Latest / The Modern Hotelier / #323: Making Hotel Ownership and Commercial Real Estate Investing Accessible | with Davonne Reaves
Transcript
- The Modern Hotelier #323: Making Hotel Ownership and Commercial Real Estate Investing Accessible | with Davonne Reaves === David Millili: Welcome to The Modern Hotelier, the most engaged podcast in hospitality. Don't forget to like, subscribe, and let us know in the comments what you think about today's episode. Steve, do we have on the program today? Steve Carran: Yeah, David, excited for this one. We have on Davonne Reaves, the founder and CEO of The Vonne Group & Vesterr. Thanks for joining us, Davonne. How we doing today? Davonne Reaves: Thank you for having me. I'm excited. David Millili: All right. So Davonne, we're gonna go through a lightning round, some quick questions. We're gonna dive into your background, your career, and then some industry topics. Sound good? Davonne Reaves: That sounds fun. David Millili: Right, so when you were little, what did you want to be when you grew up? Davonne Reaves: An ice skater. David Millili: Well, okay. Davonne Reaves: You weren't expecting that, were you? David Millili: No. That's a good one, though. That's the first one we've gotten. So what's something that you wish you were better at? Davonne Reaves: Ooh, that's a good one. Something I wished that I was better at. Oh, not being a procrastinator. David Millili: Okay. Davonne Reaves: I'm a procrastinator. Would say that's, I put that on my New Year's list every year to get better. David Millili: All right. So what's a luxury you can't live without? Davonne Reaves: Ooh, a luxury that I can't live without. I'm just gonna keep a simple one. A car, 'cause David Millili: Okay. Davonne Reaves: to some people. So a car and a house. I don't wanna live without those two. David Millili: All right, so name a person, dead or alive, that you would like to take to lunch. Davonne Reaves: Aw. You know what? I would like to take my dad. Yeah. He's no longer with us, but I would love to take ... I have so much to catch him up on, you know, so David Millili: I hear you. If you could have a superpower, what superpower would you like to have? Davonne Reaves: To magic, create stuff, create money, create-- Have the ability if I think it... I kinda have it, but more defined. Like, if I think it, it just come. I could just zap and be like, boom, a million dollars, zoom, right there. I'm in Paris tomorrow. Boom. Right-- Well, not Paris. I don't like Paris. I'm in Fiji tomorrow, boom, with my son, and I just snap my finger. That's the superpower. I just, bloop, there you go. David Millili: You had me at the million dollars. All right, name something that's on your bucket list. Davonne Reaves: That's on my bucket list. oh, to go to Fiji and Bora Bora. That's on my bucket list. Steve Carran: Very nice. That superpower would've come in handy with that big Powerball recently. That would've been nice. So now we're gonna dive into your background, a little bit about what makes you tick. So you were born in Philadelphia, and then you moved to Jonesboro, Georgia. Davonne Reaves: Yeah. Oh, you do your research. Steve Carran: Of course, do. I have to. So, how did being born in Philadelphia, then moving to Jonesboro, really shape you into who you are today? Davonne Reaves: Definitely different dynamic. I know David, you're from Pennsylvania too, so moving from the North going to the South is completely different. It's more bugs in the South. I had to get adjusted of not getting cheesesteaks when I want it. That was very hard for me moving down here. You know, starting over with friends. But I've been in Georgia for so long, this is definitely home now. I still have a lot of family in Philly, so I call that home. But the biggest change would be, it was an introduction to the hospitality industry that I didn't know of. So it set up... It, me moving to Georgia definitely set up my life and my career of getting involved in the hospitality industry. David Millili: Great. So what led you to attend Georgia State University and pursue a degree in sociology? Davonne Reaves: One of my friends, when I graduated from Jonesboro, so I was also in the band, and one of my friends, she attended Georgia State. And so I went with her on, like, a, I guess a tour or something. And I was like, "Oh, I really like this. I like the campus." I was a grandma's girl, and so I really wanted to go to, like, I think it's called San Jose University. I wanted to go to a school in California 'cause I love Northern California, and my grandma told me no. So, and there was another school I wanted to go to. My mom told me no because that was her rival school, 'cause she went to Clark Atlanta, and I wanted to go to Spelman, so she's like ... So I didn't really have a lot of choices. First they were like, "You can go wherever you wanna go." And then when it came down to it, they were like, "No." So I was like, "Well, I guess I'll just have to stay at Georgi- I guess I have to just attend Georgia State," because it was two hours away from my grandma, and it wasn't that far because she said I couldn't go that far away from her. So that's how I ended up at Georgia State. Steve Carran: That's great. And you mentioned you were in band. You spent seven years as a first chair clarinetist. It seems like you're pretty competitive about keeping your seat. So can you tell us a little bit more about that? And if you picked up a clarinet today, could you still play it? Davonne Reaves: You know what? I bought a clarinet a couple years ago. Steve Carran: Oh yeah. Davonne Reaves: I'm a little rusty, so I gotta get back practicing again. But, yeah, I was very competitive, playing the clarinet. I always wanted to be first chair. Always wanted to be in a top band. Then I moved, start playing the bass clarinet. I was first, first I was second chair, second or third chair, and I didn't like being second or third chair. Then I worked really hard, to become first chair. You know, I practiced so that way I can get selected being in the top bands and district bands. And then when I