Episode 24 - Patryk Swietek's Blueprint for Crushing the Competition in Property Management
Welcome to The Breakthrough Podcast! I'm your host, Stephen Husted. In today's episode, we have an exceptional guest, Patryk Swietek. From managing five properties to over 100 units in just a year, Patryk's journey showcases the power of strategic thinking and relentless dedication. Join us as we explore his success story, technological innovations, and personal experiences that drive his achievements.
Takeaway 1: Leveraging Market Opportunities for Growth: Patryk highlights the importance of understanding and mastering market dynamics to succeed in property management.
Takeaway 2: Effective Property Management Strategies: Acquiring and optimizing management companies have been key to Patryk's rapid growth.
Takeaway 3: Navigating Market Challenges and Adaptation: Patryk addresses the impact of fluctuating market conditions on property management.
TRANSCRIPT
∎ Teaser / Highlighted Clip
[Patryk Swietek] (0:00 - 0:42)
Whenever there's a struggle in the market, I think that's an opportunity to make renovations or to do better. So like the management company was doing okay, but I knew when I came in, I was like, if I can study this and become the best at pricing and I can become the best at listing optimization and understand this market better than anybody else, then I can win. And that's exactly what I did.
I learned the market better than anybody else. I understood, I went above and beyond to the point where I was able to become that expert that came in and totally transformed people's properties. So people were at other management companies like, well, this isn't doing it for me anymore.
People don't change when things are good. People change when things aren't going their way.
∎ Podcast Intro:
[Stephen Husted] (0:44 - 2:44)
Welcome to the Breakthrough with Steven Husted, the show that takes you behind the scenes with successful entrepreneurs, real estate investors, and other movers and shakers in the business world. In each episode, we'll sit down with our guests to explore their personal and professional journeys, including the challenges they faced, the breakthrough moments that propelled them to success, and the strategies and the tactics they used to get there. Get inspired by new ideas and strategies and get to know our guests on a deeper level.
Join us for candid conversations, powerful insights, and plenty of breakthrough moments. Please help us grow by subscribing and sharing the podcast, and welcome to the show.
∎ Guest Introduction:
Hey everyone, welcome back to the Breakthrough Podcast.
I'm your host, Steven Husted, and today we got an incredible guest lined up for you. Joining us is Patrick Swaytek, a dynamic force in the real estate and property management world. Patrick, originally from Chicago, now based in LA, has skyrocketed his business over the past year, going from managing just five properties to over a hundred units.
His journey is a perfect example of what you can achieve with strategic thinking and relentless dedication. In this episode, we'll dive deep into Patrick's story, exploring how he leveraged technology and innovative strategies to excel his property management. From acquiring management companies to optimizing Airbnb listings, Patrick has a wealth of knowledge to share.
Plus, we'll hear about his personal experiences and mindset that drives his success. Get ready for an insightful and inspiring conversation with Patrick Swaytek.
∎ Podcast Proper:
What's up, buddy?
[Patryk Swietek] (2:45 - 2:45)
Hey, how's it going?
[Stephen Husted] (2:46 - 2:47)
It's going good, man.
[Patryk Swietek] (2:47 - 2:52)
Good. Good. Good.
Yeah. Thanks for having me on the podcast, man. I appreciate that.
[Stephen Husted] (2:52 - 2:53)
Yeah.
[Patryk Swietek] (2:54 - 3:24)
Where are you based out of right now? I'm out in San Jose. Okay.
Cool. Yeah. So, California.
Same deal. I just flew in from New York, and to be honest, you kind of look like a New Yorker. You look like you belong in New York.
I don't know why. The people that see the video, you have the black hat on, the hoodie. It's kind of like the grind, the New York grind, kind of what it looks like.
Where are you from? Well, I'm in LA right now, so I've been here for five years, four or five, but Chicago originally.
[Stephen Husted] (3:25 - 3:26)
You have an accent.
[Patryk Swietek] (3:27 - 3:27)
Is it?
[Stephen Husted] (3:28 - 3:31)
Somewhat. Yeah, a little bit. It sounds like it.
It's cool. It sounds East Coast to me.
[Patryk Swietek] (3:32 - 3:34)
East Coast? Well, it's a Chicago accent probably.
[Stephen Husted] (3:35 - 3:39)
You'll take it. Yeah. How's everything been?
[Patryk Swietek] (3:40 - 4:23)
It's been good, man. I've been very focused on management companies recently. So, I just acquired another management company that I'm closing on in two days, on Thursday.
So, that'll put me at over 100 units signed, which is crazy to me. How much time was that? Two years?
Three years? Yeah. So, I had five beginning of March last year.
We bought our first company March 1st of last year, and we're closing on this third company on February 29th, which is kind of funny, because in one year, I was able to go from five that I own to 100 managed total. Okay.
[Stephen Husted] (4:23 - 4:51)
So, let's back that. Let's unpack this, because this is kind of deep. So, when you acquire this management company, how did you find it?
And what was going on? Did they just want out? Were they not managing it correctly?
What was going on? Were they changing their strategy and moving to some type of other asset class and just didn't want to deal with short-term rentals? What's that all about?
[Patryk Swietek] (4:52 - 6:33)
So, we'll back it up a little more. They say 90% of millionaires earn real estate, right? They make their wealth through real estate.
And so, 100% of billionaires make their money through private equity or buying businesses or buying other business assets, things like that. So, when I heard that, it definitely inspired me. The first company that came about March 1st of 2023, that's when we closed on it.
We found out about it probably January or December or probably around January 2023. And I was just looking. I was at a point where I had five properties.
Everyone told me real estate investing is great. You get a lot of cash flow. It's awesome.
