2 Wealth Show S3 Ep17 – Getting to Know Patriot Family Homes
Super E and Justin talk with Joseph Riley of Patriot Family Homes. They discuss the different markets and Joseph gives insight on Patriot Family Homes and how it got started.
Key Takeaways:
Resources and links discussed
Sponsored By: Integrated Health Solutions
We are passionate about your health and wellness and we know you want to enjoy a vibrant, pain-free, active lifestyle, but when you are in pain this seems almost impossible.
In order to be pain-free, move fluidly, and enjoy an optimal level of functionality, you need a personalized yet integrated, research based and clinically proven approach and that’s what we do.
To learn more visit us at
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About the Hosts
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!
Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.
Connect with the Hosts:
2 Wealth Show S3 Ep17 – Getting to Know Patriot Family Homes
Super E and Justin talk with Joseph Riley of Patriot Family Homes. They discuss the different markets and Joseph gives insight on Patriot Family Homes and how it got started.
Key Takeaways:
Resources and links discussed
Sponsored By: Integrated Health Solutions
We are passionate about your health and wellness and we know you want to enjoy a vibrant, pain-free, active lifestyle, but when you are in pain this seems almost impossible.
In order to be pain-free, move fluidly, and enjoy an optimal level of functionality, you need a personalized yet integrated, research based and clinically proven approach and that’s what we do.
To learn more visit us at
ihsindy.com
cryotherapyindy.com
About the Hosts
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!
Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.
Connect with the Hosts:
[inaudible] Welcome to the, 2 Wealth Show, a show that shares how you can create real wealth for you and your family. I'm one of your hosts, Justin Bogart. And my co-host is Elizabeth Sickles, AKA Super E. I am a real estate note investor specializing in performing residential real estate debt. I find the deals acquire them for my own portfolio, as well as educate investors will walking them through the process of owning a real estate note. My co-host Super E, a real estate investor specializing in short-term rentals in the management of them. She connects investors with short-term tenants and manages everything in between. Our show was sponsored by BrightPath Notes and Elizabeth Maora. You can find out more information by visiting our websites at brightpathnotes.com and elizabethmaora.com.
Elizabeth Sickles:Hello, and welcome to show number 17. Hello. So what is new in your world? Justin Bogard and the whole note space.
Justin Bogard:I'm glad you asked because we just finished and now are promoting our training course that we have for real estate note investing. And so the name of it is a called Constant Cashflow, and it's a course that, you know, Elizabeth, I've seen a lot of different people in our note space, have training courses and have educational stuff. And I kinda took the groundworks of what I felt like I should have known at the beginning to help lay the foundation to build me to going down a different path as far as investing in notes. So me and a couple of, uh, friends of mine in the note business, uh, we put together a video series about a 25 plus video series about note investing. And so this online training course is going to be available right now to buy. And so you can go to our website@bryghtpathnotes.com to find out more information, or you can email me at info. info@brightpathknows.com. We can get you more information on it. Basically we're offering Elizabeth about$300 off our retail price for$397. You can get a lot of good information about the note business. So if you've bought a note before, if you've created a note, or if you have no idea what a note is, it's still a great educational series for you. And so again, it's called constant cash flow and, and we just started promoting it. So we're very excited to have it out there, and we've already got some great feedback from people who have gone through the course already.
Elizabeth Sickles:Congratulations.
Justin Bogard:Thank you. Yeah, thank you very much. So what is new with your world Elizabeth?
Elizabeth Sickles:We had the best month ever, um, in July. So that was really, that's very exciting. We had one of our houses that grows$28,000 in Indianapolis. Uh, so yes, very exciting. And we have a really cool guest on our show. Who's also, um, a property manager and he's killing it because he's in 20 different markets. Uh, so we're really excited to have Joe on our show and, um, you know, have our listeners and viewers hear about his story and have them inspire him or him inspire them.
