiations. If we lock in the option price on the home, then we have so many more choices in the future of how we handle that situation. Right. And once that sale is made, the realtor gets paid. So it may be 12 months down the road, it may be 15 months down the road. And the reason for that is because.

Our investor, there's no upfront bonus or bounty or anything for them until the house gets sold.

We do give a fee, like anywhere between a $2,500 or $5,000 fee.

Okay, great.

Which.

Yeah, you know, which is something.

It's something. It's nowhere near, you know, a 3%.

Another 15 months with nothing.

Exactly.

Yeah, correct. Okay, But.

But at the end of that term, if we can bring an investor in, purchase a house and lease it back, they'll get the sale at that time. So we certainly want to honor that relationship.

And you get an option, you get options to. Or you try to get options to extend, plus an option to purchase.

Yes, that's correct.

How many?

It doesn't always happen.

Yeah, of course.

But. But we should. Yeah. No harm in asking what.

Ideally, what is. What is it that you're looking for, like two rene and a option to purchase or what?

Typically, we want the option, you know, that's, you know, on the option to buy. Yeah.

And then at the price that it was listed at.

Yeah, well, yeah, we usually just go in at full price. We don't try to negotiate that at all because the market's going to determine if it's. If it's at that value when we're ready to buy it anyway. So, yeah, we don't want to offend anyone.

You can always negotiate then as well, right? Well, I'd exercise my option, but I need it to be 30,000 less.

Yeah, exactly. Well, I mean, the bottom line is that the market's going to dict and if I get into that negotiation back and forth in the beginning, you'll try. You know, some homeowners will, you know, think they're losing trust in you. You don't want to clog up the deal.

Yeah, no, it's actually kind of cool because if they figure also that maybe you'll buy it at full price, there's no negotiating.

Exactly. And in many cases, like, we have an option right now that we're trying to exercise where the house is under option for 875,000. That's our option. It's worth 950 right now. Just 12 months down the road. Yeah. So that's a great option.

You're locking in. Yeah, exactly. You're good. If the price goes up, you got a deal. If it goes down, you're not out.

Anything but part two to your question. You asked me, what is the option on the rent on the lease? Right. So we always try to get two seasons and typically they don't want to go longer with you because they don't know you yet. But we always have in the contract that we can do at least another year or more. So in some of my properties, I actually have a one year with it for your extension, which is an ideal situation if it works a year at a time. That's correct.

That's correct.

Which I get to kick out if it's not working for me and the homeowner, if they don't like me and I'm not taking care of the property like I should be, and I'm not, you know, because that's what they're concerned about. They don't care how much money I make off the property. They care how I take care of the property. And they're going to come in and inspect whenever they feel like they want to inspect. So they have the right to kick me out. So it's a win. Win.

Okay, that's cool. So now, as far as you told me, all kinds of cool things that you do that make this safe for the homeowner. And I just can't get those out of my head right now. So will you share some of those things, like the noise level thing?

Yeah, absolutely. I think. You know what we.

So this is just so I can pre frame it for everybody that's listening. So I asked Jerry this morning I said, well, how if I have a house? Because I have a house, Right. I got an extra house in our neighborhood. I'd love to do something with it, but I'm like, I don't want people tearing it up and all that kind of stuff. And you told me all these cool things that you do.

Yeah. So we focus in the luxury space in really nice areas. Right. So in luxury real estate, the clientele, just by the fact that it's 700 to 15 hundred dollars a night rental, is going to qualify that person more typically, more than some, if you're in a smaller home in a, in a different remote location. Right. Not in more of a luxury location. So I have a little bit of an advantage there to make sure I've got good customers coming in, renting the houses. In addition to that, we bring them through a process which allows us to do background checks on them, get their driver's license, know a little bit about them, do a little research on who the customer is coming into the house. Because we want to know exactly why they're there and what they're planning on doing on their vacation. You know, we want to not only get, for the purposes of giving them an ultimate experience. Right. Because we care about that.

Right.

