Inventory Acquisition Strategies with Brooke Pfautz (Ep570)

In this episode of Get Paid for Your Pad, Brooke Pfautz and I delved into effective strategies for driving action and engagement in the vacation rental industry. One crucial aspect we discussed was the significance of a well-designed landing page. Brooke emphasized the importance of creating an appealing virtual storefront by showcasing high-quality images that highlight the properties and brand.

We explored the seven key messaging building blocks that should be incorporated into marketing efforts for new owners. These building blocks include the unique selling proposition (USP), highlighting features and benefits, leveraging trust icons, utilizing social proof through testimonials, creating a compelling offer, implementing clear call-to-action (CTA) elements, and incorporating risk reversals to reduce friction in the buying process.

Networking, attending conferences, and fostering relationships with local competitors were also key topics of discussion. Brooke emphasized the value of connecting with industry peers, participating in masterminds, and viewing local competitors as potential allies rather than adversaries.

During our conversation, Brooke mentioned his upcoming book that addresses the top 10 mistakes made by vacation rental managers. Notably, all proceeds from the book will go towards supporting vacation rental advocacy efforts.
To learn more and connect with Brooke Pfautz, you can visit his website at
https://vintory.com/ or reach out to him on LinkedIn LinkedIn. For those interested in reserving a copy of his upcoming book or purchasing it upon release, they can visit https://vintory.com/mistakes/

Jasper Ribbers:
What's up everybody? Welcome back to Get Paid for Your Pad. Today we're talking about business acquisition, inventory acquisition, and who better to talk to than the world's biggest expert on this topic, Mr. Broek Fouts. Broek, welcome to the show.

Brooke Pfautz:
Jasper, thanks man, appreciate being here.

Jasper Ribbers:
I'm sure we probably don't have to introduce you because I'm sure most people already know you, but why don't you give us a quick introduction.

Brooke Pfautz:
Yeah. So I've just been in the short-term vacation rental space since 2007, launched a company called Vantage Resort Realty in Ocean City, Maryland. Grew that company from zero to 500 properties in five years, sold it in 2013 and had various other leadership roles within the short-term rental space. Most of it around inventory acquisition, growing more properties. And then about four years ago, I launched a company called Ventory. And Ventory is the first and only sales and marketing platform that helps helps you get more inventory, more properties in your rental program.

Jasper Ribbers:
Awesome. Well, I'm excited to dive into this is a question that comes up quite a lot from listeners is how do we get more units? How do we get more management clients? Right now, I know there's a whole, you have a whole process and there's, you know, we could talk about this for three hours.

Brooke Pfautz:
Mm-hmm.

Jasper Ribbers:
But you know, what's, you know, for those, for those out there who want to get some more management clients, like what is like the first step for them to take?

Brooke Pfautz:
Man, there's a whole system obviously that we built that does this and it's pretty in depth. I mean, we've got 50 people on our team that help do this. It's one part data, it's one part technology, and then obviously one part marketing. But I mean, the first place that we always recommend you go is if you wanna build an outbound channel, is it really starts with data. 50% of all marketing really just comes down to your list. So, where do you go out and get that data? There's a couple different sources. One is going out there. The quickest, easiest way to do it is just go to a list broker. There's a million different list brokers out there. There's InfoUSA, there's Exact Data, there's Melissa Data. Again, there's tons of them out there. Just Google it. But a couple things you wanna look for when you are getting the data is you're looking for absentee records typically. Absentee owner records are where the property address and the owner's address are different, which is usually a good indicator of a real estate investor. And then the second thing you wanna look for when you kind of look at some of these list brokers is make sure they have the ability to do appending services or you find another third party service that can do those appending services. And what that means is you can give them their property address or their mailing address where they live and where they reside, and then they can do kind of a reverse append to get their emails and phones and contact information. So that's really the baseline right there. I mean, there's tons of other places you can go to get data. You can scrape the OTAs, you can scrape Airbnb, Verbo, Booking.com. You can scrape your competitors. You can scrape your competitors that were just purchased by some of these large venture backed companies. Um, you know, but you can get the case rental permit data, which is another great source, but typically the quickest, easiest, best place to start is just go out there and get a list broker to get some, some data and, uh, kind of identify your, your ICP, your ideal customer profile.

Jasper Ribbers:
When you say data, what kind of data can you get from these lists?

