[00:00:05] Speaker A: Welcome to the Short Term Show. The show about short term rentals and long term wealth with real property owners hosting real properties who are crushing it in the vacation and short term rental space.
And here's your host, Avery Carle.
[00:00:29] Speaker B: Hey y'.
[00:00:29] Speaker A: All.
[00:00:29] Speaker C: Welcome back to another episode of the Short Term show. Today we have Jeremy Udovich. He is the owner of Sheboygan Vacation Rentals. We don't get a lot of Midwesterner guests on here, so very excited to interview him today.
Welcome, Jeremy.
[00:00:45] Speaker D: Thank you. Maybe we shouldn't tell anybody about the Midwest.
[00:00:49] Speaker C: The Midwest. I'm married to a Midwesterner and I 9 out of 10 recommend. There's some things, but, you know, mostly a good experience.
[00:00:59] Speaker D: It's a great spot.
[00:01:01] Speaker C: Well, tell us a little bit about yourself and your background before you got into short term rentals.
[00:01:07] Speaker D: Yeah. So graduated from college to be a golf pro. I was a golf professional for about 10 years, running golf facilities courses, teaching golf lessons, and then kind of on a whim jumped to join a buddy in the software world. So we sold software services for about 10 years and about five years ago we bought our first short term rental.
I guess it was December of 21.
And this was a partnership with my sister and brother in law and then my wife and I and we acquired one in 21, opened that in 22, took on our second one in 22, started managing one in 23, and now we have 22 properties in our portfolio and we own six of those, all in Sheboygan County. And then we have one property in Manitowoc county on Lake Michigan, just to the north.
[00:02:06] Speaker C: Okay, so why, what made you choose Sheboygan?
[00:02:12] Speaker D: Well, I lived here growing up and then we moved back here. My wife is a brain cancer survivor of about eight years.
So when that was all happening, we wanted to get close to home to where my parents were. So we moved back to Sheboygan.
And you know, we didn't know that this was going to be the best spot to have a short term rental. We just had a desire to have one and we bought one in 2021. And it just went so much better than we could have imagined.
So we went for number two and it still worked and we just kept on going.
[00:02:47] Speaker C: All right, so for people who are listening, what do people do in Sheboygan? Do they come to like go to the lake? Is this more of a suburban market where people might just be coming through for other reasons? So what's in Sheboygan?
[00:03:01] Speaker D: I'm going to let all the secrets out here. So we are on Lake Michigan.
I don't know exactly how many miles it is, but it's a lot. And Sheboygan is actually known as the Malibu of the Midwest. We have some of the nicest beaches anywhere in the country.
People do surf here, believe it or not. So that is the number one traffic driver for sure. But we also have the second most traveled to State park, which is on some sand dunes that borders Lake Michigan. We also have a world renowned racetrack which brings in nearly a million people a year.
And we have a world class golf resort that literally brings in people from all over the world. We've hosted numerous major championships, we've had a Ryder cup here. And there's actually five golf courses in this little county that are all in the top 100 in the US so even though we only have 120,000 people that live here, there are a lot of people that travel here.
[00:04:00] Speaker C: Oh, I didn't know.
I'm looking up pictures in the background.
I tend to not go north of, you know, I don't go places where it gets cold.
[00:04:09] Speaker D: It's cold.
[00:04:11] Speaker C: I have not, I'm not familiar, but I'm looking at pictures in the background while you're talking and it is really cool. Yeah, awesome. So let's talk back to you, Back to you off of Sheboygan. So you, you had a real job in quotes. If you're listening on Apple podcasts or on, on Spotify, I'm doing quotes. You had a quote, real job. See, so what made you go, I'm going to buy a short term rental?
[00:04:37] Speaker D: Well, I had a real job. It was a great, real job that paid really, really well for a Midwesterner in this little county of Sheboygan. And we just had extra money available.
My sister and brother in law did as well. He is from a lake community in northern Wisconsin that is very tourist driven. So this idea of having a lake house was interesting to us.
