The Mission to Democratize Vacation Homes with Paul Kromidas

0:01Boom! Shake the room, Fire Nation! JLD here and welcome to Entrepreneurs on Fire! Brought to you by the HubSpot Spot Podcast Network! the audio destination for business professionals with great shows like inclusion and marketing. Today, we'll be breaking down the mission to democratize vacation homes. To drop these value bombs, I brought Paul Chromidis into EO Fire Studios. As CEO and founder of Summer, Paul is a mission-driven entrepreneur pioneering an innovative approach to vacation home ownership with a vision to carve a new path for homeowners seeking to own a second home. Paul leads the Summer team to open access to vacation homes by eliminating the headache and risk associated with buying.

0:42And today, for our nation, we'll talk about democratizing vacation and second home ownership. We'll talk about examples of families achieving this goal. We'll talk about what's coming up for summer in the future, the next 6 to 12 months, and so much more. And a big thank you for sponsoring today's episode goes to Paul and our sponsors. Sales Evangelist, hosted by my friend, Donald Kelly, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Each week, Donald interviews the world's best sales experts, successful sellers, sales leaders, and entrepreneurs who share their strategies to succeed in sales right now.

1:16A recent episode you should definitely check out is the five ways to do daily outbound with LinkedIn. Listen to Sales Evangelist wherever you get your podcasts. Hostinger is among the top web hosting and website creation brands in the world. See for yourself. Head to hostinger.com slash onfire and use code onfire for an exclusive 10 % discount. That's hostinger.com slash onfire and the code onfire. Paul, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Hey, John. Great to have time with you today. You know, I found in my life, the moments where there is the most self-doubt is actually when you're right around the corner from turning, turning a turning point, basically.

2:06Finding some inner fire within, having some grit, some determination when all the chips are down. It probably does sound a little cliche. So maybe it isn't as contrarian as you might think. But it's very, very hard to do for a lot of people out there, including myself at various points. But having that deep sense of grit and determination that's just not going to say no, I think you can will your way to success. So I think that might be a contrarian view to some people. Some people think people get lucky or luck into something. I do believe that if you just keep at it long enough, you will be successful.

2:45Fire Nation, today we're talking about Paul's mission to democratize vacation homes. And I want to hear more about this mission. What does it mean? Why are you doing it? The mission is really focused around democratizing vacation home ownership. Even the name is summer. I grew up in New England where there's a lot of people who use summer, a verb, something they're doing. I'm summering somewhere, right? It's always very aristocratic when it's used, kind of like harkens back to memories of like the Kennedys and Hyannis or something like that. But I think we really wanted to turn that on its head.

3:27Make something make sense for a lot more people and show them that, yes, is owning a vacation home a luxury for many folks? Yeah, it absolutely is. But can it also be a smart investment? Yes, it can. And can it actually make you money when you're not there? Yes, it can as well. People just want the risk removed from that process, especially folks that are in sort of the middle, middle, upper class. A lot of people have some money to be able to transact and buy something. If you're removing the risk from the process and showing them how to make money on it when they're not there and be able to actually enjoy something when they are there, you're really getting the best of both worlds.

4:03And that's what we really set out to do here at Summer is make vacation home ownership make sense. I love aha moments. Like that moment that you were just like, yes, this has to be created for this reason. And I have to be the person to do it. What was that moment that led to the birth of summer? I used to work at Airbnb before starting summer. And one of the things I always noticed was how well super hosts, verified stays, basically, you know, consistent quality supply yields on that platform. A lot of people read articles right now about the Airbnb bust or the Airbnb apocalypse or whatever it may be.

4:47And I think it really speaks to our value proposition as a business even more. it is a little harder than it looks to just buy a home throw some furniture in and expect to yield to cover your costs but the folks that do this really well that have consistent five-star reviews that have professional photography that really set out to create a hospitality experience within their home because that's what it is at the end of the day do very well and when you think about from a consumer who's booking these homes the reason they do really well is because like I said it is an extended hospitality experience when you're booking an airbnb or a short-term rental you're really thinking about do i book this or do i book the marriott down the street or whatever it may be and you know with the marriott you're going to get a clean bed put your credit card down walk out the next day without having to take your own trash or clean your own bathroom right um i think when people lose money on these they expect too much out of the guest um and expect that there's a labor component involved here.