put it down when I went to college. So that was probably one of my biggest regrets, that I didn't continue to play, the clarinet. So now there's like this Instagram page and Facebook group for clarinetists, so I still, I still stay in tune with my clarinet folks. Steve Carran: Well, next time you come on, you'll have to play us an intro song to come on. Davonne Reaves: You know what? There, that is, David, there we go. David Millili: Yep. Davonne Reaves: Steve. David Millili: But Davonne Reaves: that. I could, I can come up with my own little tune. That is a great David Millili: Yeah. Davonne Reaves: I'll practice for that. Steve Carran: Come up with a modern hotelier theme song for us on the clarinet. That's what we need. Davonne Reaves: Go. Steve Carran: Well, that's great. So now we're gonna dive into your career, how you got to where you are. So you mentioned you were very close with your grandmother. She's actually the one that got you passionate about hospitality. Is that correct? And can you tell us more about that? Davonne Reaves: She did, I think, without realizing it. Same thing for me. So when I was growing up, I spent a lot of time with my grandmother when I was in Georgia. She lived two hours away from us, two hours south, and she was very hospitable. Her house was just, everyone when they came to visit, they always stayed at my grandmother's house 'cause it was nice and clean and, and, you know, she just spent a lot of extra details just to make sure that you felt welcome. And she was, you know, of course older, and I was there, so she put me to work. So I had to cook and clean you know. So I'm basically, I guess I'm learning all that hospitality experience, without realizing it. You know, making sure that people have a comfortable stay, you know, making sure that people just feel welcome and just have a great experience. I mean, still to this day, people talk about just them visiting my grandmother's house. That was the impact, and she's been gone for several years. Even when she had her house in Philadelphia, before she retired to move to Georgia, they still talk about visiting her house in Philadelphia. So that was the impact that she's had. You know, people who stayed at her house 50 years ago, and they still remember, right? And so she was... That was that introduction, and she always taught me to treat people better than how I wanted to be treated. And so when you're in hospitality, that's essentially what you're doing. You know, you're welcoming people into your home, or you're welcoming people into your hotel, and you wanna make sure that they have a comfortable stay. You wanna make sure that they have, you know, an incredible experience, and you just wanna make sure that they just feel nice and refreshed and they feel at home. It's like a home away from home. And so that was my introduction at a young age, that's been instilled in me to this day. David Millili: That's great. And so you began your career, at the Hyatt Regency Atlanta. You worked your way up to the front office lead. Now that we know how competitive you are, we know why you won the Hyatt All-Star competition twice. So what did those early years teach you that you still take with you to today? Davonne Reaves: You know what? Working in a hotel, for those who know, you see the people who you work with more than you see your family. And I was at school, so I saw them. I was at Georgia State at the time when I started, and so I saw folks at the Hyatt more than I saw my classmates. And you just build those relationships, and some of the folks were competitive. I probably was a little bit more competitive, especially when they had contests, whoever can sell the most-- whoever can get the most upsells, David Millili: Right. Davonne Reaves: whoever can, you know, get their name recognized the most or, you know. So that was me always trying to find, you know, different ways just to be the best and to be number one. If my name wasn't on the leaderboard, I was just like, just very frustrated. But, you know, working in an entry-level position, in a hotel, it helped me become a better owner. You know, or when I work with other people and help them, become owners, to think, to think about, you know, the folks who work at the hotel, right? Because a lot of times when you get to a certain position, you forget about the frontline employees. They're just a number. But you don't realize that those folks are really taking care of your guests, and they're, they're taking care of your hotel. They're working twenty-four/seven. You know, they're sacrificing time with their family and, and loved ones and friends and life, and, you know, so that way you can enjoy the luxuries of the world, right? And so I look at things, you know, differently. Like if I go, if I was to visit, you know, my hotel, I remember, you know, if we did a good job, we just got regular pizza. Well, I'm not gonna do that, right? I wanna make sure... I'm gonna get you if you want-- I'm gonna ask you first what you wanna eat, and then I'm gonna get you the best of that, right? So if you want pizza, I'm gonna get you an upscale, you know, so that way you can know that I appreciate you. And then there was a night audit. I went to visit my hotel, and it was night. It was just her. And I was like, "What do you want?" And she was shocked. She was like, "What do you mean?" I was like, "What do you want?" And she was like, "I want Arby's." I'm like, "Girl, I'm about to buy you something to eat, like, what do you want?" And she was like, "Oh, okay, well, I want Japanese." I'm like, "Tell me what you want." And because I just wanted to show them, you know, my appreciation or will, you know, we changed the background of, you know, the back of the house. It was dull. It was, it was a boring, it was depressing when I went to tour it, and I was like, "This is making me depressed, so I know it's ma-" And so they didn't ask for it, but it was just that little touch, to let them know that, you know, I appreciate them, but I wouldn't have never thought about that if I never worked on the front line, and, you