We. If you're coming there because it's a small wedding or it's a birthday or it's a vacation, or for whatever reason they're coming to rent a home, we want to know that. But we also want to remind them of our policy. We have a no party policy if they want to have a party. In many cases, we may need to get a permit from the city to have a party. Right. So we need that. So we fill out what we call a renter data form and it's all brought through our proprietary software which allows this process to happen very quickly so that we can spot a fraud. Right. We can spot, you know, young kids wanting to come in and trash my home. Right, right. It rarely happens. I know in the world of Airbnb and VRBO and home sharing and, you know, short term rentals, homeowners who don't like the concept have a tendency to amplify that or magnify that situation when it occurs.

They don't have ips though. They don't have the rdf, the rental data.

Right, exactly. They don't have that. They don't know about that. Right. So in addition to that, if somebody's local and they want to rent their house, it's really likely that we will do that.

Okay.

Yeah.

So You've got that initial screening and then you have all kinds of other cool things.

Yeah, there's some great gadgets out there. You know, the industry is really growing and it's expanding. And so Noise Aware is a great company. They actually allow you to put noise sensors throughout the house or where typically a party would belong. You know, you don't have to put them in every room, but all it does is measure the decimal of the volume that's going on in the house. If it reaches it, it just pings you on your phone. And I can call them and say, hey, man, you guys are getting a little loud there. Before they call the cops or before the neighbor calls the cops or something gets out of hand. And so we just kind of put it in that perspective. In addition to that, we always have a camera on two parts of the house. You can't have cameras in the backyard of the house or anywhere in the house. But on the front door we can have a camera. And over by the garage door, looking at the garbage to make sure that take out the garbage when they're supposed to. Right. So. And I can operate that from my cell phone.

And then your managers just kind of ring, hey, you know, you forgot to.

Take the garbage out. Yeah, you forgot to take the garbage out.

It's really funny.

It's really cool. So we have eyes and ears everywhere, really, to protect the neighborhood, to protect the people that live next door. I mean, that's what it's all about.

And then you're just listing them on Airbnb. So there's not really any additional marketing besides that.

No. So we have Airbnb and we have VRBO. That's gonna represent about 80% of your revenue on any particular property. They're very well suited platforms for what we're doing. However, we have created a channel manager, which is really cool. And the channel manager basically is an API that takes those listings and pushes it out to 50 more sites.

Indicator.

Yeah, it's a syndicate.

I was trying to think there was a service that did that before, that did like 24 or something, is that you're APIing into one of those.

Yeah, we're API into our own proprietary channel manager, which is wonderful because, you know, our strategic partners, we wrote the code and it just takes that listing and populates it on other sites.

And we forget where the other 20%.

20% comes from that.

Yeah, that's pretty significant.

That 20% is pure profit in your pocket. Yeah, it's pure profit. People don't realize how valuable that is. But for the operator or the host who's running this type of business, they don't want to focus on that. You want to focus on mastering your Airbnb and VRBO page. That's the key to the business.

So this is a really cool business. Obviously you did it on the one property. You said, gosh, this would be cool, we should do it on more. And then you said, we should do it on a lot more. And then you decided we should turn this into a business where we help.

People do this 100%.

And that's how the information business.

That's correct.

Which has also evolved into kind of a done with you business, Correct?

That's exactly right.

Would you share a little bit about how that works?

Sure. So. So when I realized what this was all about, I wanted to share it right away.

And I love it because it's every great entrepreneurial story that, like, I did this thing and it was cool and then I wanted to scale it and then I did it. Then I figured. And now you're in like this one business, Right?

Well, I believe in partnerships. Right. I think War Room is a great partnership. Right. I've been a member for two years. It's a great partnership because I get what I need and I try to give to the community, you know, it's that kind of thing.

So just don't sell your membership out so that each of the four meetings somebody's coming to and paying more than it would cost to be a member. I could see you doing. Don't you do that.

So I have been for the last 10 years. I've been promoting some extraordinary individuals in the personal development and business space for a long time. And I had a lot of skill sets about producing boot camps and live events. Yeah. And so I immediately put one together for this. And it was really, to my surprise on how many people were actually interested in this in the conversation. So we just tested it, you know, and we put a little three day event together at the W Hotel in Scottsdale. And we had about 25 people to attend the event. And it was just unbelievable.

What was the promise?