Short-term rentals are amazing. And they have been. They've been great for me.
But what I realized is I needed more and more cash flow. And especially buying in a high-rate environment, you're really constricting cash flow short-term. And your cash on cash is, I mean, you can get 30% cash on cash.
But even then, still a lot of active work. I need more cash is the answer. And so, I was looking to get into co-hosting.
Co-hosting or property management. Basically taking an approach where I manage somebody else's property. I have my own properties.
Now that I can get 20 to 30% of their gross revenue for their property for managing it. And I thought it was a really great business model. And so, I was looking for co-hosting clients.
And somebody came to me with 14 co-hosting clients. Or 15. Somebody was looking to sell.
So, I thought it was a great opportunity to buy a management company. That was kind of the start of it all.
[Stephen Husted] (6:34 - 9:19)
Tell me your background. So, you had your own. You were learning how to manage.
But now you were scaling. That probably forced you into, okay, I really got to get tight with systems. I got to learn all this software.
I got to understand how to extract the most out of these properties for now my clients. Now you have to go way deeper now. I'm too deep, man.
Your hand is getting forced to really. Because let's also understand that when you're going through all this. The market is also shifting.
This ain't 2020. Right. 100%.
Right. So, this is a big part of the story. Because I think this is where it separates.
And I can even bring in my personal experience. We did a 1031 exchange. We sold a property here in California.
We bought a cabin out in the Smokies. Right during the rate hikes. And everything was just going crazy.
Rates were going up. We're doing DSCR. So, you couldn't lock in a rate.
So, they just kept going up and up. We're putting all this money down. But we got an obscene mortgage payment.
And I remember getting all the financials from the tired owner. And he owned three cabins on the same street. Beautiful cabins.
I would say they were beautiful locations. And had the greatest views. I don't think they were kept up that great.
But I think he bought them for super cheap. He didn't run them that good. He didn't do professional photos.
But he was book solid. Book solid. Making $300 a night.
And he was doing great. And he didn't care. And he just cashed in.
And so, when we grabbed it, we're like, okay. We're going to do a refresh. We're going to do professional photos.
We're going to do better marketing. We're going to do all the things we need to do. I flew out there.
And we're going to increase the daily rate. And we're going to make double what this guy makes. And that did play out for a good six months.
Until everything started shifting around. And we've grinded it out. I'm pretty honest and forthcoming to this.
We are glued to taking care of our systems. And working on how do we increase value without spending a ton of money for our guests. But the market has shifted.
I'm only speaking for the Smokies. But how did you pivot during that period of time? Did you have to change your expectations with your clients?
[Patryk Swietek] (9:21 - 14:13)
No, it's cool, man. It's awesome because I actually bought my first one in the Smokies, too. Did you really?
That was my first I've ever bought. It was in the Smoky Mountains of Tennessee. Severville.
It was a cute little cabin. I bought it for $3.06 in 2023. Wait, hold on.
Sorry, not 2023. Oh, boy. Dang, now we're going way back.
Sooner than that, I bet. Like 2021, I believe. Or 2022.
2021, probably. The previous owner, at the time it was COVID time. It was a lot easier to make money back then on these units.
It was the same thing. It was like $35,000. I didn't do anything to the unit.
All I did was come in, maybe replace a few things that needed to be replaced, but it was the same property. Better photography, better pricing and systems. I made $60,000 that year.
I almost doubled what they were making. Similar to your story. Except you did a refresh, which is even better.
That was the world I came from. I was like, wow, this is so easy. This is great.
Anybody can make money. Then all of a sudden, I started doing these properties in Joshua Tree. It was supposed to be really easy, and then halfway through a renovation, rates shot up.
I did BRRRS. The refi rate shot up way higher. Now I'm like, I'll be honest.
I'm probably breaking even or making a little bit of money on it. Not that much. It's nothing crazy because of these high interest rates.
It just sucks. That's the name of the game. I got stuck in a bad position.
That's why I needed a cash flow. That's why I thought of that route. On top of that, to answer your question, it got really tough.
You had to be extra special as a property. At the end of the day, there's three things you can really change. There's one thing you can't change no matter what.
Well, two things you can't change. Location and price you purchased it at. Those two things you can't change.
100% on that. There's three things that you can change. Those three things are better pricing strategy, better marketing strategy, or listing optimization strategy, or better home, better product.
A lot of times with these owners, I think what really helped was I was able to come in this market. The reason I think I was able to scale so fast, not only buying management companies, but the fact that a lot of people were in that same area where they're like, I'm self-managing, and I have to go the extra mile. It's so hard.
Joshua Tree is one of the most competitive markets in the country. The amount of amenities and the amount of beautiful homes that are out there is insane. Your average home with a beautiful design is not going to do well.
How do I stand out? How do I do better? You have to add amenities.
You have to add the right pricing strategy, the right listing optimization. Whenever there's a struggle in the market, I think that's an opportunity to make renovations or to do better. The management company was doing okay, but I knew when I came in, I was like, if I can study this and become the best at pricing, and I can become the best at listing optimization, and understand this market better than anybody else, then I can win.
That's exactly what I did. I learned the market better than anybody else. I understood.
I went above and beyond to the point where I was able to become that expert that came in and totally transformed people's properties. People at other management companies are like, this isn't doing it for me anymore. People don't change when things are good.
People change when things aren't going their way. It's funny because it's kind of ironic because then they're like, things aren't going really that well, so why invest more money into this thing? It's funny because you won't invest more money into this thing as well.
It's kind of like a cash 22, but we convinced owners to say, listen, if you put $20,000 into this, I know that you can make X amount more money. You can make your money back in the next three to six months. Great.