Joseph Riley:Hey, Joseph, how's it going? Pretty good. Thanks for being on our show. Of course now, thanks so much for having me. This is a real treat. I was, uh, hoping to be with, uh, Elizabeth in person. Uh, and then the airlines had other plans. So we're, uh, adjusting fires, we'd say in the army. So
Elizabeth Sickles:Which we also especially want to thank you for your service to our country. Absolutely. Well, I'd
Joseph Riley:Tell the taxpayers, I appreciate my salary. So it
Justin Bogard:Works both ways, right.
Elizabeth Sickles:That's right. So how long were you in the army, Joe?
Joseph Riley:Uh, I was in for eight years on active duty. I'm still, technically, I'm still in the reserves, so still technically in the army, but active duty for eight years.
Justin Bogard:Okay. So where's your, where's the base that, that you would go to?
Joseph Riley:Well, I started out, so I went to university of Virginia for undergrad, did ROTC there. And then my first assignment was actually over at Oxford in the UK. I was over there on a road scholarship and I did my masters and doctorate in international relations at Oxford, and then came back in the infantry stationed at Fort Lewis. Uh, then out of Fort Lewis, went to ranger school and then from ranger school deployed, uh, with the range regimen over to Afghanistan, uh, and then been in Korea then, uh, you cry. I was in Ukraine for a while. I've been, I was my last job. I served as the, um, I ran our counter China policy and the Pacific on the national security council for, uh, the last 18 months of the Trump administration. Um, so I've kind of been a little bit of everywhere and, uh, we actually started the company during, uh, the, at the Afghanistan deployment. Um, my wife travels for work Monday through Thursday, and so no reason for her to stick around Columbus, Georgia. So we just left the furniture, her house, threw it on Airbnb and HomeAway and realized there was a big need for this around military basis. And so came back and started getting, you know, more, uh, and, uh, and then, uh, actually on the deployment to Ukraine, uh, was when we kind of unlocked. What I like to say is our secret sauce, which is relying on military spouses because I thought I was going to be done for, uh, trying to manage the short-term rental, uh, portfolio from a shipping container in rural Ukraine. Uh, but luckily some of the, some of the spouses of some of the, uh, service members that I was with over there, you know, one of the kind of help manage things back in the U S and that's kind of become our, uh, our secret sauce is relying on military spouses and veterans to kind of help build this portfolio.
Justin Bogard:That's awesome. That's awesome. Yeah. He's almost got like a double life in a good way, right. Where they're serving and he's, and he's also making a great business for himself too. So at the beginning, Elizabeth mentioned that you were supposed to be together, uh, for this interview today and, and the, the plane that the airline situation got gotten in front of that. So obviously you have some real estate or some properties in the Indianapolis area, I assume, or maybe the surrounding area. So that is that one of your markets or
Joseph Riley:None yet. We're interested in maybe working with Elizabeth, uh, on, on that in some ways, but right now we don't have any properties in Indianapolis.
Justin Bogard:Okay. Well, if the market could be in,
Elizabeth Sickles:But you are in over 20 markets, can you talk a little bit about the different markets and why you've gone into these different markets?
Joseph Riley:Yeah, so we started out again, Columbus, Georgia was our first market. Um, and then from Columbus that, you know, it kind of for a little while tracked where the army moved me. So then I went to Clarksville, Tennessee, uh, and then we, so we started getting houses in Clarksville, Tennessee, which is Fort Campbell. It's a hundred first. Um, and then we started, you know, Columbus was doing really well. And one of the reasons Columbus does well is because you have a bunch of military graduations, uh, so basic training ranger school and everything else. So we looked at where does the military have other training depots, you know, initial entry, cause families didn't want to come and see their soldiers, you know, while they're in training or as they graduate. So Columbia, South Carolina was another one of those bases. So we went to Columbia and started getting houses. And then from there, we just kind of started using different data sources to try to drive our acquisitions. So we're now in, uh, Virginia, North Carolina, South Carolina, Alabama, Tennessee, Georgia, Florida, Mississippi, and Texas, uh, is kind of the footprint that we have right now. And again, hopefully able to work with Elizabeth and, uh, add India, Indiana to the, to the mix. So,
Elizabeth Sickles:And how many properties do you guys have right now?