Brooke Pfautz:
Yeah, I mean, it depends on the specific city. But I mean, sometimes you can get pretty amazing data. Like if you start just from a list broker, you can get house value. You can get if it has a pool, you can get, you know, square footage, get how many bedrooms, how many bathrooms. And that's typically the basics. But when you start, you know, getting into some more additional information. So if you go out there and get a vacation or a permit list. So if your city, county or township requires a vacation or permit. There is a list out there that you can get. And if they push back, just mention these four words, Freedom of Information Act, and they are required to give you that list. So sometimes it's really easy. Sometimes you can go and download it straight from their website. Sometimes you gotta go down to the county courthouse and brown the little old lady behind the counter with brownies and cookies. And maybe if she's lucky, she'll give it to you on a CD-ROM or something like that. But you can go out there and get some of these lists and then you overlay it. Some of those data lists, you can get some additional features. If you're able to scrape or hire somebody that can scrape that data off of, call it Virbo or booking.com or Airbnb, you can then append it. So now think about how robust this database is. You've got all the information from the OTAs. You got all the information from the vacation on permit list. And you got all this in for public records from the county courthouses. And then you've appended it to get emails and phones. It can be pretty extensive. And you can get some pretty solid information. It's just a matter of how much time and effort you want to put into this. and how accurate and how precise you want that list to be.

Jasper Ribbers:
I hear the word scraping, one thing that always comes to my mind is that legal? Like are we allowed to scrape sites?

Brooke Pfautz:
My understanding is it is legal. I wouldn't think we would have companies like AirDNA. I don't think they would have had that huge investment. KeyData Dashboards does some, I know they have a direct pipeline, but they have a lot of scraping technology as well. I don't think these large private equity companies would invest dozens, if not hundreds of millions of dollars into them if they didn't do their due diligence, if it wasn't legal.

Jasper Ribbers:
point. Cool. So those lists, by the way, like what, how, how much money do we have to invest in to get this done?

Brooke Pfautz:
I mean, it depends on how much I mean, so you can, I mean, some, look, some, some of these, you can go straight to like Florida, for example, you can go straight to property appraiser and download for free. Now, sometimes it's challenging. Uh, you can only download one record at a time and that's just not feasible. But if, um, some of these list brokers, you can pay anywhere from eight cents to 25 cents per record. It also depends on how much appending you want to do and get, you know, emails. If you start going out there and pay somebody to scrape, you know, I'd recommend going to Fiverr or Upwork and just hiring somebody. that can scrape some of those data. I mean, you can get somebody sometimes in India or Pakistan for 500 bucks to do it. If you have some skills and you kind of coach them on it, sometimes you can just go out there and pay a lot more for it. It just depends on what you get, but it varies. It really does. It just depends on how in-depth you really want to get. But I would say just from the list brokers, plan on spending anywhere from like 8 cents to 25 cents, and then maybe a little bit more money if you want to start getting emails and phones and things like that.

Jasper Ribbers:
All right, so now we got the data. What's the next step?

Brooke Pfautz:
Yeah. So, um, well, the first thing I always say is build a website. If you don't have a website,

Jasper Ribbers:
Mm-hmm.

Brooke Pfautz:
go ahead and build a website at a minimum, build a landing page, build a, you know, go to, um, unbounce is a great landing page builder where you can build really well-designed landing pages that are designed to convert, um, for, you know, under a hundred bucks a month. And you can have that just for, you know, again, this is just for getting new inventory and not talking about guest marketing strategy. Um, what I would then recommend, yeah. So build out a right, really nice landing page. That's kind of the first. part of the funnel, get a good CRM. You know, there's tons of CRMs out there. There's HubSpot, there's Salesforce, there's Zoho, shameless plug, Venturi, we built a CRM from the ground up specifically to be used for inventory acquisition with all the triggers and the workflows and stages and all the copies already written and embedded in there. But HubSpot is a great place to start. You can get a great CRM for free. That really helps you out. Now be careful, cause you know, they'll get their… They're fangs in you pretty quickly. And before you know it, you're spending 2400 bucks a month on a killer CRM, but they have a way of upgrading it. But they do have a, their free version is pretty good too. So that'd be the first part. From there, I mean, there's, we call it kind of the omni-channel marketing. It's more of an outbound marketing channel. And what we recommend is there's a couple of things, different strategies, and I'll go over each one of these. But first is direct mail. There's email, there's list-based retargeting or list-based targeting. through like Instagram and Facebook. And then you can even do, if you wanna be a little bit more proactive, you can get some like IP type targetings as well. So direct mail still works. The vacation rental industry is one of the few industries where direct mail still works. Part of the number one recommendation I can give you with direct mail is consistency. I would much rather send a thousand postcards six times over the course of a year. than just dumping 6,000 postcards all at one time. I mean, it takes that repetition. People are in different phases of the buyer journey. You gotta hit them when they're ready to do it. And I mean, I've heard it sometimes takes seven to 10 times of being in front of somebody before they actually recognize your logo and recognize your name and things like that. So definitely recommend doing direct mail multiple times, multiple touch points. Very often when we pitch people on the, you know, we kind of go through our strategy. We talk about how direct mail is a big part of the strategy, the Omni channel. They say, oh, I tried it once. I sent a direct mail piece out. I didn't get one call. Well, you gotta be consistent

