The FORT Podcast: Richard Fertig – Founder of Stomp Capital – A World-Class Lesson in STR’s and Why It Might Be The Best Risk/Reward in Real Estate
Richard Fertig, Founder of Stomp Capital, is an innovative Real Estate Developer focused primarily on the Short Term Rental market, creating branded experiences to delight raving fans with his signature “modern hospitality”. Richard shares his proven strategies that continue to bring him financial success with his 59,000+ YouTube followers and 45,000+ Facebook Group members subscribed to Short Term Rental University.
This episode is a Masterclass on how to win BIG in STRs and why it might be the best trade in Real Estate. Richard shares a lesson on vacancy risk & underpriced zoning, how he selects a location and builds pricing power and how he built his worldview on risk/reward at Blackstone. Plus a wild story about Bernie Madoff. Enjoy!
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(02:41) – Richard’s career and his journey into STR’s
(9:07) – Do you have a filter for what you’re going to look for when handed a pile of money and told to “go find value”?
(12:29) – Firing Bernie Madoff
(17:42) – What are some immediate red flags you key in on when raising capital?
(19:18) – Why STR’s? (Short Term Rentals)
(25:10) – Where are these lenders and capital providers?
(28:32) – Who fits into the customer category for the STR space?
(32:03) – What predictions do you have for this space in a decade?
(36:40) – Building Edgecamp Sporting Club in the Outer Banks
(51:39) – What zoning matters and how do you get comfortable?
(1:03:35) – What should the average STR owner be thinking about with ordinance?
(1:05:35) – Mispriced Zoning in The Hamptons
(1:09:15) – How are you managing your properties?
(1:12:48) – Are you hiring 3rd party consultants when you’re cultivating the experience?
(1:14:14) – How are people finding and booking your properties? How do you think about the risk from 3rd party booking agencies eating into your margins?
(1:18:03) – What matters to you in a market when thinking about experiences?
(1:22:54) – How are you structuring your deals?
(1:24:33) – Are you building your own tech?
(1:25:54) – How do you think about cash flow streams when your properties tend to be seasonal?
(1:29:10) – Final Thoughts
(1:31:57) – How can people find you?
Episode Summary
Fertig offers listeners a panoramic view of the ever-evolving dynamics of the real estate market. At the heart of Fertig’s strategy is the pivotal role of zoning in short-term rentals. By meticulously selecting zones with favorable regulations, investors can carve out a competitive edge, transcending the basic metrics of square footage or property comparables. Fertig emphasized the longevity of this advantage, painting zoning as a timeless strategy in real estate optimization.
The conversation swiftly transitioned to the multifaceted world of property rental platforms. While Airbnb’s rise to prominence is undeniable, platforms like Verbo, with a longer-standing presence in vacation rental markets, hold their ground. Fertig’s astute observation highlighted the importance of diversification in platform strategy. Drawing parallels with e-commerce giants like Amazon, he advocated for direct relationships with customers, emphasizing the long-term value of localized branding and customer retention.
Fertig’s insights into customer profiling stood out as a testament to his seasoned expertise. Recognizing the varied needs of different clients, he spoke of the importance of tailored experiences. By integrating complementary services into property offerings, property managers not only enhance the visitor’s experience but also tap into lucrative revenue streams. Fertig’s narrative underscored the importance of a customer-centric approach, blending real estate offerings with experiential services for unparalleled value.
Delving into the challenges of property management, particularly in high-demand locales like Jackson Hole, Fertig shed light on the complexities of balancing luxury with sustainability. His seasoned perspective illuminated the nuances of local regulations, market dynamics, and the significance of community involvement. The dialogue highlighted the pivotal role of local partnerships in offering enriched customer experiences, making it an indispensable aspect of modern real estate management.
A noteworthy segment of the conversation revolved around the broader real estate landscape. Fertig’s holistic view touched upon market dynamics, innovative technologies, and the evolution of investment strategies. Emphasizing adaptability in a rapidly evolving market, he spoke of the increasing role of data analytics, technological integrations, and the sheer importance of staying ahead of the curve.
The intricate balance between risks and rewards in real estate investments was meticulously dissected. Fertig shared invaluable insights on capital management, due diligence, and the multifaceted challenges of fund management in the sector. By striking a balanced approach and understanding market trends, investors can optimize returns, ensuring sustainable growth.
The Fort is produced by Johnny Podcasts