5:50And I think when I realized that we could stand these up programmatically and do that for people who are, there's a healthy degree of interest in owning these homes and owning vacation homes in a smarter way and have that actually offset some of their costs. I think that was the aha moment for me of, wait, you can actually help people own homes and offset their costs by creating this branded hospitality experience that takes the stress off of them of having to be basically owner-operators themselves. I love examples of this actually happening in the real world. So give us a couple examples of either yourself or some clients or just some overall good examples that you think Fire Nation could really understand what this looks like in the real world.

6:34I think one that really comes to mind is one of our first customers. He lives in New Jersey. We're based in New York City. He lives in New Jersey with his wife and two children. He has, I believe, a four and a six-year-old. They were looking for a vacation home in upstate New York in the Catskills area, Hudson Valley. For those who are unfamiliar with that, it's about two hours north of New York City. And, you know, he really wanted something for his kids to spend more time outdoors, sort of get off the grid, build special memories with them. And he's a wealth manager, right? So there was even more of an angle for him of this has to make sense for me both financially and lifestyle-wise.

7:13it's not a pure investment in the sense that you know some investments people make they invest in stocks they maybe they find enjoyment out of that or investing in a certain stock for fun but a lot of it's just focus on return and I think what was interesting for him about our model was this ability to really hone in on homes that were going to bring some yield to him and also get him own something now in a responsible way and I think one of the things he always talks about that I've enjoyed is the special place that they've been able to build up there for themselves. They really love it. They love going there.

7:44They go whenever they want to go, you know, 40, 50, 60 days a year. And it's taken care of when they're not there. And they, they have peace of mind. They know it's renting really well. And it's made, it made sense for him. And he's in his mid thirties and he'll tell me, you know, you've made this a place that I, you made this affordable for me in a place that I can bring my children to and form memories with them now at six and four. Instead, I would have had to have waited maybe 20 years to be able to afford a vacation home, you know, in my fifties. And my kids would have been long gone by then.

8:16I wouldn't have had those memories with them. So it's given me an extra avenue of investment and also lifestyle. I think we have countless folks like that. We also have folks who, you know, we have one customer in particular that brings to mind, you know, they live in the Bay. They bought a home with their friend. Very, very little you can afford in San Francisco proper for, you know, less than a million dollars. And they're now first time homeowners on a vacation home is their first purchase, right? And they bought a home in Park City that is less than a million dollars, but it yields really well when they're not there.

8:50So they've been able to access, you know, real estate ownership before they would have been doing that living in the Bay Area. So I think those are two stories that really come to mind for me. And Fire Nation, again, this is you being able to put yourself in a situation where like, does this make sense for me? Can I see myself going down this path? And one thing that I really want to know about Summer is just something that kind of just comes to mind when I'm thinking about this company is like, how do you differentiate yourself from competitors? What makes you unique and special? I think the biggest one to me is the fact that we generate the best returns, the best and most consistent returns for our owners.

9:38A lot of companies will come out, there's sort of folks out there that manage a property, or maybe they'll take elements of this, you know, they'll finance or they'll manage or they'll price. And, you know, we're a one-stop shop. We'll help you select the right home through data. And we turned through a lot of it to be able to pick up the right home. We help you design it out and furnish it to an aesthetic that performs to the mass audience and also takes into account the location and your preferences. We help you finance the purchase through basically a rent-to-own program if you want to go that route such as you see how the home performs before you fully commit to buying it.

10:13That is a core differentiator of our product versus anyone else. And then we price it, manage it, and generate all the yield that you have to do. I think, you know, so besides our rent-to-own product called Gradual Ownership, which is definitely a differentiator and not offered anywhere else out there, it's really that plus the idea that we are performing much better than the market and we're more accurate with our estimates. And then access to the summer network, third and most final point. All of our homes are, you know, co-branded, placed on our website, placed on our our own Airbnb listing, our VRBO listing.