We didn't end up buying a lake house. It's about 600ft from Lake Michigan with our first rental. But that's what enabled us to be able to do that.
I was familiar with real estate. I was a Kiyosaki disciple. Like when I was in college, I was thinking I was gonna go take over the real estate world and went to some of his seminars and so forth. So this was always in the back of my mind.
And then when we finally had access to capital, like it just kind of bubbled back up like, we should explore this. This was around the time when we had that Ryder cup here. So houses were getting rented on Airbnb, on vrbo for like, crazy amounts of money. I got to know some folks that were participating in that. It actually looked a lot easier than I thought it was going to be. We put our house on the market on Airbnb, our basement actually, for $500 a night. And we had a bunch of people that wanted to stay here.
Turned out my wife wasn't going to let me do that, but it showed us, like, how easy it was and how possible it was.
So that's kind of what perpetuated access to the capital that we needed, a desire to be in real estate. And then like just the timing of having that all kind of culminate with that Ryder Cup. It was just kind of like this perfect, perfect storm, I guess you'd say.
[00:06:23] Speaker C: Okay, so you bought your first one. It's a lake house on Lake Michigan. Right.
[00:06:28] Speaker D: It's about 600ft from Lake Michigan, so we didn't have to pay the lake prices. It was about half. Half of what it would have cost. Oh, it's actually on the beach, but it had access to beach right at the end of our road.
[00:06:40] Speaker C: Okay, perfect. And so at what point. Or let's. Let me back up. That'll be my next question.
What, what did you pay for that? And what does that property gross?
[00:06:51] Speaker D: So we paid 595 for it. And in our first year, it did, I think just under $120,000. And to date, the. I think we did 128,500 was our peak last year.
And we did that with a 10% down second home loan at 3, 2 5. So.
And it was pretty well built and put together. So we just paid a designer furnished. It didn't have to do a whole ton. I think we have 115 total into the project. So it's like massive cash on cash returns.
[00:07:30] Speaker C: Yeah, yeah, it is. So at what point did you say, I think I want to buy another one of these things?
[00:07:35] Speaker D: Well, I would say it was not immediately on my mind until our neighbor across the street approached us and said, hey, we are going to move. Would you be interested in buying our house?
I said, well, maybe. So that one we were able to acquire for I think 395, but we did put in, I think about 180,000 into like a pretty good gut job remodel. Put in a game room, you know, kind of went all out on the design.
And that one hasn't done quite as well. That one does about 100, but still just the proximity to the other unit right by the lake, like, it's got some more potential. We just haven't realized it yet.
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[email protected] so you've talked about what
[00:09:17] Speaker C: people come to do and you realize now, okay, I've got this one property. This is doing really well. I think I'm gonna buy another one. There was a job quitting at some point in here. I want to hear about that when you were able to do that and what the steps that you took in preparation. Because so many people come to the Short Term Shop and they say, help me buy a short term rental. I want to quit my job. And there's a, it's not just, okay, I signed, I closed the deal. Time to go put in my two weeks notice. There's a lot more that goes into it. So I want to hear about your story getting to that point.
[00:09:52] Speaker D: Yeah, it's not something that we took lightly. It's definitely not something we could have done immediately. And frankly, like, I didn't intend to do that. Having all of that W2 income provided us the resources to be able to keep going, really, and making it a lot easier to get financing.
So a lot of times I get asked, like, how are you able to scale so quickly? And frankly, it was because we had access to capital. It was our own capital that made things a lot easier. We could take chances. We could buy the better furniture. We could hire the designers. We didn't have to get nervous about it. We knew we could cover the costs if things went sideways so we could proceed with confidence. There's no way, like, we could have done that. Like, now that I don't have a job, I am way more cautious. And like, it's sort of to our detriment because it has slowed down our ability to continue to grow.
So I did not quit my job until this past August. It was sort of like a mutual, it's time to give this up. We had a lot going on.