This was an awesome opportunity for us to come in and just to crush our competition, do better than our competition because we were able to consult our owners, get them from a position when they weren't making that much money and making way more money. For example, we took this one property from a manager that was COVID-born manager and he was making $12,000 for them during slower season, true, but still, $12,000 across six months. We did $12,000 in one month the moment we took it over.
Better photos, better everything.
[Stephen Husted] (14:13 - 14:21)
Okay, so better everything. You went for the photos, better pricing strategy. What are you doing for marketing?
I could be doing more, honestly.
[Patryk Swietek] (14:21 - 16:01)
What I do for marketing is really, I play into the algorithms. I know Airbnb is like 95% of our market. I usually go into RankBreeze.
RankBreeze is a platform that tells you where you rank and what metrics you have for each property. I look at the impressions. I look at the click-through rates.
I study the whole buyer's journey to understand, where can I optimize the listing or different parts of pricing to show up more? That strategy is what I've deployed. When I say market, I mean better photos.
A lot of times it's tweaking what is the first photo, what is the first 15 photos and what is the first 30 photos. Those are the three to four most important stuff. Hero photo is number one, most important.
Then you have the first five, also very important. The first 15 are also incredibly important and then also the first 30 is the least important but also important. People don't realize that why is first 30 important?
You can get more deeper in strategy but first 30, you're on mobile device, you're only limited to 30 photos on mobile device. When people are scrolling through on mobile, they'll scroll to the side and see how many they can see. Usually the first 10 or 15 are really important because they'll swipe around 10 to 15 on average.
They'll make their decision whether they want to click through or they don't click through. If my click through rates are really low, then that's something where I need to optimize it. This is the marketing stuff that a lot of people don't do.
People change stuff and they don't measure the marketing.
[Stephen Husted] (16:11 - 16:13)
They don't mention amenities, what the copy is saying.
[Patryk Swietek] (16:13 - 19:26)
This is all kind of speculation slash me studying people slash me having hypotheses on this whole process. There's really not that many studies on it but it's just something I've encountered. The launch of the property is one of the most critical parts which is why we focus so much time and energy on the launch.
We monitor everything during the launch. Usually around three months we'll know where the property is going to end up big time. First month it could be a dud and you could be like, wow, I have a shitty property but it's not the case.
It usually takes some time to ramp up. Month three I'll be able to know but the launch process is so important. That's something I always talk about getting the momentum going.
In the beginning when you first launch you're probably pushed to the front so that's great. The way that it's going to work right off the bat it doesn't matter if you're pushed to the front if you don't have key amenities. What I mean by that is in a really competitive market like Joshua Tree their process is like I'm going to choose the dates that's the first one.
Right, to see what pops up that's available. First available dates, easy. Then guest count that's the next thing.
That usually gets rid of a lot of people right off the bat. And then search. And then when they search then they have the top bar where they have additional things that they can choose.
The biggest thing is there's price elasticity within this industry meaning that price this is an economic term meaning price is really important to the buyer's decision. And so the first thing they're going to do is they're going to adjust the price. And when they adjust the price they might put a little bit more on the top end just in case something really nice comes up and they can negotiate or something.
So they'll adjust the price depending on what their budget is. And that's the nightly rate. And then from there they will go down and they'll see on the bottom they'll be like indicator of how many rentals are there.
So if they see 1000 plus homes still they're like well we got to really start narrowing this down. Like a down the super host. Yep, let's do only super hosts.
Now it's like less. Now only guest favorites. Now it's a lot less.
And so then they start going into the amenities. And the most popular amenities show up on top the things that people click on the most in that market. So when I go into the Airbnb search functionality I look at the top things that people are searching for in the first six or so and I make sure that most of my homes have them if I can get them.
But a big thing in Joshua Tree is hot tub pool. And so not everyone can afford an in-ground pool. So here's a little hack that we did.
It's like okay well let's get a cowboy pool involved because that cowboy pool is going to allow you to at least get the checkmark so that you can at least compete. Because if you don't have a cowboy pool you can have the most incredible house that's a hot tub.
[Stephen Husted] (19:26 - 19:27)
There's no water.
[Patryk Swietek] (19:27 - 20:20)
And it's just no other water feature. You're screwed. You're not even showing up.
You can have the most incredible place ever but if you don't have that little checkmark you're gone. Out. And because guests get less picky they're like okay well let me click hot tub.
800, 800 homes still. I can't choose between 800 homes. Oh pool.
150 homes. Even if they don't use the pool which most times we actually did studies where guests don't use the pools. Maybe 20 to 25 percent of the time they use the pool.
Oh really. That's interesting. It's like crazy.
And we know that because we have an owner that literally stays in the same plot of land and watches how many people use the pool because we told them to buy the pool and he was like 20 percent of users only use the pool. Like he's like super stingy on that. Funny enough it's kind of like true when you really look at it.
That's interesting.
[Stephen Husted] (20:20 - 20:52)
I wonder why that's so weird. Especially because in Joshua Tree you're kind of you know desolate. You're in the desert and you kind of hunker down besides going and hiking and doing whatever you know you're doing things around the house you know.
Yeah. Jumping in those. I have to admit I always use those cowboy pools and I will filter it out from hot to the cowboy.
I'm like ah cowboy's cold water it's gonna be hot there that's all I need. Yep. Exactly.
I'll save a little bit of money there. Exactly. Exactly.
I don't care if there's sand and dirt in there.
[Patryk Swietek] (20:52 - 21:46)
I'll get there. And it's like it's enough for most people. Most people love that stuff you know.
Yeah. But yeah that's the buyer's journey. They're gonna filter first right.