Jasper Ribbers:
Mm-hmm.

Brooke Pfautz:
with it. You gotta continue to do

Jasper Ribbers:
Yep.

Brooke Pfautz:
it. Another one is email. Email actually works. I mean, this is a fantastic one, but we're not talking about, you know, constant contact or mail chimp type of, you know, pretty emails. It's very simple, very, just ask for a very light lift. Don't, the longer your email is, the worse the response is gonna be. Very, very short, ask them for something. Just, hey, we've identified your property, we think it'd be a great property in our management program. Would it be okay if I sent you a rental projection? Something as simple as that, believe it or not. And it's just, you're asking for those little lifts. We have a partner, one of our partners in Kauai. First email campaign he sent out, he got three response, three deals from. average gross booking revenue was $100,000 per property. So you just generate $300,000 in annual gross booking revenue from one email campaign. And I would also recommend don't use your regular email, use something like, there's plenty of different services out there that can ensure that those emails, MailShake is one of them. Make sure your emails are getting delivered and they're going into the inbox and not the spam box. Another strategy we've had a lot of luck with is what's called list-based targeting. And this, you know, you can do this on Facebook. You can do this on Instagram. You can even do it on like LinkedIn and Twitter. This is where, you know, you've gone out there, you've identified your targets, you've gotten their emails and phones, and this is one of the reasons it's really important because that's how these companies are identifying you. When they ask you for your cell phone, it's not for, you know, third party or for… verification purposes and things like that. It might be, but the other part is it's almost like your social security number. It's your unique identifier. So now they can target specifically to you. So if you have their cell phone number, you have their email, you can really target them. And now they're seeing your ads on Facebook, Instagram, LinkedIn, and Twitter. And again, if you do this in an omni-channel approach where you're hitting them all at the same time, think about they just saw your ad on Facebook, they just got an email from you and then they go to their mailbox and they got a postcard in your. in your mailbox, it's like, man, these guys are freaking everywhere. It's just, it helps accelerate it a little bit, especially when you identify there's really there's high value targets that you wanna go after.

Jasper Ribbers:
Mm hmm.

Brooke Pfautz:
And then the last one, just, you know, this is a strategy some people do, it's IP targeting. So again, you're getting your target addresses and then you can match anywhere between 40 and 60% of the IP addresses typically. And then you're serving up ads as they're surfing the web. So millions of websites like. It could be ESPN, Weather Channel, CNN, Fox News, whatever happens to be. You can kind of serve up those ads directly to them. And they're like, man, these guys are absolutely everywhere. Maybe I should reach out to them.

Jasper Ribbers:
Yeah, I guess, you know, the short rental industry is just like any industry, we need to have a funnel, right? A marketing funnel where it's like, okay, we need traffic to go to a website and then we need to convert that traffic into getting in touch with them. And then we need to close, right? We need to, we actually close the deal.