10:50And folks benefit from being able to own a single asset on the network of homes and, but benefit from the greater booking revenue and network effects that come with having their home on the summer network. And they can actually stay in homes across the summer network as well. So we've really been able to build community with our network of homes as well. Fire Nation, you can see how Paul really understands his key differentials. Like he really knows how he's different from his competition, how he stands out in the market, the unique value that he provides his customers, his clients, as clear, as there, as valuable.

11:21We have a lot more to talk about around this when we get back from thanking our sponsors. Happy 2024, Fire Nation. Q1 is here, and that means new goals, more growth, and upgrading your day-to-day workflow. While most sales folks are stuck in the mud of manual scheduling, digging into data, and tracking down leads, let me share a better way to win so you can get a jumpstart on your year. The new HubSpot Sales Hub is smart sales software for today's multitasking reps. It's built to help you manage every stage of your sales pipeline with ease. It's filled with easy-to-use and powerful tools that make closing deals and collaborating across departments a breeze.

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13:09I tried out Hostinger myself, and their AI tools made building a website such a breeze. It took me just a few minutes to personalize and set everything up, all without breaking a sweat. See for yourself. Head to hostinger.com slash onfire and use code onfire for an exclusive 10 % discount. That's Hostinger, H-O-S-T-I-N-G-E-R.com slash onfire and the code onfire. Paul, we're back and you created Summer to help families achieve their goals. We've talked about some examples. They were great, but I want to get really detailed about how this is accomplished. Talk to us about that. Yeah, I'll take one of the examples that I mentioned before around this family.

13:53You know, they were looking for a home upstate. I think they wanted something that was in a certain price range and, you know, created enough land, enough bedrooms, et cetera. There were some parameters, right? But they also wanted to understand, well, what's this home going to make when I'm not there? And I think that's, you know, really where we start the process. We take a deeply analytical view on an entire market to understand and not just, you know, large swaths of the market and say, this whole market will perform within, you know, 50 to$150 ,000 a year in terms of rental revenue. No, no, no.

14:29We'll get very granular on a home by home basis and say this home on this block will generate this much in potential short-term rental revenue and sort of a base bull in a bear case. And I think what we found with that granularity is it gets folks comfortable. And in this instance, it got this individual comfortable with us as a platform. And, you know, they were able to compare that and validate that and they can see proof points on other homes we've done. And we're showing them home after home after home. And so not only are we honing in with them on, you know, the profile of the type of home they want to look at, but we're also in this case, we were honing in on him with, you know, the economic returns he was looking to see as well, right?

15:13Some people are comfortable just breaking even. I think that's a really, you know, if I told most of the listeners here, you could get a home for free, essentially having break even cover your costs. I think a lot of people, I'd be enthused about that. Some people are fine with that. Some people just want to reduce their monthly costs. They want to be in a certain location. This individual really wanted to be in a certain area. We did find a home that was able to cover its costs. So we ended up helping transact on that. Obviously if you want to go with the gradual model at that point, summer buys the home for you and you have the ability to put up basically a down payment and make monthly payments over two years to bridge into more equity in the home, in which case you can add up those monthly payments to your upfront payment.

16:01The monthly payments are actually less and earn you more than any mortgage. And you can buy the home back at any point in those two years. If you don't want to buy the home, that's fine too. You can walk away with your upfront payment in full at the end of the two years, no questions asked summer will keep the entirety of the monthly payments because we bought a home for you and took all the risk in this case this individual uh did end up transacting on the home so we were very excited about that and they're now a happy owner of the home um all the while they got to see how the home performed via short-term rental before they actually fully committed to buying it and now they own the home we are in a management agreement with them at this point um and we have kept them as happy customers in the summer network i love that concept I've actually made a pact with myself that I'm never actually going to buy a home until I'm at least allowed to sleep in that home one night, preferably multiple nights.

16:55Because, man, you can walk through a home in the morning, in the afternoon, maybe even in the evening, and it's going to give one energy, one vibe, one thing. But then when you're actually there overnight, you may be experiencing some things that are happening. And actually, my real goal is to spend a night or multiple nights in that house. And one of those has to be like a torrential downpour because I'd love to know where the leaks are before I actually take over that house. Because, man, that can be an uncomfortable surprise. And I'm speaking from experience being down here in Puerto Rico. So, yeah, good stuff.