And then that like whatever shows up is considered an impression. So when you look at impressions that's usually like when your impressions are low usually it's because you don't really have something you're getting filtered out right away. So it's either pricing which is a big thing or it could be something involving I don't know something involving an amenity or something like that.
So there's that. And then obviously the next step is like they're gonna go through and then it's click through rates. You click on it they go onto the page that's the page view you look at the page Airbnb listing page whatever and then they convert from there.
So as long as everything looks kosher usually they'll have like multiple properties that they like and then they'll choose the one that they think is the best.
[Stephen Husted] (21:47 - 22:15)
So yeah. It's funny I was like before we were getting on I'm like all right I'm gonna take Patrick on a different direction I don't want him to talk about anything he's talked about before but then I'm feeling like I'm being super selfish like I'm gonna ask Patrick a bunch of things that I want to know and why. Everything's out the window on this podcast damn it I'm going for it.
I'll ask him all the personal stuff at the end of the at the end of the hour. I love it man. I love it.
[Patryk Swietek] (22:15 - 22:19)
Let's dive in. I geek out on this stuff so anybody I can geek out with like let's go.
[Stephen Husted] (22:19 - 23:13)
You know what's crazy? You know here's something that's really cool our street like I said has three cabins and we all know each other and the the guy that's right before me he lives out in Utah and he's an agent and I've had him on my podcast he's super cool we talk all the time like just bounce ideas talk about our cabins our cleaners we have the same pretty much the same team so we're constantly talking about things about you know how to improve and you know he's given me a lot of when we closed on ours we kind of went backwards on a lot of different things one of the big things is we closed and had this huge plumbing issue massive eleven thousand dollar plumbing issue and now that I look back on it with the company that we chose they're a little dramatic we call them out for they're like a plumbing they kind of do it all you know what I'm talking about
[Patryk Swietek] (23:13 - 23:15)
I don't know which one it is because I'm not going
[Stephen Husted] (23:15 - 23:33)
to put them out I'm not going to put them out on here but the reason we go through them is when we're in a bind and we have a guest and there's some type of major issue we just know we can get somebody out we'll go through our vendor list you know and call you know ten handymen but you know they'll be like I'm booked until this day like we need somebody
[Patryk Swietek] (23:33 - 23:40)
I know which company it is I don't know they're expensive but they're really reliable I just need one in mind okay
[Stephen Husted] (23:40 - 25:24)
and they're highly dramatic like they'll come out and go like oh my god you got to replace the whole plumbing system every toilet and your you know everything's going wrong your leach builds and so we bought into it we spent you know eleven grand doing what we needed to do it's funny they fixed the plumbing and then we have another backup downstairs in the basement where it was all happening and we get a plumber out and he's like it was just one little part between the toilet and the washer machine like thing he's like dude this is all it was right here and I I'm like oh my god like this is this is insane so anyways we burnt we spent about 15k interior wise you know blacked out all the hardware changed out the ceiling fans new refresh on furniture and took on that plumbing thing but there's so much other things we really want to do but if you go to this cabin and you you know it's in Werth Valley you turn up we got we got a community pool we got two fishing ponds that look like they're out of some movie you know where you bring your son to go fishing and catch that trout and have that moment it is exactly that you get up to the cabin and it's super private it has got the most amazing view and I'm not saying this to toot my own horn when it comes to this property it really does and I realized that once I got there I said oh my god we got a very special property and everybody says the same thing the view is amazing the cabin's quirky inside there's some things that can get enhanced we want to take the game room downstairs and basically I want to do eight and a half foot sliders
[Patryk Swietek] (25:25 - 25:26)
and just literally
[Stephen Husted] (25:26 - 26:32)
open the downstairs you know just make it all open and then extend the deck even though it's the first floor deck it still has like you know wilderness views but I want the deck to be built in amongst the trees with a fire pit you know and just immerse that whole thing I'm ready to spend that kind of money but the pricing scenario what's going on right now we're just not where we should be you know we're basically bringing money to the table the last two months so I'm you know kind of I'm in that gear where I'm like I'm just going to keep grinding this out doing whatever I possibly can learning from a lot of people and see where it ends up but I definitely don't want to have an Airbnb that just breaks even over you know a period of year that's just me I'll allocate that I'll take that money and go somewhere else and just say hey this is what went on you know this was my story and yeah I'd rather put it here and you know make a different return even though I love the Smokies have you do you go out there at all?