Brooke Pfautz:
Well, that's a great point. I'm glad you brought that up because the number one factor that we see in all of this, like, you know, look, you know, I can give you all the pretty, you know, landing pages and postcards and things like that. But if you don't pick up the freaking phone, it doesn't do you a lick of good. You know, we actually went out and secret shopped a hundred property managers, inquired about their property management services. And you know how many times they actually picked up the phone? 34% of the time, two thirds of the times they didn't even pick up the phone. When we left a message, they only called us back 57% of the time. So it means like the vast majority of these leads are going untouched. It reminds me of a quote from Woody Allen. It's like 80% of success is just showing up. You know, it's like, it blows my mind. You know, you'll go out there and you'll secret shop these companies and they don't even reach out to you. And so it's like, even if you just respond in a quick, timely manner, you have a much better opportunity of doing it. I think there was a And I'm going to massacre the stats here. See if I can remember this off top of my head. There was a guy named Marco Barage. Marco Barage was the former chief revenue officer at HubSpot. He was like employee number three there. He said, if you direct with a lead, if you connect with a lead immediately or within 10 minutes, you are 10 times more likely to close it than waiting just one hour. And you're like 10,000 times more likely to close it if you wait one day. So speed and responsiveness in the end is probably the number one factor in closing these things. respond to respond quickly or make sure you minimum have, you know, some kind of marketing automation software like HubSpot has, or, or even the Venturi platform has that can respond to these leads really, really.

Jasper Ribbers:
It's kind of funny because we're in hospitality and everybody knows if you get an inquiry for, for booking, everybody knows the faster you respond, the better the chance of locking down the booking. Right. Um, and

Brooke Pfautz:
Same

Jasper Ribbers:
I

Brooke Pfautz:
thing

Jasper Ribbers:
think

Brooke Pfautz:
goes with

Jasper Ribbers:
I feel

Brooke Pfautz:
others.

Jasper Ribbers:
like most, most hosts are really good at that. You know what I'm saying? Like, I'm sure like if you send, if you send a booking increase, all those people that you secret shop, they'll probably get back to you on the booking way faster.

Brooke Pfautz:
but not on the owner. Yep, it's almost like the owner acquisition becomes like, it's an afterthought. Like whenever I see so many of these companies build these beautiful websites and it's all geared for the guests, which is great, you need to do that. But the owner side, you know, getting new properties in your program is an afterthought. And it shouldn't be because really, that's the most important lever that you can pull. Out of all the levers out there, getting new inventory is the ultimate lever. I mean, getting, I'm gonna offend some people on the guest marketing side, but getting guests in my mind is easy. you know, getting the owners is the hard part. If you get the owners, you'll ultimately get the guest. And that's where, you know, again, it's the most impactful lever you can pull.

Jasper Ribbers:
Right. So let's move further into the funnel, right? So we're getting people to our website. Let's talk a little bit about conversion, right?

Brooke Pfautz:
Mm-hmm.

Jasper Ribbers:
So somebody lands on the website. How do we get that person to take action and fill out our contact form or get in touch with us?

Brooke Pfautz:
Yeah, well, I mean, the first thing is having a really well-designed landing page. So we actually have published, if anybody emails me, brookeadventurey.com, happy to share it with you. We have a, it's a seven key messaging building blocks. And so it's a interactive workshop, a worksheet that helps you kind of build out what those are, but these are the seven key messaging building blocks need to be in all your marketing for new owners. Uh, the first thing is USP. What's your unique selling proposition? What is the one thing that sets you apart? that makes you unique that nobody else can say. Well, let me back up even before I get there. And really a lot of it comes down to, it comes down to imagery. You gotta have really good images out of the gates. That is your brand. This is your virtual store. Make sure you're kind of highlighting your properties and yourself really, really well. So first up is again, from the seven key messaging building blocks is that USP, unique selling proposition. Then we talk about features and benefits. What are the key features and benefits that make up your rental program? Here's a key point though. You might be doing things that everybody else is doing, for example, revenue management, but if nobody else is highlighting it, and you highlight it, you're the star. So highlight it, highlight that feature, highlight the benefit and how it benefits them. Big fan of trust icons. Trust icons would be, if you're a Airbnb super host, put it on there. If you're a Virbo, premier partner, put it on there. If you're a Better Business Bureau, A plus rating, highlight it. If you've got 4.9 stars on Google, my business, highlight that. Like these are like subconsciously, they help establish like trust and credibility at that like that subconscious level. So put it on there. Social proof, get some quotes, get some testimonials from other owners. Ideally, they look and feel like them, your target you're going after. So if you're doing like any kind of micro targeting, you have like micro landing pages for specific communities or buildings, which is a strategy that I absolutely recommend. That's one of the ones, one of the main strategies I was able to build my company to 500 Properties Center Management. I would do that, but have those quotes and those testimonials from people that live in that building. Don't have them in different market, different area. Have it even mentioned the building that they're in or the community or the unit number they're in if you want. What's your compelling offer? You got to have some kind of compelling offer. My asset test for compelling offer is somebody standing over the trash can. You just sent out a direct mail piece and they're reading your postcard and they're just… what's gonna make them set it aside and not drop it in the trash can? So what is it, or if they're going back to your example from before, they're on the webpage, they're going through it, and they look at, you're just flipping through it real quick, what makes them stop, and they wanna fill out that form, which is a great segue into the next one, CTA, call to action. Every marketing piece you have has to have some kind of call to action. It could be text, it could be fill out this form, it could be call this number. Give them, make it super simple, lead them exactly to what you want them to do, what you want them to do on that CTA. And then the last but not least is risk reversals. Make it, I mean, infomercials are famous for doing this. Make it so simple where they're like an idiot not to sign up or at least just kind of like reach out. No startup fees. I mean, I hear all these companies that have crazy onboarding fees and they make the onboarding process super complicated. They lock them into long-term contracts. Like I go the antithesis of that, go the opposite way, make it reduce friction in the buying process, make no contracts, make it no sign up fees, even give them some kind of satisfaction guarantee. I mean, Evolve actually did this where you can actually sign up with Evolve. This is probably a great example of a risk reversal. You can sign up with Evolve and you can cancel and you can get 100% of your money back. I mean, what a great risk reversal when you hear it that way, you're like, what do I have to lose? Now, if you read the fine print, it gets a little different. It's like you gotta cancel between month six and seven and you gotta

