Matt and Lori co-host South Florida rentals from Canada

Quick Summary

Their offer to Florida owners is a week of their time. They fly down, stay in the house, set it up, design it and launch it. Matt frames that as practical rather than generous, since managing a place from another country means you want to know where the water main is before a guest calls.

The other half of their case is the calendar. Florida hands them a long season while the Ontario cottages live off July and August, which is much of why they like investing in the States. BNBCalc Markets is one place to check a market's season before you buy.

Key Points

• The first Florida property they arbitraged turned into a co-hosting deal once the lease ran out, because the landlord asked them to take it on. He handed them more properties after that and kept asking them to run numbers on Florida deals. Matt liked the trade, since arbitrage puts rent and the bills on you every month while co-hosting only asks you to manage.
• Matt and Lori disagreed about size on air, and neither backed down. Lori's version was a boutique business, "maybe like 10 really good ones" rather than 100 properties, managed well. Matt's reply was "She's so conservative. I want at least 25." Lori's counter was one at a time.
• By Matt's count Florida runs "10 really solid months", whereas their Ontario cottages bank on July and August with a little of June and September. Winter up there is snowmobilers and ice fishing at two or three nights a weekend. Lori's other reason for preferring the US is regulatory, since she says Canada's Airbnb crackdown has climbed to the provincial level rather than staying city by city.
• Distance bites in small ways. They're three hours from the closest cottage they manage in Canada, so in Florida they lean on a runner, the son of someone from their Canadian real estate group, for the jobs nobody plans for. You think about having a plumber on file, Lori says, but nobody thinks about the garbages. One sprinkler left running put about 72,000 gallons on a single month's water bill.
• They started in 2018 with a duplex conversion they still own, then flipped through COVID. One wholetail deal made $125,000 for a sweep and a clean and a relist the next day, and a separate flip drew 120 showings in four days. Both were flips rather than rentals, though the habit carried over. Matt describes 2 a.m. setup nights before a 10 a.m. photo shoot as "a bit of the flippers in us".
• Lori was let go about a week before COVID, along with her team of 40 and other VPs, and a year of severance is what took them from half in to full time on real estate. She calls it a blessing in disguise. She also taught herself design by watching the stager on their own flips, with no course involved.

Full Transcript

Listen to the full episode on Apple Podcasts, Spotify, or YouTube.

Jeremy: We are live with the Short-Term Rental Pros Podcast. Yesterday, we had a really fun day, and this morning, we're feeling the after effects, but I'm so thankful you guys got up and are with me here to continue sharing your guys' experience.

Last time I had Matt and Lori, y'all were on, what, about a year ago?

Matt: Yeah, I'd say about a year ago. We were down in Florida at the time.

Jeremy: Got it. And yeah, I know a lot's changed, so I'm excited to get the download on that. But also, thank you guys so much for flying in this weekend.

Matt: Yeah, thanks for having us.

Jeremy: What did y'all think? This was the first time we did an in-person event here in Dumbo, Brooklyn. Had a bunch of amazing speakers, Patryk Swietek, who's sitting over there, John Bianchi, Michael Chang, Frederico, all experts on their various domains, Arthur Kolker, our founder of StayFi. We ended up hanging out with a couple other software founders that just happen to live in New York, but really just tried to get a lot of amazing people into the same space and synergize for the day. So yeah, I would love to hear your guys' experience.

Lori: Oh, we loved it. It was action-packed. Learned a lot that day, and I think it was perfect. Just the right amount of guests, the right amount of time, and really learned a lot. And it was really great to meet these people in person, because we've been following them on social media for so long. So it was really great to meet everybody.

Jeremy: Who was your favorite?

Lori: I would say...

Matt: Yeah, Patrick.

Jeremy: Patrick got the bullseye. All right, good. Great answer.

Matt: Yeah.

Jeremy: But actually, were there any specific things that... Obviously, we talk a lot, and we've had Patrick come in and speak with everybody, but I'm curious, were there specific takeaways you had, maybe things you hadn't heard before, or things that you started to think about?