[Patryk Swietek] (26:32 - 26:38)
I used to go out there as a kid so I love the area it's cool it's awesome man I'm a big fan
[Stephen Husted] (26:38 - 26:44)
I love it it's kind of a sucky flight for us coming from California you know
[Patryk Swietek] (26:44 - 26:47)
you got to fly to like Dallas and yeah yeah
[Stephen Husted] (26:47 - 26:48)
and then like Knoxville
[Patryk Swietek] (26:49 - 26:51)
Knoxville and you got to drive to it it's like
[Stephen Husted] (26:51 - 27:05)
there's no other way there's no other way but it's still you know when I get there I'm like yeah this is really cool it's funny how people in California like the Smokies I'm like I know you only understand Tahoe and Big Bear and places like that
[Patryk Swietek] (27:05 - 27:05)
but
[Stephen Husted] (27:05 - 27:48)
I'm telling you Smokies is it's got to go it's got a lot of things going on there so it's a lot of development too I like that area a lot um a ton especially up north past like Pigeon Forge they're doing all kinds of crazy stuff there oh yeah like it's it's the real deal so I don't know hopefully maybe the rates come down and we can refinance but you know like you said that's a big part of it and we underwrote that that property wasn't just the hard costs you know we put in there okay we need a budget for furniture you know all the stuff propane you know the things that people want to leave out just think that it's just going to work itself out but you start adding all that up and uh that's another couple grand easily you know
[Patryk Swietek] (27:48 - 27:58)
you know it adds up things that you never thought about you're like wait what how do we we're spending a thousand dollars on utilities like what's going on here dude yes
[Stephen Husted] (27:59 - 28:38)
yeah that that threw me off too and you know that that old owner wasn't the most uh I don't know you know it was that perfect scenario it's almost like it was almost like buying a a fixer-upper you know that you're going to go in you're going to do X Y and Z you're going to you know force depreciation increase the value go ahead and do refinance pull your cash out move on to the next right you know you know it's a very methodical system you've underwrote it we went into this like oh yeah we're gonna we're just gonna crush this guy and we did we we doubled our money in that beginning but then that I was on Luke's uh Monday uh like he does like a webinar scenario
[Patryk Swietek] (28:38 - 28:39)
yeah
[Stephen Husted] (28:39 - 28:49)
yeah so I did a bunch of those too because we went through the short-term shop and I like them I think they're all cool I like I like Luke I like Avery oh yeah
[Patryk Swietek] (28:49 - 29:01)
they're great yeah they're awesome Avery spoke at my conference she's you know she's great I can't get a Luke to speak at my conference for some reason he's uh he's more like hey man I don't like being on stage you know so
[Stephen Husted] (29:01 - 29:52)
I'll tell you my I got a funny Luke story the first time I went to a BiggerPockets conference I sat in on one of their uh you know their classes right and uh and I I walk in and I see both of them and I see his hair and I see his tattoos and I'm like okay that guy's cool yeah I'm gonna go sit by him I got tattoos I'm gonna vibe with this guy and I sat next to him and it was like between both of them and I'm just talking and she's and Avery's talking to me and I'm talking to Luke and we're talking about like rock and roll bands and then all of a sudden she's like she's like uh alright good talking to you and she gets up and she goes on stage and I'm like wait what oh shoot you're there got it and he like looks at me and he's like that's my wife and I'm like right on dude like right on let's do it
[Patryk Swietek] (29:52 - 29:58)
they have little kids now I love how they go to rock concerts together it's super cool
[Stephen Husted] (29:58 - 31:03)
yeah he's super cool but you know what we were in that management Mondays that's what it's called yep that's what it was and I remember when we were getting ready to close I was going through these management Mondays and that was my big question like I don't think this market is going to sustain itself where was this market in 2018 that was my biggest question I just kept on throwing that out there like I want to know that level because then I wanted to do is I wanted to kind of understand the market then and how I can I can increase it from where this guy was because I knew that for a fact the guy didn't have he had terrible photos he was doing everything wrong right but what he was doing right is he bought them for dirt cheap and he didn't care he's like put it on for 300 I don't need a pricing tool you know I'm going to have this thing rocking and rolling he's probably smart he's like oh dude I'm this is not going to this is not going to sustain I'm out of here I'm cashing out time to give time to pass it over to those Californians yep let a California buy it those Californians they'll buy anything they think everything's a deal
[Patryk Swietek] (31:04 - 31:11)
yep that's so funny that's so funny because I went out there and they're like oh you're from California oh like they're just like
[Stephen Husted] (31:11 - 31:12)
oh yes
[Patryk Swietek] (31:12 - 31:13)
there's plenty of you guys out here
[Stephen Husted] (31:13 - 31:25)
yeah did you do you ever notice that in front of like just people like did you ever go to like a restaurant there and you say I'm from California they're like really you're from California huh like
[Patryk Swietek] (31:25 - 31:50)
they already knew they already knew they knew there was so much money coming from California when I was there they're like oh yeah we've had over the last year or two so much so many people are buying from California like it was just a normal thing and I know a bunch of my friends out here we became friends over the short term shop and all that kind of stuff they all bought cabins in the Smoky Mountains and and we're all California and we all all live in LA or in San Francisco like we're all just friends
[Stephen Husted] (31:50 - 31:51)
yeah
[Patryk Swietek] (31:51 - 31:52)
funny yeah
[Stephen Husted] (31:52 - 33:15)
that's it's kind of cool and you know what the thing that's cool about it now is like 2004 5 you and I would not be having this conversation we would not be on a podcast we wouldn't know the markets that we're all investing in and gaining knowledge you know from each other on things you know like that just didn't happen I think I've told this story before I remember when I first started kind of going down the journey of wanting to get into real estate it was before I became an agent and you know we'd go to conferences in like San Francisco and I don't know with some dude would get on stage and pitch how to flip a house and you walk out and you buy a CD and you're out you're off on off to the races you know like what the hell now you know what I mean like now it's like we could jump on a podcast and I'm like I'm not going to ask Patrick any of the questions I've heard on his podcast and now it's like tell me more Patrick I need to pick your brain in real time so what else is I got a question I got a lot of questions but let's get onto your systems and how do you handle issues how many are on your team what do they do as far as like a guest complaint you got a guest complaint it's happening in real time yeah I know that's a vague but let's kind of hear kind of how you handle that approach
[Patryk Swietek] (33:15 - 33:24)
yeah so my background is tech and it's important I've been building companies since I was 14 years old so I've been around