Jasper Ribbers:
Hehehe

Brooke Pfautz:
do all these other, you gotta jump through all these other hoops, but the risk reversal sure sounds good on their landing page for sure.

Jasper Ribbers:
Hmm. Um, one thing that comes to my mind is, you know, when you talk about call to action, um, we can drive people to the, to a website and, you know, one thing that I think is really important is like understanding, like what, what's that person that lands on our page looking for, you know, what's their needs, what's the one thing that would, you know, get their attention. Right. And making sure that one thing is in their face. Above the fold, like that's the first thing

Brooke Pfautz:
Yep.

Jasper Ribbers:
that they see in your website. Right. And

Brooke Pfautz:
Yeah.

Jasper Ribbers:
I don't know. I, from, from what I've seen from most websites, from the people that in our, in our masterminds, our student groups is find out how much your property could make on Airbnb that seems to be like a very strong versus like, you know, get this report or contact us. What are your thoughts on that?

Brooke Pfautz:
I thought you were going to ask me that and that's exactly what I was going to say. Rental projections is what people really want. That's really what they care about is how much is my property going to earn? Even that's part of the call to action. Don't just say inquire, click here. Learn how much your property will earn in the call to action. Make it some kind of action. Another thing you can do, and we've had a lot of success with this, is actually creating some interactive content. calculator that helps estimate what it'll do. So I'm not talking about, I know AirDNA has some tools you can do, but the last thing I wanna do is give them a number that's not very accurate and it's based on AirDNA's data. And I've done some estimates. I mean, I've seen some of AirDNA's tools out there and I love AirDNA, don't give me, I don't wanna give them a bad name, but obviously they do a great job. But… I've seen, I've plugged my property in there and it's nowhere close to what I'm doing. So if I were to see that on the landing page and they said that, you know, my property will only do 40,000, but yet I'm doing 80,000, I'm probably going to go to the next company. So we actually build out for a lot of our partners, we build out these interactive calculators and these are using your data, your information that you can enter in based on the information you have about the market. And this became a great lead magnet, a great way to get leads. It can give them kind of a really, they just have a sliders. They put it in number of bedrooms, number of bathrooms, kind of view quality, things like that location. And it'll tell you a, an estimate of what the property will earn. And it's again, using your data, your information. And it's a great way to just kind of drive some traffic there. You can build out some co-branded ones, uh, give this out to realtors, build them out for realtors in your market. Um, it's a great source of, uh, of leads. And then if they want to get more information and more in-depth breakdown of the, the numbers. they can just click on the, you know, inquire, you know, get, get a detailed, uh, a breakdown of the, uh, perform on rental projections. Um, but that's, that's a great, great way to do it.

Jasper Ribbers:
Yeah. And then the next step, you know, you mentioned it already, but like, if somebody comes to your website and you have that, you know, you have that call to action right in the middle of the screen, so you can't miss it. And it says, find out how much your property could make. And they click it, they can put in their name, their phone number. So then the most, very most important thing that you mentioned is we have to call that person as soon as possible. Right.