The promise was that you're going to learn how to locate a property, how to negotiate the terms of a lease with a homeowner, how you can set up the property, like making it set up for five star reviews. There's a science behind that, by the way, and how to market it on these Airbnb and VRBO sites.

And how much did you charge?

We charged $2,500 to come to the event, if they brought a guest, it was like 3,000.

And you had how many people?

25.

Great.

That's awesome. Fantastic.

You got a decent amount of money that came in for doing that.

It was a wonderful event. And now we're on our 12th event.

That's pretty cool.

That's pretty cool.

So you got roughly, you probably. I'm guessing 12,5 in expenses. So you probably made $60,000 on that first event.

Yeah, you know. You know, we offered opportunities for coaching and services on the back end of.

It before the upsell.

Yeah, yeah. It was something like, so you went.

You go in profitable, you're helping people, giving them this tremendously valuable thing that will show them how to make money and do these cool things with these. With these. And then you said, we'll also help you through if you want. You did an upsell.

100%.

Okay. And then. And then. So that kind of kicked along for about how long?

About 18 months.

About 18 months. And then you ran into a little bit of a challenge in terms of finding people or something.

No, we were talking about.

Right.

No. Basically, what I recognized is that what if I could not just teach somebody how to fish, but maybe fish with them? Right. Okay. Right. Like, let's put the rods in the water together. And. And that was an idea that came out of, you know, doing this for a long time. Like, how can we speed this up for our students? Like, and so I thought, hey, we. We have the brand. We're Lux Home Pro and Lux Home Pro Holdings. I said, what if we went out there, since we're really the experts here, and let's go and acquire properties so that I can partner with my students. Right. It was a great idea.

Yeah.

So that idea was put into action in October of 2019, the last quarter.

Great.

And we now have 22 homes and 22 partners.

Now, I was trying to think of when we. Was it maybe before that, that you and I were talking at the board of advisors mastermind, and you were saying you were going to invest, you needed to build a fund, or it was either there or at the intensive that I do.

Absolutely was at your int.

So. So you had come and said at the time, like, initially you were. You were saying, we need to do a fund because we need to buy these properties. And then we talked about, maybe there's another way to do that faster. And you came up with, let's. What if I partner right. With these people?

Well, what was really interesting, and I'm going to plug you for a little bit here because this was really important when I went to the grow growth scale and exit your leverage.

Exit growth.

Oh, leverage. Okay. Yeah. All right. When I went to that seminar, I actually thought I was a little premature, to be honest with you. I didn't know if I was really able to sit at that table with you guys, because I wasn't really there yet. You know what I mean? Like, I'm like, what am I talking about? Exiting my business? I'm just trying to get it off the ground. But there's leverage.

Exit, and.

I know, I know. So I figured I'd get some value out of it. And it wasn't intensive. It was a benefit to the war room membership. So I said, let me just take advantage of it. And to my surprise, it was perfect for me. Yeah, it was absolutely perfect. We had just did $2 million in sales in our business, and I thought, do I really need to go to this time is of essence. And it was perfect. Everything you taught there was so needed for me personally and professionally. And so I asked you, and Jay Abraham was there, and I got to spend some time with Jay. I wanted to do a fund. You know, the quickest path to success is raise some capital and go do it.

And you're good at that. You've done great jobs.

I'm great at that. Yeah. So I was just thinking, hey, that could be a good thing. But you kind of told me that for 3 million you said that. I remember your words perfectly. It was like, for 3 million, you're gonna spend about 150 just to manage it. A year, 100 and a half to manage it. I was like, wow, that's a lot of money to manage it. I wasn't thinking about that. And then all of a sudden, you were like, well, what if you just found one investor that has some money that wants to do a deal, and then you do another deal, and then you do another deal, and you build it that way instead of going down the path of raising all this capital and dealing with all that minutia. I loved it. I absolutely loved the idea. I meditated on it. I was like, okay, how do we do this? Where am I going to find these individual investors? And I said, well, why don't I just go to my students?

I've already got them, right? Yeah, it's really crazy.

It was awesome. So we picked up our first block of properties, was 15 properties. And I invited my students to come in and operate them a partnership relationship with our company, which is great.

And you do that now. So it's like, done with you things so we don't have to deal with all the hassles. And what are they doing? Are they. They're operating it.