Joseph Riley:Well, over 150, so, oh, wow. Congratulations. Yeah,
Justin Bogard:That's a nice size portfolio.
Joseph Riley:It's been fun. So, uh, you know, two things, you know, and so we have found that, I mean, the logistical problems of trying to manage across 20 different markets is very difficult. You'd have a lot more economies of scale. Obviously if we consolidate it down to one or two markets, but there's a fair amount of risk in this business, not just real estate risks, that's inherent to anything in the industry, but there's also a fair amount of regulatory risk. Um, you know, if local governments changed the rules on who can or can't operate short-term rentals or where they can. And so we, you know, decided to spread ourselves out across these markets, even though it requires a lot more overhead to manage across search, uh, such a, you know, kind of fused market, but as we've started managing for other property owners as well, we found that this allows someone who wants more diversification in their portfolio to be able to say, Hey, I'd like short-term rentals. I've maybe like several short-term rentals. I don't want to consolidate all down into one market and have too much risk, so we can work with an investor and they may have a property in Virginia and one in Georgia, one in Alabama, one in South Carolina, a couple in Tennessee, and that allows them to get some more diversification, but they then don't have to own board the overhead required to go into each of these individual markets and create an entirely separate infrastructure from scratch, you know, through our management company, they're able to basically pick up that infrastructure, uh, while still getting the diversification.
Justin Bogard:They're essentially just a passive investor, right. They don't really have to have any, any skillsets because you're facilitating that for them.
Joseph Riley:Correct. Right. We do, we do soup the table. We'll help people find the homes. We, um, you know, find homes, help them underwrite the homes, renovate the homes if needed. Uh, we've got a renovation manager, renovation teams. Uh, we have our own warehouses in Tennessee where we warehouse all the furniture. So then we can load all the furniture up, down to the tissue paper and, you know, so shampoo, uh, and send it out to the house, get the house fully furnished. And then of course we provide the backend management services as well. Um, and that's kind of evolved the way we started, you know, originally it was just our own properties. And then when I would run out of capital, I started doing a rental arbitrage model where we would sign a three to five-year lease master, lease with the option to turn around and operate it as a short-term rental. So we did that. And then some of the landlords that we leased from started coming to us and said, you know, how are you paying our lease and still making money? Uh, and so then we just started managing from some of those landlords, and that is kind of where the management business grew up. So now three types of properties, those we own those we lease and those we manage.
Justin Bogard:So then what got you into real estate investing? Like how, how long ago was this when you actually first acquiring your, you know, for your own, the portfolio?
Joseph Riley:Uh, 2018 was when, again, this was kind of surrounding, uh, I only got into it because of the army. Uh, the army keeps moving me, kept moving me around, so we would buy a house and, you know, then the deployment, wasn't gonna be long enough to put someone in for a 12 month lease. I didn't want to sell it all by accident. Okay. So
Justin Bogard:You got smart pretty quickly. It said, Hey, look, this is, this is something I could cash cashflow from. I'm a little going to a different city, smart or dumb. One of the two. I know
Joseph Riley:My wife would probably say I'm a nut job, but, uh,
Elizabeth Sickles:And one of the things that's really unique because you are across so many markets here in the U S is you guys have, you know, your philosophy for your nomad team. Right. Can you tell us about that?