Lori: I always learn a little bit more from John Bianchi in the Buy Box, and just learning a little bit more about that. I've taken his courses a couple of times and learned from him, but I always take something extra away every time he's here. So I really liked his presentation.

Matt: For me, I think it was Patrick acquiring... I don't know, I'm allowed to say all this stuff, right?

Jeremy: Yeah, yeah, yeah. These secrets you guys are hiding. Oh, Patrick, yeah. Patrick's all online.

Matt: Yeah, definitely Patrick's acquiring other management companies. I thought that was really interesting and a great way to accelerate things. And it makes sense why I put all this effort into trying to find one property. It's the same amount of effort to do all these calls and find somebody who has many properties that's looking to sell their contracts.

Jeremy: I'll give Patrick a shout out here, not because he's sitting there, but Jeff from HostGPO, I was with him the other night at a New York City meetup. And I was telling him, oh, John, Patrick, we're coming this weekend, we're doing this on Saturday.

And he goes, Patrick, man, that dude just like four years ago just hits me up on LinkedIn like three times in a row. And he's like, hey, man, I'm just getting the short-term rentals, don't have any properties yet, but I would love to pick your brain about it. He's like, yeah, eventually we just hopped on a call. And now three, four years later, he's crushing it. And I think I'm like Patrick's example, he willed and talked his reality into existence.

Matt: Absolutely, yeah.

Jeremy: The energy, right?

Matt: Yeah.

Jeremy: And how does he get deals? He was talking yesterday. People literally come to him and say, hey, you seem like a good guy to buy our property management company. And it's just because he's talked it into existence and he talks to everybody. He doesn't shut up. I don't either, too. So that's not a shot. It's a good thing.

Matt: Yeah, yeah, absolutely. You have to put it out there, right?

Jeremy: Exactly. If you keep it to yourself, nothing happens.

Matt: Exactly.

Jeremy: And then you become the guy who does this. And once you become, now you're the guy who does it and good things come from that. So yeah, absolutely. Got it.

And then generally, not even the speakers, but what was it like engaging with everybody who was here?

Lori: Yeah, it was great to, again, meet everyone because you just see everybody on Zoom calls all the time. You're not really interacting with people. So it was really a great chance to meet everybody. And we literally got a chance to interact with everyone yesterday and see what they were doing and what they're up to. And yeah, so it was a great experience.

Matt: Met some of the new people, too, right? We hadn't really met them on the Zooms very much. But then a lot of the guys, Lori's helped a lot of the guys with design or just all sorts of things. Especially the Canadian guys, I think, I was here on the phone with. So it was good to meet them in person and see what they're up to and how things panned out after learning a little bit or getting some input from her.

Jeremy: I love the Canadian contingency we got. But also, I feel like if you look just objectively, the Canadians are crushing it. No shots. I'm American. I love America. But I do think Canadians kind of have that, I don't want to say that, maybe that chip on their shoulder. Or really, it's just like, you don't take it for granted the business opportunity we have in the United States.

Lori: Absolutely. Yeah, it's a big difference investing in Canada versus the US. There's a lot more restrictions, especially when it comes to Airbnb. And they're really cracking down on more of a provincial level now, not just from a city level. So it's making it harder and harder to Airbnb in Canada.

And we find that we love the States so much more because we're in Florida and the seasonality is so much longer. We're up in Canada, if you're renting cottages, then you have really good months in the summer, but then it's kind of dead in the winter unless you're close to a ski hill or something like that. So we just like the seasonality more, it's just more predictable income. So that's why we really liked investing in Florida.

Jeremy: So tell me, give me an update. So I believe last time I had y'all on, you guys arbitraged two properties in Florida. I know things have progressed, you're looking at some different strategies. Give me the download.

Matt: So the first property that we arbitraged, we actually spoke with the landlord and he wanted us to co-host it once the lease was up. So that's what we did. We converted it into a co-host. That's been a great experience as well. And he's gotten to know us, so he's given us additional properties and he's always asking us to run numbers for him because he's big on investing in Florida. So that's been a really great opportunity to work with him.