They're customizing.

They are operating.

They're operating the homes.

So you set it all up for them. You're like, I'll go get the lease for you. I'll put it all together. I'll do the heads and beds. I'll get all the stuff set up. And then your responsibility at that point is you do the listings and manage them and deal with the people, sort of. Okay.

They're doing it with me every step of the way because we want them to learn, but, yeah, we're leading that charge.

Okay, great.

But we want them to do it. We're buying the furniture together. Like, I'm helping them with that. Right. We're coming in with our design team that knows how to set this up. And so they're watching our design team do it. Because our goal is not to just get one home. Like, if you were to buy a franchise, a Subway, massage, envy, anything, you wouldn't buy one. In fact, they wouldn't even qualify you for one. If you went into them and you said, hey, I want to buy a Subway, they would look at your financial records. They would qualify you for at least three, because they know you're not going to make it on one. And so our goal is at least, you know, our students want 10, you know, 3, 10, 5. They want to manage multiple ones. So if they see me do the first one with them, they can just go do it on their own after.

Nice.

Yeah. And if they want to still partner with us, they're more than welcome to do that as well.

Okay. And then. And how does that work? So just kind of looking at cost, benefits. What do you guys charge. Charge for that? And how does. How does. So let's say I want to do it. Right? Sounds good. I'd like to do it.

So we have different levels of membership. We have masterminds that we put people in based on their goals, basically on their goals and of course, their financial.

But let's say I just want to do a house. I want to do a house.

So typically, a house costs $50,000 to configure. In some cases, if it's a really, really big house, it can cost a lot more. Okay. Because about 15% of our homes already have furniture in the house or some furniture in the house. 85% of them have zero furniture. So we've got to go out there and buy the Furniture.

So what percentage of the cost? How does that fit?

Yeah, that's about 30 grand.

Okay.

Right there. And that's everything from beds, sheets, linens, everything you need. Because I just placed an order for 19 beds for one of our homes. So it's all of that plus the living room furniture. The nice thing about vacation rentals is, you know what I mean, you don't need a lot of clutter. It's just very chic design, very simple formats, and you keep it clean, so it's easy for cleaning crews to come in and. And come out quickly, you know, so the 30s.

Furniture.

Furniture. And then you need the first month in the last month security deposit. And what is that on the lease, typically on a house? Our houses are around 7, 500amonth.

Oh, that's pretty expensive.

Yeah. 7, 500 down. 7, 500 in. In reserve. Okay.

And then five for you guys for kind of. Yeah, yeah, that's great. Okay.

Yeah, it's Super. Exactly.

Yeah. 10%, basically.

Right? Absolutely.

Okay.

So we typically don't do deals outside of our student body. So we do charge for the coaching. Okay, yeah. So they come to the boot camp and they learn all about that.

Okay, and then. And the boot camp's the $3,000 thing?

Yes, that's correct.

Okay, and then the. How does it work after that? So now you're paying 7,500amonth to rent that house? Yes, on that kind of deal, I.

Sublease it to them.

To the student.

To the student.

Okay, that's correct.

We have a little markup between our lease and their lease.

Okay, fair enough. So give me the example on that. Let's say that it was that deal. We spent 30 to furnish it. Your lease is at 7,500.

We would charge the student 8,500.

Okay. So you're picking up $1,000 a month for the trip for all the hassle.

Yeah. Plus we have an office in Scottsdale that has a support system that's already tied in to everything they need. We also have a fee for the back office services. So we take 4% of gross revenues on the property.

So now, as the investor in that deal, the person, the student, let's say, what. What would I expect to get in that on average?

Perfect. Great question. So obviously it's going to be based on how you operate the rental. You have to be good, follow all.

Of your instructions exactly.

Typically, you're looking at. On our homes, you're looking at roughly anywhere from the very low. If you're not a very Good operator to about 60 grand in profit on a, on, on a typical property per year.

Okay.

And or up is in upwards of 150 or more if you're a great operator. Okay. Right. And it all depends on your.

So did you say profit of or. You said that's cash return profit. Okay. So If I put 50 up.

Yeah.

Then I'm probably going to get 110 back during year one.

Okay, that's correct. That's on the low end.