Brooke Pfautz:
Yep. Yeah.

Jasper Ribbers:
Even waiting 10, 15 minutes. could lose us the lead.

Brooke Pfautz:
Oh, yeah. Cause they're going down and they're just, they're there and they're, they're going to all the different websites and they're just filling in their information to everybody. So a lot of times it is just who's the first one that calls. And as long as you, um, don't trip up and you give a good, uh, proposition, you're, you're more likely to close than anyone else. I mean, I mean, I'll give you one, um, one tool that we leverage, uh, that really helps our partners with this. Um, and there's some other, I think you can do this with some of the other CRMs, but we actually have a, what's called a hot call transfer. So within the Venturi platform, again, it's a CRM and marketing automation platform. And again, there's other systems that do this, but as soon as they fill out that lead, it actually does a hot call transfer directly to whoever you identified as your business development rep. So it could be you, it could be somebody on your team that's handling those. And then, so we see from the phone, hey, this is a Venturi hot lead. No matter where you are, if you're at lunch or whatever, it doesn't matter, you pick it up and you answer that damn phone, because again, speed and responsiveness is one of the most important things. So. And like I said, HubSpot has some integrations you can do as well that do that exact same thing, but highly recommend it.

Jasper Ribbers:
All right, so now we're on the phone with this person who came to our website, put in their info. What's the best way to approach that conversation?

Brooke Pfautz:
Yeah. I mean, the first thing is ask lots of questions, learn as much as you can about them, learn as much as you can about the property. And you're doing a couple of things here. The first is, you know, I would say is you're going to make sure that they're a good fit for you. One of the biggest mistakes I've found, I actually interviewed 52 professional vacate from management companies. And one of the top mistakes that they made when I asked them to identify their top 10 mistakes. One of the top mistakes they made was taking on the wrong property owners and the, or the wrong owners and the wrong properties, especially in the early days. In the early days you're racing. I did the same thing. I was racing to try to get as many, I have really aggressive goals that I wanted to hit and most of it was related around inventory on the start. And there's nothing worse than getting a, you know, married to an owner, uh, that is really just a abusive and toxic to your entire team or the property just isn't a good fit. So the first thing is you're really kind of, it's a two way interview. and you're interviewing them just as much as they're interviewing you and making sure that it's a good fit. Once you've identified, you feel like it is a good fit, it's a good property, then it's really just highlighting, again, asking lots of questions. One of the favorite questions I always ask, especially if they were in another rental program, what did you like about it, what did you not like about it? What are those key things that you would want? If you could create the ideal property management program, what does it look like? Have them tell you exactly what they're looking for. maybe they're focused 100% on money. They don't care about the maintenance so much. Maybe it's the opposite. I mean, I had when we were managing some properties in Captiva Island, we had this, you know, this guy was a billionaire and he was renting out his house and he only went out there once or twice a year. And he's like, it just felt like it was this asset that was being unused, but he didn't care about the money so much. He just wanted to offset some of his taxes, but he really cared about the property care. He really cared about the maintenance of it. So let them tell you what's important to them. And then you can go back to your, I talked about this before in the seven key messaging building blocks, you go back to your features and benefits and then you don't have to highlight each one. You just highlight those key features and benefits that they just told you were really important.

Jasper Ribbers:
That's great advice. Yeah. It's funny that you mentioned this because almost everybody that joins our programs, if they manage all our people's properties, there's almost always like they have like one or two head of clients. And one of the first things that they bring up is like, okay, I got these clients, he's looking over my shoulder all the time, like calling me on my phone, like just a huge pain in the ass to deal with. What do I do? Because I'm making money, but. It's so funny, like almost without exception, everybody

Brooke Pfautz:
Every,

Jasper Ribbers:
has those couple of clients.

Brooke Pfautz:
everyone. And like I said, I did this, I interviewed 52 people and it was probably the number one mistake that everybody mentioned was taking on the wrong property owners and taking on the wrong properties. It was just, but they all learned it. And look, it's tough in the early days, when you're struggling to cover payroll, you're struggling to pay your expenses and you need inventory. And look, I did the same thing. I mean, I took everything I could get in the beginning. And it ended up backfiring on me huge. Um, and then we finally established, you know, we identified in an ocean city, Maryland, that's a nine mile strip of sand. There's, you know, 20,000 condos. And we quickly established that there was, you know, probably five or six buildings that we really wanted to focus on. These were all new construction, higher rentals, you know, oceanfront type properties. Um, and it was just so much easier to maintain and manage. Uh, obviously when you're just doing it out of five and six, uh, buildings, as opposed to, you know, dozens and dozens of buildings up and down. Coastal Highway.