[Stephen Husted] (33:24 - 33:24)
I read that
[Patryk Swietek] (33:24 - 37:13)
yeah the whole thing so like I made around $40,000 a year at 14 years old building tech companies and so I've been doing that for a while I understood tech that was my game coming into this world I knew two things really well one is tech and two is building systems and building people so that was like leadership growth that kind of stuff strategies high-level strategy so going into something like this I knew that the best way to beat everybody out is to run a lean model like I I had to run lean and I had to have everything kosher and dialed in and then once everything's dialed in then I can make a more you know distinguished approach to become a 10x player in this field by becoming better in every way possible so the reason I'm saying that is because SOPs are everything in our business so you know making sure that we have a system for every situation that occurs one of them which is how to deal with guests when issues come up and so it's a two-fold thing to how I do it the first part is hiring the right people I have nine VAs all of them have Airbnb experience or most of them do I think seven of them seven of them are on the comms team two of them are accountants they they understand they work for Airbnb they work for property management companies they understood the concept of how to remove bad reviews when they come in what are the stances for that how to create a case how to win a case how to like a lot of them a lot of my my main guy used to be a trainer at Airbnb so he knew he was training the staff on what they should do on their end meaning he knew how to when you know the system you know how to break the system so it's kind of like that and so to answer your question I hired the right people that's the first step and the second step is having the right people put into play a system or approach on how to address every situation that could come up so in our market you know a broken hot tub is a common situation we look at it as a net positive like how to me so if it's a broken hot tub and it's for one night and keep in mind I'm not as experienced as they are in this but let's say it's a broken hot tub for one night and the one option is the guest gets complains to Airbnb and gets X amount of a refund let's say it's 30% of the stay for the first the nights affected so it was only one night affected they left whatever or you know whatever so we calculate if they're making a request we calculate that and we rather not give them a full refund because we know okay well Airbnb if Airbnb sides with them they're only going to get 30% refund so why give them a full refund you see what I mean so we're going to have a talk like that we want to do what's fair but also if somebody's exploiting us we have a different approach to that so it really depends on what kind of guest you are if you're trying to exploit us if we see that in our data that you're you know in the clean like the place is clean and you're just trying to to raft us to try to get as much money as possible we're going to come in hard and we're going to play play the ball because we know Airbnb really well we know the platforms really well so like we can get our way so it really depends it depends on your intention if you're a good guest and you have a reasonable intention and
[Stephen Husted] (37:13 - 37:14)
good reviews
[Patryk Swietek] (37:15 - 39:11)
yeah like good I mean yeah like all the things and then we then that approach is going to be a lot more like we're going to be really nice to you to be honest and we're going to give you the refund that you deserve and you're going to be happy and so it's going to be a win-win situation so it really depends on what happens but guest issues could range from a variety of things and so like sometimes we'll do a like we're all about perceived value as well like a lot of times people see like us delivering a $20 gift from Instacart is going to be you know $20, $30 and it's going to allow us to save a get us a 5 star review or you know save us from giving a crazy amount of refund that is worth it to us but it's perceived value they don't know that those flowers and that the chocolates cost what they do but it looks like wow this is high end they give us a bottle of champagne chocolate flowers like it's the little things it's those little things because they think oh my god this is like $100 but really it's more like $20, $30 you see so it's like it's all about how you present yourself and not to say that we're cheap and we're looking to screw people over but at the same time it's hospitality at the end of the day like you know the way that we like to put it is like if we can make their stay the best possible from their perspective that's all that matters right so in their perspective their expectations is if hot tub is everything then we want to make sure the hot tub is working if sauna is everything then we want to make sure the sauna is working like that's that's the thing if they don't care the dishwasher maybe is a little broken and they're being reasonable with us we you know that's their own right hey leave the dishes we'll do them no worries they don't need to dishwash they don't need to hand wash all good right so it really depends it just depends on the situation but hopefully that answers your question
[Stephen Husted] (39:11 - 40:20)
yeah how let me have here's a good one yeah how are you as a when you go stay at airbnbs I've only had one one bad scenario and I think it was during COVID and it was just the way that the property was marketed and you know we showed up and you know there was bars on the window there was a you know a golf club next to the bed you know and broken glass and things like that and you know I just called up you know the host and just said hey look we're not staying here this was in Palm Springs and I'm like hey we're not staying here um misrepresented this place and you know it's just not showing good you know we're not gonna give you we're not gonna give you a bad review we just want our money back and we're gonna go get a hotel room um that was the only time I'm pretty I'm not a very picky person you know I've seen some of the things that people will say about the cabin mm-hmm and I've stayed out there myself I stayed out there before we did all the work which is the funny part yeah and I'm like it's a goddamn cabin a rustic cabin in the Smokies you know with an amazing view like I can care less what the bathroom looks like
[Patryk Swietek] (40:20 - 40:21)
yeah right
[Stephen Husted] (40:21 - 41:19)
do you know what I mean like that is like not the thing I'm gonna be hyper focusing on or you know what I mean and it's just weird when people come with these random thoughts and things I'm like are you enjoy your time like yeah get outside in nature get on that deck go to that pond go to the pool like go on a hike like I don't know like sometimes I take it I take it personal sometimes but did you how many I wonder if you know this this data point um how many how many properties out in in uh Joshua Tree do you think hit the market prior to COVID to now like did it just see and it because I know the limit that permits now right they're they're putting things in place because it just got out of control mm-hmm do you think it just got out of control because of COVID like do you think that's really what just everybody was bored going hey people are going here let's just go buy this and take on this pet project
[Patryk Swietek] (41:20 - 43:05)