Joseph Riley:Yeah, so, you know, again, we, we, we love working with military spouses and veterans, but we work with, you know, many other people who are not as well. So don't think, oh, I'm not a veteran or a military spouse. I can't work with Patriot family homes. Uh, definitely not, not the case. Um, so we have a lot of people, some of them, young people, some of them actually older whose children have left the house and they kind of want to go and see the world. Uh, and so, because we're an 1820 markets, you know, they can travel from, they can be in Virginia, you know, for a couple of weeks, go down to Florida, go to mountains and, you know, Georgia, you know, there's all sorts of places they can go. So we've had actually a couple people who've really enjoyed giving up their house, putting their own house on Airbnb and HomeAway, right. So that all of a sudden they've turned their liability into an asset that's producing income. And then they go on the road and set up house after house, they get to see new places. We cover all their expenses and of course pay'em, uh, you know, pay him for doing the setup. So if there's anybody who wants to travel around the world, uh, travel around the country, at least the Southeast and mid Atlantic, and maybe the Midwest here pretty soon and, uh, set up houses and, uh, you know, we'd love to talk to him so
Justin Bogard:I can, I can see that working out for the, for the younger folks as well, that want to get out and move around to different cities. Younger folks mean like the 20 to 30 year olds, not old people like Elizabeth and I,
Joseph Riley:Y you know, and, you know, as I said, you know, again, it's, it's kind of a mix, you know, it's either people who are younger, pre-children family stayed for people who are a little bit older and are maybe, you know, kids are out of the house at this point. So both of those groups and, uh, um, so yeah, I mean, we, we have traveling renovation crews too, so people who are handy and like doing renovation work and want to travel, you know, we can do that as well. For sure. Um, so lots of, lots of opportunities
Justin Bogard:And you found a great, I don't know if I'd call it a niece, be found a great fit for, for what you do and your experiences in the military and stuff, and turn into a business and how you can help other folks that are in the military. You know, you said you don't have to be in the military, but that's a great, great model. So congratulations on all your success.
Joseph Riley:Oh, thanks. Yeah. We also love, you know, the military has a great program called the career skill bridge program. Whereas folks are leaving the military. They can go intern with the company for up to six months. So we have several people who've come through and done that, and they kind of go through our pipeline, get trained, and then we help them go out to a market where they in their family want to settle and launch their own marketing kind of a franchise style. So that's been a lot of fun too. Okay. Wow.
Elizabeth Sickles:And how are you guys organized? Are you led by a board? Are you, do you have an executive staff or can you tell us about your organization?
Joseph Riley:Yeah. So we're privately held, there's a you and it's, um, it's just me and one business partner who have the company. Um, and, uh, but in terms of the leadership team, uh, you know, I serve as the CEO, we've got a COO, uh, Luke Brennan, uh, we're in the process of in-housing a controller CFO, and then we've got director, we've got directors that basically track the life cycle of a house. So we've got a director of acquisitions and she goes out and is looking for houses to buy signed leases, anything like that. We have a director of kind of business development that works on the, on the managed side of the house. So looking for homeowners who want us or investors who want us to manage their property. So that's the kind of acquisition side of either a home that we're buying and how I'm the releasing or, or managing. And then once we've acquired the home or sign the lease or the contract on the home, then if there's renovations required, we have a director of renovations. And then we have a setup director that oversees all of our warehouses and all of the logistics that's involved in order in sourcing the inventory for the warehouse, and then getting it, pushed out to all the markets as we have homes. And then we have a director of, uh, operations that oversees kind of the cleaners and all the maintenance and all the kind of day-to-day operations of our stabilized, uh, you know, properties. Uh, and then we have a director of kind of guest services and communications that oversees all of our website marketing and customer engagement.
Justin Bogard:How was, um, how did, did COVID affect you at all from the time of, we'll say, you know, March of 2020 to now, have you seen any, anything that has effected your business as far as internally and an externally with your properties? Or has it been, you guys been able to manage through that pretty well?
Joseph Riley:Yeah. I mean, when COVID hit, you know, if you asked, I think most real estate investors, what's one of the safest places you can invest. They just said, you know, something that's centered around the military, right? As long as taxpayers, like, you know, keep paying the salaries and they keep getting the BH and, you know, moving around. But, uh, we lost the, because we were so heavily focused on the military when COVID hit, we lost 90% of our reservations, uh, when the secretary of defense put in the no movement order. Cause all of the families who were traveling and everything else dried up, um, that actually turned out to be a huge blessing in disguise because then we started, we had these huge gaps come on, the calendar that we'd never had before. And we started filling that in with insurance clients whose, let's say your home had water damage got burned, you know, had some other sort of storm damage. The insurance company has to put you up in a house. So it became the preferred vendor for several of the insurance companies, uh, in, in, in kind of helping source that housing, um, and started working a lot with traveling contractors, uh, who are on the road and needed a place to stay. Uh, so early days lost all the reservations. Then we occupancy actually went up as we started doing more longer-term reservations with lower average daily rates, uh, and you know, and kind of, uh, you know, remain profitable. But nonetheless, like everybody in the hospitality industry took it, you know, took it on the chin through 2020. And then similar to what Elizabeth was saying, you know, is people come out of, COVID start in the spring of 2021, certainly going into the summer, you know, send a really great rebound and resurgence of travel. That's helped us out a whole lot.