Jasper Ribbers:
So with those initial like headache clients, like how did you manage that? Did you contact them and kind of set expectations and told them like, Hey, this is how we're going to work together going forward. Or did you just like fire them right up?

Brooke Pfautz:
Yeah, great question. So the good news, bad news of Ocean City, Maryland, or Maryland in general, is you actually have to get a new rental agreement signed every year, at least you did back then. So every single year we actually had to go out and get every one of our owners to renew. And what we would do, we actually went through a process where at the end of the season, we would go through with my entire team, we bench drank all of our properties. We bench drank them on three categories. The revenue brought into the company. with the maintenance tickets and customer complaints, guest complaints. And then the last one was what we called the PETA factor, the pain in the ass. So the pain in the ass owners. So we had this, we bench dranked it, and what we did is it was kind of like a green, yellow, red system. So the bottom 10% was red, and I think it might've been like, I don't even know how we kind of split it up, maybe it was like 30% in the remainder in green. But we would go through, and if anybody was all in red, across the board, no questions asked, we did not bring them back, we did not invite them. So we sent them a letter that says, dear Mr. Jones, we've evaluated our portfolio, we've decided not to renew our contract with you next year. We wish you the best luck, and we gave them a couple other companies recommended that they can call. So that was the easy ones. Where it got a little bit challenging, it was maybe you had one of the three was red, the worst was when you had the… income to the company was a green and then the PETA factor was a red. And then it was more of a discussion between the team on what to do. Sometimes it was more of like maintenance related. You know, we would just, we would actually send it back and we did, it was more of a contingency. So we said, look, we'd love to have you back in the rental program. These are the contingencies we need to see completed. We need you to upgrade that, you know, grandma's addict couch. We need you to upgrade all your bedding. We need to upgrade your mattresses in the master bedroom and so on. And then it was more of a contingency basis. Like I said, the ones that was a little bit more challenging was when they were green on everything except for the PETA factor. And then sometimes it takes it like hitting them between the eyes and just let them know of that. And it's amazing that you'd be surprised. Sometimes they respond pretty well to it and they just don't know it. Sometimes it's just who they are, it's in their nature and they're not gonna fix, they're not gonna change.

Jasper Ribbers:
Yeah. And then it's hard, especially in the beginning, because like, you know, if it's a big revenue stream, you know, like you have to make a decision of, okay, am I going to deal with this? I'm going to try to reset expectations and, you know, manage it. Or I'm going to, I'm going to opt out of that income. Right. But you feel like, you feel like over the long-term, it's going to hurt more to keep working with them versus like dropping the income.

Brooke Pfautz:
It, I mean, it, look, every situation is unique. I mean, there's different, it's, you know, different scales of where they are on the spectrum. Um, you know, it just depends on how toxic they are, but you know, as you grow and as you get more inventory. And the worst thing you can do though, and I've seen it before is like, you're actually losing team members. When you start losing good team members because of a toxic owner, um, get rid of them, it's not worth it. You know, I mean, think about it. You could have, you know, a hundred properties in your rental portfolio and you have that 99 of them are fantastic. But you get that one jerk. You know what I mean? That's all you think about it. You think about the responses that they sent to you. You think about the emails. You think about the calls. Like that's all you're focused on. And it's, you know, it's, again, it just depends on where you are in your business. But I say it's, personally, it's not worth it. But it's easy for me to say when I made the same mistake too.

Jasper Ribbers:
Right. I feel like everybody makes that mistake. Um, so, um, just to kind of wrap this up, you mentioned you interviewed 52 managers and asked them the top 10 mistakes, right? The number one mistake was, uh, there's the onboarding wrong, the one clients. Like what, what is, uh, the top, the next one, the number two and number three.