The Company was ready for me to go. I was ready, I suppose, to go. I didn't think I was anyway, I did. So this past August was the end. If you go back and listen to my podcast with Luke, I was like, don't quit your job. Like, stick with it. I stick with it. And then it just kind of got. I got pushed out almost between the amount of work I had on my plate with my actual job and with Sheboygan Vacation Rentals. We had about 18 units at the time. It was just time.
Like we had plenty of cash flow and it was time.
[00:11:34] Speaker C: Love that. I mean, you really do have to kind of like you're, like you said, wait for the right time. And people want to quit their job so quickly when they get one or two properties and it's just not realistic, nor is it smart to be honest.
You need that income. You need all the income you can to max out those 10 conventional loans that you're allowed to have. And then only after you've maxed those out, then maybe think about it. Even if the cash flows there, max out the conventional loans first.
So we had people coming to us in 2020 and 2021 actually that quit their job to be a full time real estate investor, but they hadn't bought anything yet. And I'm like, oh my God, you just cut your leave, like cut your legs off, go back and get that job back and then start.
[00:12:27] Speaker D: I would definitely not tell anybody to quit, quit their day job unless it was highly toxic, but then go find a different one.
[00:12:37] Speaker C: Yeah, you need that at least for a while.
Okay, so let's talk about how you got into managing for other people. Because I think that's a pathway that a lot of people think they want to take.
And they'll buy a short term rental, they'll see the cash start rolling in. Maybe they don't have enough money for a down payment to go buy their next one, but they're like, I'm going to be a property manager and I'm going to be the greatest property manager ever. And I'm going to have the greatest property management company because I've got $2,000 bookings. I've owned this property for six months.
What, how do you avoid being that person? And what made you decide to manage for other people?
[00:13:14] Speaker D: So how it happened was we were renovating this second home, which was across from our first, and it reminded not on the Water.
At that same time, a house on the Water did get sold and we bumped into the folks that owned it. They intended to rent it. It was a few families that had gone in on it and we just were talking and I think the next day he called me and said, like, hey, after our conversation, it was evident that you know a lot more about this than we do. Would you be interested in managing it? And I got to thinking, like, well, we're already going to have two.
It's literally again, like next door.
I think we could do this. I'm very intrigued about the actual beachfront property. So we said yes, did a bunch of research, got a contract, put together and negotiated a deal for 20% and we started managing their property. We still have it today. It does multi six figures and it's been, I think, a home run for them. It's far exceeded what they thought was possible and it was just a great stepping stone for us. But I would say the only reason all of this worked adjacent from our access to capital, was the knowledge.
I'm just one of these guys, like, if I pick a lane, like, it's the only lane I can see. Like, I can't see anything else in my life. And my wife would say that is a problem. But so when we decided we were going to have a short term rental, like, I listened to every podcast, all your podcasts. I read the books, you know, on 1.8 speed. So I could get as much knowledge as I possibly could as fast as I could. And I still do that today. Like, so pretty much everything we learned, like, we learned from you and everybody else out there that's willing to share their knowledge of what they've been through. But like, there's that. There's a saying, I feel like it's credited to servants. Richard Branson. But like, success occurs when opportunity meets preparedness. And we had the opportunity, but a lot of people have opportunities. But like, I was just prepared. Like, I don't know if there's other things in my life, having been in golf and hospitality and sales and then like having digested so much information about this industry, like, I was just ready. Like it was an accident, but it was, it was, I was prepared.
[00:15:38] Speaker C: All right, well, you know, can't argue with that. And I like that it kind of came organically for you. So, you know, somebody said, hey, will you manage mine? And then it kind of grew.
And is there anything that when an owner approaches you, or maybe, maybe you do owner outreach to get new, new properties to manage, but is there anything that is not necessarily a red flag, but what are your requirements to decide? Okay, yeah, I am going to manage this Property?
[00:16:11] Speaker D: Yeah. So there, there how? Well, so the owner has to be somebody that I think we can get along with. Like they're not going to be too high maintenance. They're willing to be somewhat hands off. So we can do what we are going to ultimately be paid to do. Like I don't want to take your money and have you tell me what to do. Like I can just go get a job again if I want to do with, you know, do that again.