Justin Bogard:That's awesome. And I haven't heard of anybody that was able to, um, uh, facilitate that gap and, and vacancies like you did as far as getting, being an insurance vendor. I mean, that's, that's a fantastic idea. I haven't heard anybody do that.
Joseph Riley:Where are we we're uh, uh, it was figure out something or go bankrupt, so right. Your backs against the wall. Right. You got no other choice. That's right. So, um,
Elizabeth Sickles:And Joe is your, for your maintenance and your cleaners, are they in-house, are they outsource, do you do a combo? How is that
Joseph Riley:Combination of both depending on the size of the market, you know, we have, we have markets as small as one or two houses, and then we have, you know, ones, you know, 30, 40 houses. So, um, you know, in a, and that's something we're constantly thinking through from an operation standpoint is how we is, is at what point, you know, how we kind of structure that it's actually pretty easy to have less, you know, less than five homes in a market because you can have an independent cleaning vendor and maintenance person, and it's not too many homes and it's overwhelming. Uh, so it's pretty easy. And then, you know, as you know, once you kind of get up above 20 homes, you can justify, you know, kind of full-time W2, you know, market manager that kind of coordinates everything on the ground. The real challenge is getting from like home five to 20, and that's the kind of no man's land because you don't really have the revenue base yet to justify the full-time W2 team that you need, but it's become too operationally complex for kind of a hodgepodge of the 99 vendors that are trying to kind of coordinate and sync everything. So that's, that's the, uh, so that's the biggest challenge is that kind of five to 20? Uh stair-step
Justin Bogard:Yeah, I can see that. Definitely. Yeah.
Elizabeth Sickles:And what are your overall goals? Do you have a housing property management number that you want to get to, or are you looking to get to X amount of markets? What's what is the goal for Patriots?
Joseph Riley:Yeah, I think we'd love to kind of be, uh, you know, in, in the next three to five years gets a couple thousand homes, um, would kind of be our goal and, and located, you know, I tell everybody that, you know, we're the Walmart or the short-term rental industry and that's our, that's our goal. Um, and that manifests itself in couple of ways, one, and, uh, the types of homes that we, you know, go after. We're not only after the kind of million dollar, you know, beach homes and everything else. We're very happy taking, you know, kind of standard homes as well, under management, uh, to the markets where we're willing to go, you know, the big, the kind of big players of Acosta and others are really only interested in vacation markets and kind of major, major urban areas that have a lot of truism like a Nashville. Um, whereas, you know, we're very happy to, you know, play out in the Columbus George's Columbia, south Carolina's, uh, you know, Montgomery, Alabama, all of these kinds of tertiary markets. Um, and that was, you know, again, similar to Walmart, right? Walmart developed the operational infrastructure to work out and, you know, kind of across the country in these secondary and tertiary markets. And then when they showed up on the scene in primary markets, they developed as the operational efficiency and discipline to really kind of crush the larger, uh, operators that had kind of been able to, you know, built a bureaucratic structure that had a lot more fat to kind of draw off of. Um, so that's, that's part of it. And then, you know, uh, the way we resource and man, uh, our markets, again, we don't have as many W2, you know, we're not as kind of, uh, you know, we don't have as much overhead in an individual market. We kind of go in with a lighter footprint, which allows us again to access some of those markets that, you know, companies who have a more heavy, uh, you know, add men footprint in the market, can't justify the overhead required to enter that market. So by being leaner kind of leaner meaner machine, uh, on the ground, we're able to access those.