Brooke Pfautz:
Yeah. So, yeah. So this was kind of a cool series. It happened kind of haphazardly. I just, I read some, you know, something on LinkedIn where something like SaaS, where they're talking about somebody that established their top 10 mistakes. So I was like, that's pretty cool. So I texted it to like four of my buddies that own Vaheas Rural Management companies. And I said, Hey, what are your top 10 mistakes? And each one of them actually responded. I was like, all right, it's pretty cool. This is great content. So I actually pushed it out on LinkedIn and it ended up becoming like an entire series. So for 52 days straight, I shared the top 10 mistakes that each one of these professional vacationer managers made. And then what I realized was, I mean, I went to a conference and somebody came to me and said, Brooke, this is the most incredible material I've ever seen. I'm actually printing every one of these out and I'm creating my own book. And I was like, man, I think I got something here. And I just had many people come up to me and say this. So actually I'm turning this, all this great content into a book. Um, and it's going to be released here later on in the summer, but. Yeah, so long-winded answer to get to your questions. I'll just talk about the top 10 in general. So the first one again was taking on the wrong owners and the wrong inventory. The next one was actually, and you'll appreciate this, was networking, conferences, masterminds, and local competition, meaning not kind of partnering up, extending an olive branch to your local competitor soon enough. and not looking them at as foes, but actually looking them as friends. But it was really popular, but networking was a huge one. Going out to conferences, connecting with other people, joining masterminds and going to conferences was I think a quick number two behind the taking on the wrong owners.

Jasper Ribbers:
Let's do one more. What do you think would be the number three?

Brooke Pfautz:
Yeah. It's probably inventory acquisition. It's just talking about how important a Proact and shameless, this is a nice little plug for me, but not having a proactive outbound approach of signing up new properties. Most people lob out one postcard a year. They talk to a couple of realtors, but they don't have a system in place of doing it. They don't have the sales funnel in place to do it like they do on the guest side. Again, they've spoken all this time, money and effort on their guest marketing and getting new guests and then inventory acquisition takes a back seat. But again, it is the most powerful. And the irony is most of the people that brought this up were the people that actually sold their business and they saw how valuable these contracts were. It's not only from the ongoing revenue, but actually when they sold their business because that's exactly, they got to check for every one of those contracts. And Jacoby Olin, who works for C2, president of C2G Advisors, the largest M&A firm in our industry. He did over $200 million worth of mergers and acquisitions last year of short-term big East rental management companies. And he said that the average contract value came out to about $33,000 per contract. So these contracts are super valuable. You can build net worth through just managing other properties. You don't need to do it through just owning the inventory, owning the real estate. You can actually do it through.

Jasper Ribbers:
Thank you.

Brooke Pfautz:
managing contracts to and those contracts are super valuable.

Jasper Ribbers:
Yeah. Great point. Uh, shout out to Jigobi. He was in our mastermind, um, recently, and then,

Brooke Pfautz:
Great guy.

Jasper Ribbers:
and then literally a month later, uh, one of our SMI members actually sold their company.

Brooke Pfautz:
Nice.

Jasper Ribbers:
So it was, it was awesome.

Brooke Pfautz:
Yeah.

Jasper Ribbers:
Um, sweet. Awesome. Broke. Uh, appreciate you, uh, jumping on here. This, uh, has been super valuable, uh, valuable content. Any, any final words before we, uh, how can people get in touch with you?

Brooke Pfautz:
Yeah, so I'm really active on LinkedIn. So just again, my name is Brooke Fouts where you can just search for Vintory, V-I-N-T-O-R-Y. Our website is vintory.com or feel free. If you want that infographic, you email me brooke.com. And again, we are writing this book. All proceeds go to charity. So if you want to get a kind of reserve a copy of it, it's vintory.com slash mistakes. And you can fill out your information on there. You can get a free copy of the book, or if you want to buy it, it is going to be available on Kindle and Amazon. And again, all proceeds go to vacation rental advocacy efforts to kind of helping stop banning vacation rentals, which is important to all of us.

Jasper Ribbers:
Yeah, very important. That's awesome, I love that. When is the book coming out?

Brooke Pfautz:
should be later on this summer, so probably July of 2023.

Jasper Ribbers:
Awesome. Sweet. So vinteread.com slash mistakes. And by the way, I saw one of your LinkedIn posts, actually. I didn't know you were doing 52 of them, but definitely going to take a look at some of those other ones. Awesome. Thanks so much for joining. And to the listeners, hope you enjoyed this episode. And we'll be back soon with another one. So see you then.

Brooke Pfautz:
Thanks.