We just are about to pick up another one in Lighthouse Point in the next couple of weeks. We'll probably be heading down there to get it all set up. And yeah, we're really just looking more towards co-hosting right now. It's more, I guess, risk adverse when it comes to that. Obviously with arbitrage, you're responsible for rent and the bills every month where co-host, you just have to manage the property, right? So it's been a much better way for us to go.

Lori: Yeah, we just really enjoy that much more. And the risk-free aspect is definitely more appealing to us and it's still quite lucrative. And we really put our heart and soul into it. It really shows in our five-star reviews that we have all across the board.

And I think a lot of owners are seeing that we really put a lot of care into it and we're treating it more like a boutique type business. We're not here to have 100 properties. We just want to have maybe like 10 really good ones and manage them really well and help landlords make money or help owners make money as well.

Matt: She's so conservative. I want at least 25.

Lori: Hey, but one at a time.

Jeremy: I saw you guys came in Friday and then I think you said you had a call at 4 PM and you closed the deal. So I know we popped some champagne last night, but maybe we need to pop another bottle.

But yeah, so that's your belief on the US side. So you guys have a US operation, South Florida, and then you also have a north of the border operation as well in Lake Country, I'm sure you call it something specific.

Matt: Yeah. It's cottage country, Ontario, basically. We just have a few cottages up there and it's, like Lori said, completely different. The seasonality is just insane in Florida. You've got 10 really solid months, but up there you're banking on July and August. A little bit of June, a little bit of September.

But other than that, in the winter, some of them are four season cottages. So we can appeal to snowmobilers and ice fishing and stuff like that, but it's really just going to be two nights, three nights, weekends, maybe one weekend a month, something like that.

Jeremy: So right now you're in your peak season, Canada, slightly slower season, but the summer is still pretty active in Florida. The fall in Florida is those two months you talked about where things slow down.

So I want to take a step back. So you guys have been in real estate as a whole for a while. I know you guys are sharing your flipping experience and you guys are part of different mass runs where they cover multifamily and pretty much you guys have exposure of seeing every facet of real estate under the sun. You've done arbitrage to this point. Now you're leaning more heavily into co-hosting. So walk us through not just the short-term rental pivot, but just the real estate as a whole, how you think about or see things.

Matt: Yeah, we started in 2018. We joined this group up in Canada. It's a pretty big network of... It's probably closer to 5,000 people at this.

Jeremy: Oh, wow.

Matt: So yeah, we were really active in that group. So we started with some flips and actually our first one was a BRRRR, I guess. We did a duplex conversion. We still own that one to this day, but then we went into flipping during COVID because it just bananas. It was crazy.

We even did a wholetail deal where we just bought a property, waited out for a close. And then once it closed, we went in, swept it, cleaned it a little bit, no work whatsoever, put it back on the market the next day and made $125,000 in one day's work right there.

Jeremy: That's nice.

Matt: That was our favorite deal, I think, just because of how little we had to... But then the flipping was crazy. We were in the paper, all sorts of stuff. But then, of course, COVID hit. Sorry, the market started to go down a little bit, so that didn't make sense anymore.

Jeremy: Yeah, the COVID market gassed, juiced all the juice out of the orange in the shortest period of time. But then the juice isn't there. A rising tide lifts all boats. And for flipping, it's home price appreciation, right? That's really the rising tide.

Matt: Oh, yeah. It was crazy. We'd go to an open house one day and just eat lunch in our car, just laughing because there'd be a lineup down the street of people just waiting to get into the house when we were trying to sell it.

Yeah, that one, we had 120 showings in four days. And that's who was saying we made the front page of the newspaper because we bought it for 430. And then we flipped it and we sold it for 850.

Jeremy: You sweeped off the front porch.

Matt: That one was a pull. We made it into a legal duplex. That was our first flip in COVID. So then that kind of fueled it for us.