Okay. That's pretty awesome.

No, it is.

And maybe I make 100 on my 50.

Yeah.

I get 200 return.

Right. But you, you are handling customer relations, so you have to like people to do this business. You know, there is a, you know, I know a lot of.

If I hate people and I hate.

Work, it's probably not the right opportunity.

50 grand and say pay me back.

That's a different, That's a different type of deal.

Do you do something like that?

Well, we haven't thought of that one. But what we'll do is we'll partner with them and we'll take half the profits.

Okay.

So you put up the money. You put up all the money and we'll run the property for you and because I'd probably give you half the.

Property, I'd probably give you 50 grand to get. You said 60. So let's say if I give you 50 grand and I got my 50 back plus 30 and you kept the other 30, I'd be pretty excited.

Yeah, you would be.

Right?

Yeah. You would be. Yeah, it's exciting. And, you know, in the event, we split profits, but we also split risk in that deal.

Yeah.

Yeah.

Okay.

So you have a high season, a low season, but there's zero risk. There's zero risk.

We're kidding. Don't, don't. That's. That's a joke. Okay, so cool. Well, it sounds like a great business. So now tell me what, what are you doing to scale up from there?

That's great. Question. You know, right now, this is because.

You'Re in Scottsdale only, right?

Yeah, yeah, I'm in SCOTTSD right now. We, our students have just taken our wisdom and our knowledge and, you know, because of their backgrounds in real estate and stuff and flipping homes and stuff, wholesaling, they've been able to go out and do their own thing, you know, without our help. And that's great. We encourage that. You know, if you can learn from our boot camp, come to the boot camp, learn it, and go do it on your own, then go for it. You Know what I mean? That's it. And you know, our student body has now dozens of homes in all markets throughout the United States. So it's very exciting on that side of it, too. Yeah. So for us though, we have a nice infrastructure in Scottsdale and Arizona. We like that market a lot. But we have our eyes on a couple other markets right now. Yeah, yeah. Which is really good to expand that way. But we're also getting into hosting as well, co hosting, which is half of property management. So property.

What does hosting mean?

Yeah, hosting means where you're running the vacation rental and the marketing and the customer relations. You're doing everything except the house. You're not taking care of, you know, the water heater that breaks or the roof that leaks.

And that would actually be the owner. That would be their responsibility.

Yeah. Well, in our situation in the short term rental, we want a triple net lease, meaning we are taking care of everything. I mean, unless it's an insurance claim incident, it's basically on us.

Oh, okay.

Yeah. We bother the homeowner very, very little.

Okay.

I mean, in unique situations, like I said, if it's a structural issue or an insurance claim type issue, then that's different. But if the refrigerator goes, the dishwasher grows, the pool heat shuts off the pool pump, you handle it cancels. We handle everything we have to pay for it.

And that's why you've got an office there in Scottsdale.

Yes, that's correct.

Yeah. And so as you expand, you'll want to have. We'll have boots on the ground.

Some boots on the ground, yeah. But we're really moving toward co hosting, which is really exciting. Part of our business right now where we could. We are really good. We're like the digital marketers of the short term rental space. I like it. And you know the lab, the scientific lab on how to get your. How to understand the algorithms of Airbnb and VRBO and then play toward those algorithms so that the property floats the top of it. It's no different than Amazon. Right. If you understand Amazon's algorithm, you can get your products to the top of Amazon. Absolutely right. Absolutely. Same concept.

Yeah.

So we want to focus on what we're the best at. I don't really want to be a property management company in a traditional sense where I've got to go send handyman and cruise out to fix things. I really want to stay on the marketing side and the co hosting side of the business, which is our future.

I think it definitely is now. One of the other Things that you and I talked about when we were talking about the scaling was finding partners. And I remember, like, rather than raising a fund, find partners that already have the houses. And so I had suggested banks, real estate and whatnot. And you actually found a property management company.

Yes, that's right.

That had them. Will you share a little bit about that?

Yeah, absolutely.

So the idea being anytime that you're looking to do anything, find somebody that's already aggregated the thing you want and go there first because you'll have it at scale instantly instead of having to do it one or onesie twosie yourself. Right.