Justin Bogard:So, Joseph, you mentioned earlier about your company, um, for those of you that are viewing this, uh, podcast on our YouTube channel, did Elizabeth mailers or BrightPath Notes, YouTube channel, uh, the web address for his website is Patriot family homes.com it's www Patriot home charm, sorry, Patriot family homes.com. So I assume, is that the best way for them to get a hold of you that if they want to, you know, invest in the company or if they need, um, short-term space.
Joseph Riley:Okay. Yes. Yep. They can reach out there. There's a contact us form. And again, you know, for property owners, we are happy to work with you on a couple of things. We can, you know, lease your property if you want to guarantee, lease and turn around and sublease it as an Airbnb. Or if you're looking for a management partner happy to manage with you. And then on the management side, we offer full service package and a digital only package. So if you're, you know, if you live in the local community, you've got a great cleaner, a great handyman enjoy kind of doing a lot of the stuff on the ground yourself, but may we need help with pricing, guest, communication, you know, marketing and a lot of that stuff, then we can, we can do a digital only package for you as well.
Justin Bogard:That's awesome. So besides Indianapolis, do you have any other markets that you're, that you're eager to get into?
Joseph Riley:Uh, yeah. I mean, we're looking in Indiana specifically. We're also looking at south bend, uh, director of acquisitions is in south bend. Uh, and so we're looking there and then kind of true to our Walmart style. We've long had Kokomo and a few of the kind of smaller towns that, uh, actually have a very high kind of transient workforce. And as the result, you know, that need then housing. Um, so, uh, yeah, there's a couple of different, you know, we're really interested in some of the, the, the kind of great lakes areas of vacation spots, um, whether for better or worse becomes warmer maybe up there. Uh, and you kind of get some long, so we're interested in some of those vacation markets as well.
Justin Bogard:That's awesome. South bend. That's Notre Dame country.
Joseph Riley:Yes. Yeah. Our director of acquisition, she was a army captain, a west point graduate herself and is married to, uh, another guy who was in, whose is in the army still. And, uh, he's getting his PhD in economics at Notre Dame. Uh, why they're there? They're so very cool.
Justin Bogard:Yeah, definitely. Elizabeth, do you have any last questions for, for Joe?
Elizabeth Sickles:Um, what would be your, obviously you've scaled very quickly, especially being in so many markets in just three years, what is one piece of advice that you would give to our listeners?
Joseph Riley:Uh, uh, you know, as it relates to short-term rentals or I guess anything for that matter, uh, really is important to kind of learn all aspects of your business. So when we're bringing people on the team, I'm a big believer in the Chick-fil-A model, right? So everybody starts out messaging guests, cleaning houses, doing basic handyman stuff, uh, so that they understand all aspects of the businesses. They kind of come up through the ranks. So, you know, if you're wanting to get into this industry, make sure you kind of put in the time to understand all aspects of it. Um, that'd be my biggest piece of advice.
Justin Bogard:That's great advice.
Elizabeth Sickles:There are many moving parts to this.
Justin Bogard:Yes. Yes. Well, Joseph, thank you so much for being on our shelter daily. Really appreciate it. I love learning your story. I hadn't heard it before. I know Elizabeth has. So I really enjoyed getting to know kind of your path from you said around 2017, 2018, to getting where you are today is exceptional growth, especially with the COVID year in between all that as well. So we definitely commend you for where you're at today. Thank you for being on our show.
Joseph Riley:Thank you so much for having me and, uh, uh, hope to join you again some time. Absolutely. Thank you.
Justin Bogard:So this is episode number 17. I'm Justin Bogart with BrightPath Notes and I'm Elizabeth with Elizabeth Maora. All right. See you next time guys. Thanks everybody. Bye. We will show is produced by Justin Bogard and Super E sponsored by BrightPath Notes and Elizabeth, Maora Thanks for listening and watching our show.