Lori: So what happened right before COVID, about a week before, my company went through a reorg. And so I was let go as well as my team of 40 people and other VPs.

Jeremy: And you built a team of 40 people over an extended period of time, right?

Lori: Yeah. I put my heart and soul into that job. So really soul crushing when that happened. And then when COVID hit, nobody was hiring. It was just a complete freeze.

But I had a year of severance. And I was like, you know what? I'm going to make the best of this. And that's when we fully started getting into real estate because we were kind of just half in it when we were working full time. So that's kind of what fueled us to go into it.

Jeremy: You said, I'm going to take charge here. You had, frankly, given your life to a business. You had built something of real value, of real substance. And then there's, what, two meetings or something? Two board meetings. It flows down. They say, we need to cut something. It flows down. They say, all right, that team right there, that's going to go. And absolutely no control over that.

Lori: You never think it's going to be you because you really do put your heart and soul into it. But it happened. And it was actually a blessing in disguise. In the moment, I totally didn't think that.

But after that happened, it was great. I'm thankful that COVID happened because I would have jumped into another job right away. And everything that's happened in our real estate journey probably wouldn't have happened. So pretty grateful for that.

Jeremy: Yeah. And something you've been really good at, and I know you've been appreciated because you've been helping a lot of folk out, is just design. I think you've, and I think in Florida, particularly, we're talking about, things are competitive. You have to make it look good. So how have you self-trained yourself or how have you became a designer?

Lori: It is self-training, I guess. From doing our flips, I would watch the stager and what she would do. And I just kind of learned some tips and tricks from her and just went from there. So it didn't really take any training or any courses or anything like that. It's just been experience from doing all these flips.

Jeremy: And you guys have an interesting model where you'll talk to these homeowners in Florida, and you'll tell them, correct me if I'm wrong, hey, we'll get on a flight. We will fly down to you. We're going to stay in the house, help you set it up, help you design it, and then launch it, which that's a very, very boutique offering, I must say.

Matt: Yeah. I think it means a lot to us to spend some time in the house because when you're remotely managing something, anything comes up, sometimes you don't know what to say, right? And that's a bad feeling if you don't know where something is.

Jeremy: Hey, this switch isn't doing anything.

Matt: Yeah, exactly. Or the water is spewing out of a wall. Where do you turn off the water main, right? So things like that, just everything. So it's great to spend your time in the house and set it up over the week and really get to know it. And that allows us to make a really good guidebook and all that stuff and improves our communication with the guest.

Jeremy: Also probably improves your relationship with the owner, right? You meet them.

Matt: Yeah, you get to meet them and they can see how much we put into it, right? Staying all that time. They can see us sometimes on the cameras. It's 2 a.m., 4 a.m. We're walking around hustling because photos are that day and we need to get it done by 10 a.m., so go until it's complete. So that's a bit of the flippers in us, I guess. It's always like a timeline and getting it done on time.

Jeremy: Also, we're rolling up them sleeves.

Matt: Yep.

Jeremy: Not taking anything for granted.

Matt: Yeah.

Jeremy: Working hard.

Matt: Sometimes.

Jeremy: And this country rewards that.

Lori: Absolutely, which is very different for us.

Matt: Yeah.

Lori: We've been very grateful, very thankful for how well it's been doing down here for us, so we're really looking to expand more.

Jeremy: Yeah, what would you say? People talk, oh, can you do this business remotely or I have to do a house down the road. I mean, you guys are literally, it's international.

Matt: Yeah.

Jeremy: You guys are in another country.

Lori: Even in Canada, we're 3 hours from the closest cottage that we manage, so it's not like we just jump in the car and go. That's been hard for us because we're very hands-on. As you know, we're going down and actually setting up the properties, so sometimes it's frustrating because you just want to be able to run over and do something.

But we've made some really great connections with a woman who's in our real estate group up in Canada. Her son actually happens to be on a scholarship here in Pompano, so we use him as our runner. He does our garbages for us. Any little tasks we have, we get him to do that, so that's been a really big help because you don't think of all the little things. You think, oh, I have to have a plumber. I have to have something on file, but nobody thinks about the garbages.