100%. And so this was a unique relationship that we have found in the Scottsdale area. It was a number two property management company there. And to, you know, to our surprise, he was trying to exit the business. He saw what Airbnb and VRBO were doing and since he spent 20 years in the space, you know, really understanding the space, he decided that he wanted to get out of property management and get into, get into transactional business like theirs, you know, where you're just booking the, the homes, you know, putting customers in those homes and getting a percentage of that. And so that was really smart for him. But at the same time, I needed properties to support my students. Right. It's kind of like an apprentice program in a sense. They get to come in and try it with us and they don't have to fail. Like if they're going to fail, they're not going to fail too far because we're right there with them. We create like this unique safety net.

Yes.

It's really never been done before. That's really, you know, I don't think you can go into, I don't know, maybe you can go into a subway and say, I'm going to try this subway out for six months and if it doesn't work, I'll give it back.

I'm sure I have a trial permit.

Exactly. So that makes us unique.

So what did you do with him?

Yeah, so what we did is we saw that he had an offer on the table for one of the largest property management companies, Vacasa. They have about 14,000 properties and they wanted to buy his whole enterprise for $1.5 million as a buyout for approximately 15 homes. And so I went to him and I told him what I wanted to do, which was to, and we consulted on it, was to bring the charm back in the short term rental business. Because this industry started a long time ago. People have been home sharing for a long, long Time. And it was a very romantic industry at one time, very charming industry. And because of Airbnb and vrbo, it scaled it to a point where that, that went away. And that unique relationship between the host and the guest, or what I would call the traveler, is not there anymore in those big property management companies. So what we wanted to do is bring that back. And when I shared that and we talked about that, he was like, I'm not going to go at Vacasa. I'm going to go at Luxone Pro, which was really sweet, right, Because I kind of felt that that's what he wanted and that's what we tried to bring back. And so that's what we're doing right now. We have a beautiful operator, a traveler. The relationship is so nice between them. There's somebody you can talk about.

And so you effectively picked up 15 homes.

15 homes right away. Swoop.

Done.

Yeah, done.

That's what, to me, that's just magic, right?

That's magic right there.

So is that kind of part of the growth plan to be able to scale faster, maybe find more?

Yeah, we're absolutely looking into that right now. Like I said, I think the focus for our company in 2020 and beyond is marketing, because we're good at that. And I like to stay in the lane of what you're good at.

I love it.

And, you know, I learned so much from War Room and what you guys do, because it's. It's all about that. It's. It's about traffic and conversion. I mean, at the end of the day, that's all we do.

It really is.

How do you get more heads and beds in the. In the short term rental space? How do you get more butts and seats in the seminars? Yeah, right.

It is.

It's the same thing. And so it's just a matter of understanding marketing and. And most. There's 600,000 vacation rentals in the United States, and most of those operators and homeowners have no clue of what they're doing.

And you're not even looking at that limited market, though. There's no. It's a worldwide market. Yeah, exactly.

It's a worldwide market. But I can scale the marketing because I can do it from anywhere. I can be in Scottsdale and market your home in London. There's no geographic barrier.

That's pretty good.

Whereas for property management, there is. You gotta have boots on the ground and you have to a. It's a. It's a tougher business. I'm not saying it's Not a good business. It is a good business.

Tough though.

Yeah.

Low margin.

Yeah, yeah, yeah, yeah.

That's awesome. Well, so for everybody that would like to find out how to get a hold of you and find out more about what you do and doing this wonderful business, what, what is the best way for them to reach you?

The best way to reach me is to go to my website, which is www.

Luxhomepro.com and Lux is L U X.

L U X H O m. Beyond that, Piero.com.

Awesome. And what about any other podcasts or websites or social media or anything?

We're actually just about to start our podcast.

Fantastic.

It's coming up.

It'll probably be live when people listen to this.

Yeah.

What will the name of it be?

You know, we're working on that.

Okay.

All right, I'll tell you in. In real short order here.

I love it.

Yeah, we're just in the show. Notes. Yeah.

Okay. Fantastic. Thank you so much, Jerry, for being here.

Thank you.

Appreciate you sharing.

So appreciate it.

Thank you.

Awesome.

You've been listening to Business Lunch with Roland Fraser. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

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