17:30That's definitely true. So I love talking about what's just over the horizon, Paul, for companies of all shapes, sorts, and sizes. So what does the future of summer look like over the next six to 12 months? It's a great question. I think like a lot of companies out there, we want to grow. We're an earlier stage company. We've been able to accrue a little bit of funding thus far to the tune of close to$30 million on the equity side and about$50 million on the debt side. So certainly nothing to shrug your shoulders at, but we do deal in real estate. So the figures are slightly larger than some other startup companies out there.

18:14We would like to grow. We'd like to expand. We're in the process of expanding nationally right now to more locations outside of the current six that we're in. So we are now becoming a national platform throughout the United States. And I think, you know, when it comes to the network itself, I think that's what we're really looking forward to over the next six to 12 months is, you know, whether you're someone who is looking to transact on a vacation investment, second home, whatever it may, you may call it in, you know, this economy. Or I think what we've also found is that there are a lot of folks who are current vacation homeowners who are not experiencing the best utilization out of their homes or their homes are underperforming for whatever reason, or they're locked into a very nice 3 % mortgage and are looking for a little bit of liquidity, but they don't want to sell the home, right?

19:04Our network provides a lot of that value. We can get you better returns on the home. We can get you more yield on the home. So I think we've been very excited to see that side of the business turn up as well in this economy, as a lot of folks are sitting around thinking, well, I already own one of these homes and I just, I need to do something better with it because I don't want to sell it and this is a tough market. So we're very excited to continue to grow the homes in our network and continue to make more of a presence nationally and just really grow the brand and grow how people are interacting with us.

19:34Paul, we've talked a lot about democratizing vacation homes today. What's the one thing you really want to make sure Fire Nation gets from our chat today? You can make money in short-term rentals, but it is much harder than people think. Everyone has this idea that you can just wing it. And don't get me wrong. If you want to put the sweat equity into it, you can. Maybe you'll get it right. But chances are you might get it wrong. And you have to be willing to take the bet and everything that comes with it. Because even if you do get it right, you're still having to call up contractors when something goes wrong and deal with it all yourself and figure out what happens and who you're messaging on a Friday night at 1130, you know, when they're locked out of the home and how they're getting in.

20:31You know, what happens if someone, you know, wrecks something in the home, whatever it may be. I think for a lot of people, especially people who have other jobs or things to do or families or busy things, it's probably not worth the headache to just make sure you're getting the peace of mind for it. I think that's what I found and that's what a lot of people have found that have tried to do it themselves or brought it to other managers who aren't that great at it, to be honest. And yeah, I think it's a lesson that a lot of people learn the hard way. So if I were to say anything, it's just, it's a little harder than a lot of people think.

21:07Really try to envision yourself doing it. And if you like that, go ahead. But we'll gladly take the pain on for you. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with PK and JLD today, so keep up that heat. And Paul, if Fire Nation wants to learn more about you, about summer, what's your call to action for our listeners today? You can follow us across all of our social media platforms, Instagram, Twitter, or X, I should say now. and TikTok, et cetera, at Start Summering. And our website is www.gosummer.com. Check us out. You are that average of the five people.

21:46So please go find three more cool people to add to your quorum today. And Paul, thank you for being one of those five and for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you, brother, and we'll catch you on the flip side. Thank you for having me. Hey, Fire Nation, a huge thank you to our sponsors and Paul for sponsoring today's episode. And Fire Nation, successful entrepreneurs accomplish big goals. That's why I created the Freedom Journal to guide you in accomplishing your number one goal in 100 days. And we're talking step by step. Visit thefreedomjournal.com and I'll catch you there or on the flip side.

22:22Sales Evangelist, hosted by my friend Donald Kelly, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Each week, Donald interviews the world's best sales experts, successful sellers, sales leaders, and entrepreneurs who share their strategies to succeed in sales right now. A recent episode you should definitely check out is the five ways to do daily outbound with LinkedIn. Listen to Sales Evangelist wherever you get your podcasts. Hostinger is among the top web hosting and website creation brands in the world. See for yourself. Head to hostinger.com slash onfire and use code onfire for an exclusive 10 % discount.

23:00That's hostinger.com slash onfire and the code onfire.