Matt: The propane tanks.

Lori: The little things that just pop up every day.

Matt: Even just checking in on the cleaner's quality control, right? That's pretty important because you don't know if they're starting to slack a little bit.

Lori: Well, last week, our water bill was astronomical in Florida because somebody turned the sprinkler on to go on every day for so long, and we had like 72,000 gallons of water that month, so it's having someone to be able to run over there and make sure they fix that so that we don't have that problem again next year.

Matt: Yeah, it reminded me. I need to check the water bill. All our grass died, both of the houses in Florida at the same time. I looked on the cameras. I'm like, wait, there's no grass there. What's going on? Yeah, it turned out the sprinklers just turned off on both of them.

Jeremy: Your landscaper just didn't. That's something I think we would talk about Florida. Florida's variables. Yeah, people, I feel like, don't have as much.

Lori: It's really hard to get a cleaner who has that eye or just noticing things that...

Jeremy: Maybe things that are outside their periphery, but heads up.

Lori: The heads ups.

Jeremy: Heads up, your grass is brown and stuff like that.

Lori: Yeah, we often have to ask our cleaners, can you just go out and take a picture of the pool quickly? We don't know how much the water's gone down and we need someone to go fill it. It's like trying to train them to look for those things. We've been doing that with our cleaners.

Matt: That's where the young guy will come in, the guy on the scholarship, the runner. We'll send him over to check on the pool, fill it if need be. Like you say, the grass is dying, why check on the sprinklers.

Jeremy: Got it. Very cool. Yeah, what's in store beyond... Yeah, last night I think what was in store for us was staying out pretty late. I think we had a good group staying out until, I don't know, probably 2 a.m. or so.

Matt: Yeah.

Jeremy: But what's in the store for the future for you guys?

Lori: We're really just looking to expand our co-hosted business and we are looking more towards having those super properties that you talked about yesterday.

Jeremy: Mega properties. Everyone says super, I'm saying mega.

Lori: Okay, mega.

Jeremy: I got to coin my own word.

Matt: Coin it. Coin it.

Lori: Yeah. So we do like the idea of that. Like I said, we're not really interested in having so many smaller properties. We just want to work with a group of good ones that are really profitable and that would be the way that we're looking.

Jeremy: Yeah, it really hones in on your avatar and the level of guests that stays with you, I think.

Matt: And maybe diversify a little bit because Florida, a hurricane could wipe out our whole business if we're too concentrated in one area. So we're definitely going to look at other areas in the state as well.

Jeremy: Got it. Very cool. Well, thank you guys so much for coming in today from, I guess, driving down. Fortunately, you guys didn't have to deal with the whole flight situation. Almost everybody made it though, which I was super grateful for. I was like, oh, first one of these, of course, some technological glitch is going to cause nobody to be able to come. Like, obviously, come on now.

Matt: Thanks, Microsoft.

Jeremy: Microsoft wants us to fail. They don't want us to be in this room together.

Matt: Yeah, they must be investing in real estate or something.

Jeremy: Yeah, exactly. In the STR space. This is going to be the catalyst that takes over Microsoft's market share. We are about to figure out the new Microsoft Excel. Well, honestly, BNBCalc, you could argue, is kind of Microsoft Excel.

Matt: Yeah, absolutely.

Jeremy: Beautiful. So where can you guys post? I'm Facebook friends with you guys. I see you posting different stuff. You help out a lot of people with direct booking websites. You help out a lot of people with design. So where can folks follow your journey and then also reach out if that's something y'all can be helpful with?

Lori: Yeah, our website is frompinestopalms.com, and we can be reached at info at frompinestopalms.com. And then there's all the Facebook stuff. You can find the links on the website.

Jeremy: They post non-short-term rental stuff too.

Lori: Yeah, we do.

Jeremy: They post some fun stuff there as well. Well, beautiful. Thank you guys again, and everybody, stay tuned to the next episode of the Short-Term Rental Pros Podcast.