absolutely that's definitely what happened and people are buying average of the like average homes which we've done kind of that but we've also made them really nice but um you know I think COVID obviously COVID was in my opinion from what I've seen COVID was a time where people were able to buy anything put on the market make money you know the grandma's place that made money on Airbnb is not a thing anymore the standard of hosting is higher and that is actually a net positive in my eyes for everybody but that's just my my perspective um now yeah like that's that's what happened I've actually seen that we have a permit um cut so it's like hey like 10% of the housing market in Yucca Valley for instance which is one of the towns adjacent Joshua Tree um there's a limit for 10% of the housing market is to be short term rentals so uh people were freaking out oh my god there's a limit to the amount of um licenses funny enough um it's gone down to like 30 licenses but I think we're back up to like 70 or 100 like it never it never ran out because there's more people giving up their licenses than people getting licenses I can see that and so it's like it's funny uh and we don't you know so when owners freak out about that we're just like hey like this is the reality of the situation and uh yeah there's just yep to answer your question I think a lot of people are giving up uh the average homes are getting squeezed out people are giving up uh they're seeing air bnb saturated air bnb is dying and that's far from the truth because we have properties that do incredibly well for low price points and uh you just gotta know what to buy and what to do or how to how to manage it and I think that's that's the reality of it
[Stephen Husted] (43:05 - 44:01)
yeah you know I was you know I was thinking of something over the weekend uh I think there was one point during covid we were thinking about buying a a sprinter van and you know one I want one so that I can go you know do my mountain bike races and just travel around California in one you know just get away for the weekend but they were going they were really big uh during covid that people were renting them out I think they're you know some of them they're dialed in were making like three to four hundred dollars a night and I was wondering going oh I wonder what that market is like too now you know I mean has that changed a little bit I mean I know buying one of those sprinter vans where they were price wise I've seen where they they just they just fell off the cliff oh yeah but I think that I think that the shake out is a good thing I know you can people will put out the hype you'll see all these news you know Airbnb's done it's definitely not it's just where we we are retracing
[Patryk Swietek] (44:01 - 44:02)
you know
[Stephen Husted] (44:02 - 44:44)
we're just gonna there's gonna be a lot of people that are just gonna go that was a good run and just get out you know for whatever reason and that's cool and those permits and Joshua Tree will you know be available and people get to go in there one thing about Joshua Tree I start I you know I'm casually I look on Airbnb there's a lot of pretty badass designers go out there and they do some pretty dope shit like like it's crazy like I look at it I go yeah this is this is like an interior designer with a passion that really is going deep on just aesthetics right 100% man it's crazy I don't is there anywhere else in the United States that you get that type of
[Patryk Swietek] (44:45 - 44:52)
intense vibe I think the only other place I mean there's a few but one of them is Smoky Mountains is getting there
[Stephen Husted] (44:52 - 44:52)
is it really
[Patryk Swietek] (44:52 - 47:10)
I think it's leveling up to that kind of level Orlando is the most competitive market in the whole country I think Orlando is see that like where and look it may not be aesthetically like Joshua Tree but it's aesthetically like you know high-end like I'm talking about when you go into that market Orlando you need to have every room themed to the extreme extent it can't just be like wallpaper it's gotta be like like the beds and everything everything like it has to be over the top to make it and it's the same as design here in Joshua Tree where it's super competitive that way so I like to say that we're playing in the NBA we're playing in the NBA everyone else is playing college ball or high school ball and so you know we're out here having to go above and beyond to make money and that just that just makes us very dangerous if we go into other markets which we are entering a new market right now and so I'm really excited about that fact I'm gonna test all my theories we're entering Broken Bow so that so that's one thing where one of our clients is for properties out there and for cabins so I'm gonna be in a mountain market back again so I'm going back to my roots in Smoky Mountains that's cool and so we're ready to go back and see like hey can we take everything that we've learned and apply it here take lifestyle models take launching a property the correct way take interior design and amenities and all the different intrinsic things that we think about and so that's exactly what I'm doing I think either this week most likely is at the time of this recording is gonna be really studying that market deeply and understanding what is a standard now let's double that for instance for example nobody there I've noticed from what I've seen nobody there has a pickleball court let's fucking do it like let's let's do the extreme that nobody else does and let's crush it with our competition right so that's kind of what we're thinking about is like how do we do things that are how do we trailblaze this industry in a way that makes sense and that is you know something that people want to partake in so that's kind of what the idea is that's cool so
[Stephen Husted] (47:10 - 47:28)
let's switch gears what have you been doing in your personal life what have you been working on because I know that you know mindset personal stuff kind of equates to where are you gonna go business wise like what does your what does your day look like what's a day in the life of Patrick a day in the life
[Patryk Swietek] (47:29 - 48:58)
definitely a lot of my time is focused on management companies I've been in the weeds on it I've been geeking out on it I want to become the best of the best I teach people on the side I teach people how to buy management companies on the side I teach people how to manage management companies to like the highest level and highest degree and that's part of the things I do but that's more on the side but more so I spent a lot of time really focused on educating people on just Airbnb in general I have STR Nation you know conference that's coming up so do that this year we're gonna be in San Diego July 7th to the 9th that's an awesome thing if anybody's interested but so yeah I'm definitely focusing on those things in my life but management company is gonna be a majority of it is how do I build this incredible brand take everything that we've learned in Joshua Tree and replicate it at a different markets and different scales and continue to buy management companies continue to acquire and build what we have like everything we've done so far has been inbound we have not done any outbound outreach we haven't done any like investing into marketing at all so everything we've gotten so far has been just coming to us so that's very powerful and so like I really wanna I wanna zone in on that and like see maybe if there's paid ads or other things that we can do to really expand and just amplify our efforts that we do with inbound but
[Stephen Husted] (48:58 - 49:00)
yeah is it just you? Do you have a partner?