I need you as a homeowner to trust me that like we're going to put our best foot forward to represent you and maximize your asset while still protecting it.
And homes that like, if I identify that homeowner, then the home still has to measure up. And I kind of categorize them by like right home, right place. That's the holy grail. Give me like an unbelievably well put together designed house on the beach. That's the best house in the best area. But then there's, there's fringe houses. We can have a really great house. So the right house, but maybe it's just in the wrong area. If we can build a story around it or if we think it's, it's right enough to be its own demand driver, then we might take that property on. We also may have the wrong house in the right area. So maybe it's a crummy old cabin at the moment, but it's sitting right on the beach or right up against that racetrack. If we can make an agreement with the homeowner that they're willing to do what it takes to help us maximize it on their behalf, that could still be a winning partnership. And then of course there's the wrong house in the wrong area where that's just a definite no go from the get go.
[00:17:43] Speaker C: Right. So you know, it's got to be a nice house and the owner has to be a personality fit, which I think is a really big part of working in client based businesses at all, is if that personality fit is not there, it's going to be very difficult to, for the relationship to work because now you have not only guests that you're dealing with that you have to make happy and serve. You've got the owner that you're dealing with too. So you've got, you're getting it from both sides.
[00:18:13] Speaker D: Yeah, for sure. It's got to be fun and enjoyable for both parties or it's just not going to work.
And then just to take it a step further, the property has to still be able to either two things. One, generate the revenue that makes it worth it, where we can add real value or the client is willing to pay such that like our margins are still intact.
So you can have a great house that's in a pretty good area, but it's small and you know, if it's only going to do 40 or $50,000 in revenue and it probably doesn't make us, you know, super excited about it, doesn't make a whole lot of sense to take that on. But we offer a high quality service and if that's what the client is really looking for and they're willing to pay the appropriate percentage and say technology and listing fee, we might still take them on.
[00:19:07] Speaker C: Right. So if you're going to make $10,000 a year on it, it may not work.
[00:19:12] Speaker D: Correct?
[00:19:13] Speaker C: Yeah, gotcha.
So what are your future plans? Are you bought? You've got six of your own currently. Are they all in the Sheboygan area? And. Yeah, and then you said that other county where Stephen. The whole Stephen Avery thing happened.
Yeah, that is correct, yes.
[00:19:32] Speaker D: So guys, we own six. We own five today. I closed on Tuesday on lake condo.
[00:19:40] Speaker C: Okay. And so all five of the six are on or near the lake.
[00:19:49] Speaker A: Sort of.
[00:19:50] Speaker D: So. So there's a couple micro markets here. So there's Lake Michigan.
[00:19:54] Speaker C: Okay.
[00:19:54] Speaker D: And then there's Elkhart Lake. Elkhart Lake is, is a small tourist market, but that's where that racetrack is that brings in almost a million people a year. So we have numerous real compression events that occur across the summer. So this condo we're acquiring is on that lake near the racetrack. And then we also have a seven bedroom log cabin on five acres adjacent to that racetrack that we own.
[00:20:19] Speaker C: Okay, got it.
Are they all three bedrooms and up or you got anything smaller? The condo might be smaller.
[00:20:27] Speaker D: I have two condos that are two bedroom, one bath that border Lake Michigan that do incredibly well. We got a great deal. We started managing them on behalf of the owner and they needed a kind of a quick exit so they self financed them.
So we have seller financing on that at a great interest rate. We did a five year balloon and those do cumulatively about about 100k. And it's just an unbelievable deal. We bought them each for furnished for about 250.
[00:21:00] Speaker C: Love that. That's a good price.
What, so what does a property typically cost in this market to get something decent?
[00:21:09] Speaker D: So I mean, our condo we're gonna pay 510.
[00:21:12] Speaker C: Okay.
[00:21:12] Speaker D: And our seven bedroom log cabin we paid 634 and that'll do about 190 to 200 this year.
But if you're talking Lake Michigan now, you're definitely in the, you know, million, million and a half to $2 million range if it's got its own private beach.
[00:21:31] Speaker C: Gotcha. Okay, so that's expensive. And which, which of these properties are all of your portfolio that you manage? Which ones are your favorite types to manage or which ones perform the best? Kind of two different questions, sorry.
[00:21:45] Speaker D: So large homes definitely do the best.
Some of these compression events or desire to be on the beach with multiple families, usually multigenerational families, they're definitely willing to pay a premium for those types of homes. So large home near that racetrack is huge for race groups, race teams, you know, again, compression driven. They know they got to pay to stay and, and they pay a pretty premium price to be there. And then that also allows us to book that home kind of year round.
Certainly the rates are much lower in the off season and shoulder season.
But because it's seven bedrooms and has 11 beds and sleeps 18 people, there's still a lot of groups that want to get together and there's just not a lot of properties like that in the area.
So those houses I love and any, anything on the beach with its own private beach, people from Chicago, Milwaukee, even you know, Minneapolis, they will also pay a premium to have their own private beach.
[00:22:52] Speaker C: All right, so that makes sense. You know, bigger properties make more money.
It's still one booking that you're managing just like you would be managing a one bedroom property. So makes sense. More efficient, more money.
Pretty basic.
Awesome. So what before we get to the final three questions of the show, what about your story as an investor, do you feel like our listeners would benefit from hearing that we haven't covered yet?
[00:23:22] Speaker D: Boy, you know, I'm just average, I middle class guy without any wealth to come into this. If you are willing to take a chance on yourself like I did, get the knowledge. It doesn't cost anything to get the knowledge. You all share so much and take a shot at yourself.
It can be so worth it and rewarding. And even if this all crashes and burns, like I will lay down at the end of it all going, you know what, we tried, we did it, we went after it and you're really work out. So I always tell my wife, see that we're going to be able to retire one day or we're going to be bankrupt. It's probably not going to be a whole bunch in between.
[00:24:08] Speaker C: Awesome. Well, very good advice. So we're to the final three questions of the show. We ask these questions to every single guest that comes on. First question, what advice would you give 20 year old Jeremy if you knew then what you know now?
[00:24:22] Speaker D: Invest sooner, start right away. Find a way. Even if you just start a habit with five bucks a month. Just get started.
We'd be a lot farther along today than we are right now.
[00:24:35] Speaker C: Good advice. And number two, what advice would you give a new short term rental investor who's looking to get started today?
[00:24:43] Speaker D: Save money first, have access to capital because everything is not going to go perfectly all the time and more and more as the market matures. You have to do it right and that costs a little bit more money than it did five years ago.
[00:25:02] Speaker C: I do agree with that. And it's not going to go back to what it cost five years ago.
[00:25:07] Speaker B: Nope.
[00:25:09] Speaker C: Also good advice. And last question, what's your favorite book that's impacted your mindset?
[00:25:15] Speaker D: Rich dad, poor dad for sure. That absolutely changed my life. When I was in college, good friend of mine had a very successful father. He gave me the book name and said like, this is what my dad had me read and I went right to the bookstore and got it. And literally that changed everything about my life going forward.
[00:25:37] Speaker C: It's a good one. Classic.
[00:25:39] Speaker D: It's a classic. I know it's cliche now, but that's credit is deserved for sure.
[00:25:46] Speaker C: Totally.
All right. And last question, Jeremy. If our listeners want to find you, follow Sheboygan Vacation Rentals on social media, lurk or otherwise. How do they do that?
[00:25:57] Speaker D: Yeah, so all of our socials is at Sheboygan Vacation Rentals or email me jeremyganvacationrentals.com Also on LinkedIn @Jeremy Youdovich or Sheboygan Vacation Rentals.
[00:26:13] Speaker C: All right, well, Jeremy, thank you so much for coming on. It was a pleasure chatting with you and listeners. We will catch y' all next week.
[00:26:31] Speaker D: Sam.