[Patryk Swietek] (49:01 - 49:04)
I have a business partner correct okay
[Stephen Husted] (49:04 - 49:05)
and
[Patryk Swietek] (49:05 - 51:07)
they have another set of skills that's different than yours yeah he comes from a house flipping background he's flipped over a hundred homes him and I are good managers now because we've been doing this together but he his background is definitely focused on home renovations adding value that's why when it comes to like building stuff or renovations he's he's on it he's really good with contractors he's really good at taking these homes that are like eh and let's add something a little you know a little spice to it to make it to make it incredible yeah what other goals do you have this this year? this year I mean I didn't think I was going to hit a hundred in one year to be honest that was more like a longer term goal so I this year probably in the next three to five years either get to three to five million dollars net for the management company or sell for ten million plus so that's kind of the high level goal then next three years next three to five but next year probably be on that trajectory as well and replicate this in other markets and continue to teach people hopefully teach people how to buy more management companies I think it's an incredible opportunity I have so many management companies that come across my desk and they're incredible opportunities where you can add so much value just on pricing let's say you take over a management company and you increase pricing by thirty percent you already added so much value to that company let's say it's making a hundred thousand dollars net at a 3x multiple that's worth three hundred thousand dollars now you added thirty percent more money to it now it's worth you know a hundred and thirty thousand or let's say it makes a hundred and thirty thousand net you know that you just increase the value thirty thousand times three that's ninety thousand dollars with the value increase in this management company you know now you do that scale that's interesting
[Stephen Husted] (51:07 - 51:14)
and do you think part of it just where we are in the market these management companies is like okay I'm out of it
[Patryk Swietek] (51:14 - 51:51)
that's what I'm saying like exactly we talk about this whole time man like there's going to be people that are willing to take things to the next level and there's going to be people that just want an average business if you're serious and you want to run a real business you can take these management companies and just like you take a property and you transform it it's just a higher scale you just take ten properties or twenty properties and do the same thing you know add value to them build relationships with these owners and grow their portfolios with them and there's just like a lot of benefits that from a networking perspective but also from a from a business equity and just acquisition perspective
[Stephen Husted] (51:51 - 51:55)
I think we packed it in here today dude seriously I didn't
[Patryk Swietek] (51:55 - 51:56)
yeah yeah
[Stephen Husted] (51:57 - 52:34)
I loved it well you know you were the last one on the list to get on the podcast from the from from everybody from that one from the bigger pockets conference in San Diego yeah so everybody that I think I met you I don't know where I met you but I remember I kicked back with you at some I don't know if we were at a bar or nightclub we were somewhere I forgot where we were yeah we were chilling in some little loungy thing yeah yeah but everybody has been on the podcast now which is really cool you know that I look back on it you know I think that it's like this having this platform it's just great to engage
[Patryk Swietek] (52:34 - 52:35)
you know
[Stephen Husted] (52:35 - 52:56)
like today when I was driving here I'm going and I've you know I've heard you on podcasts and I'm like my always one of my biggest things when doing an episode with guests is like okay I don't want them I really want to force them in another direction I don't want them you know and sometimes it goes that way I think you accomplished that
[Patryk Swietek] (52:56 - 53:01)
I definitely accomplished a lot of things I haven't talked about on other podcasts so good job okay
[Stephen Husted] (53:02 - 53:09)
good yeah I try to do that but yeah I really I appreciate you jumping on yeah I appreciate
[Patryk Swietek] (53:09 - 53:10)
you having me and I
[Stephen Husted] (53:10 - 53:13)
you keep rocking it dude you just thank you dude
[Patryk Swietek] (53:13 - 53:24)
I'm going to try my best dude I don't know like you asked me that goal question I was like actually that's a really good question I don't know I'm taking it one day at a time man
[Stephen Husted] (53:24 - 53:43)
yeah but that's okay man I mean you know that's the entrepreneur journey I think it kind of comes and goes and you hyper focus you know you're learning you break things as you go you know that's the cool part about it man I don't want to have it figured out dude if I have it figured out I'm out
[Patryk Swietek] (53:44 - 53:44)
never
[Stephen Husted] (53:44 - 53:46)
do you know what I mean absolutely
[Patryk Swietek] (53:46 - 53:48)
I 100% agree man 100% agree
[Stephen Husted] (53:48 - 53:51)
well we'll leave it at that so where can the audience find you
[Patryk Swietek] (53:51 - 54:20)
yeah so if you want to find me STR Nation Facebook group is fantastic we have great stuff there on Airbnb Investing if you want to talk to me I'm happy to answer any questions I'm actually very open-minded to that kind of stuff so you can actually reach me at Instagram Patrick P-A-T-R-Y-K so P-A-T-R-Y-K underscore S-W-I-E-T-E-K that's my first full name you can add in the show notes
[Stephen Husted] (54:20 - 54:21)
yeah I'll put in the show notes
[Patryk Swietek] (54:21 - 55:22)
but happy to chat I'm an open book if you really really want to level up in Airbnb Investing from these pricing strategies that we talked about I just released a book not too long ago called The Wealthy Airbnb Super Host look it up on Amazon it's I think it's an incredible book I've put for advanced users and for beginners it's got everything so like there's a whole chapter on pricing strategy exactly what we talked about in this podcast in that book I think can I mean it's only like a 99 cent book on Kindle it could 10x your business you know worth every bang for your buck a dollar it's under a dollar it's like come on you can't even get under a dollar for like a Costco hot dog and drink you can't even get a latte buddy exactly you can get all the information to leave your job and pursue a financial become financially free it's like that's incredible I hope that I'm just giving this as like the best yeah that's that's the way I want to give it as cheap as possible
[Stephen Husted] (55:22 - 56:06)
yeah it's great well you keep you keep rocking it buddy and I appreciate you jumping on today and I'll I wish you the best and yeah be talking to you soon we'll talk soon man alright buddy thanks a lot talk to you later
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