know, when they- You have to walk guests and, you know, when they have to, you know, come in at, you know, 3:00 and night audit called off, and now, you know, they have to stay until 7:00 in the morning. So those little things, if you've never been in that position, you, you're just... You, and when you lay them off or when you have to, to lay them off for, for certain reasons, unforeseen reasons, You wanna make sure that you take care of your employees just as you would your external guests, so that way they can take care of your guests, and that way they can take care of your hotel. Steve Carran: Absolutely. Well said. Well said. So after that, you moved into consulting with Horwath and Asset Management with CHM Warnick. What sparked your interest in moving from the operations side to asset management? Davonne Reaves: So I was a part of a organization called, the American Hotel Lodging Association Under 30 Gateway. And I thought I was just this superstar, you know, at the Hyatt, you know, I'm moving up, I'm gonna be a general manager one day. Like, so then I get around other under 30 professionals, they're like senior vice president this. I'm like, "Whoa." I had a very humbling moment. And then some of them owned hotels, and I was like, "What do you do?" And they was like, "Oh, I develop hotels." And you're like, "Wait, what?" And so that was the, like the ding, ding, ding. It was like the aha moment. I was like, "You can own a hotel? Let's talk about this." And so from there like, "Okay, that's what I wanna do. I wanna own a hotel." And, like no money at the time. Of course, my family and friends, especially my dad, thought I was crazy. They was like, "How do you... Like, where are you gonna get the... Don't you need money?" I don't know, you know. Delusional, right? And so it was an opportunity. It was... I always say, a coincidence is just God's way of being anonymous, right? And so it was my old, one of my old friends, I brought her in as an intern for the Hyatt, and she was on maternity leave. She was working at Horwath HTL. She left on maternity leave, and she was like, "Hey, Dayvon, do you want this position?" So it was a non-paid internship at Horwath HTL, and it was hotel consulting. And in my mind, I said, "Well, let me just take it," because that would be my introduction to hotel ownership because I didn't even go to school for, you know, real estate or finance. I didn't have that background to get into the transactional side of the hotels. So I was able to take that position. Of course, everyone thought I was crazy because who takes a non-paid internship after they graduate from college? So I worked there in the morning, I worked at Hyatt at night, and I'm like reading through feasibility studies. You know, I'm taking a break of, you know, dealing with the guests. And so that just changed my whole mindset of hotels, right? And so I left Hyatt and then stayed on with Horwath. They kept me on. The internship was over. So I stayed with them for two years, and then I moved to Boston and worked for CHM Warnick. So just larger firm. I'm sure a lot of folks heard of CHM Warnick. At the time it was CHM. And, you know, working on multimillion dollar hotels. The portfolio I was helping the asset manager was like a billion dollars at the time. And so that was like my introduction of, okay, this is what hotel ownership looks like, you know, at that level, right? Of dealing with convention style hotels, luxury hotels. And so, that was a good start and a good transition from operation. Of course, it was completely different, you know, I, trying to understand the complexities of a P&L, 'cause the level that I was at, we weren't looking at P&Ls or anything. You're looking at the star report. So the complexities of the star reports, and the P&Ls, and understanding PIPs, and the brands, and the interior design, all of these different components that you need to buy and develop a hotel, I was learning that, working at consulting firms. Steve Carran: Great. David Millili: So you then founded a couple of companies. What inspired you to launch the Vonne Group and then a few years later, the Vesterr? Davonne Reaves: I've always been an entrepreneur. I even used to-- I was like the candy lady in my neighborhood. So I would buy ... My grandma had a Costco card. I used her Costco card, and I bought candy from Costco, and I would sell candy in my neighborhood, and then I would sell candy in class. So I was always the entrepreneur, at heart, and I just didn't realize it. You know, I always had a little hustle in me. And so, 2017 I was like, "Okay, you know what? I'm finally gonna do it." I was like, "I'm gonna become an entrepreneur." And I moved back to Georgia, and then that's when I started The Vonne Group. And actually, really, I wasn't thinking about really becoming a full-time entrepreneur. It was my first client. I was talking to him about him and his sister, they own some land, they were talking about, you know, developing a hotel. So I'm just, like, giving all this advice and asking all these questions. And they were like, "Well, send us a proposal." I was like, "What?" Send you a proposal? What, like what do you mean? So I had, like, no letterhead, no company, no nothing. It was like, "Yeah, send us a proposal." And that's, that's literally how I got started. I was like, oh. So I met with one of my friends, she was a branding consultant, and I was like, "Yeah, I need to come up with a company by the end of this week" 'cause I have these, like, two potential clients. So she came up with the Vonne Group. She came up with the pineapple logo. My favorite color is green, so she helped me with all that. And so here we are today. So just consulting people. And in 2019 came more the digital arm, so I took it from a non-traditional way, I guess, of consulting, through, you know, webinars, through in-person events. Social media was really booming back then or changing, with Clubhouse. I was on Clubhouse. And so my consulting, so I was tapping into a market that didn't know about hotel ownership, but they had the money, but they didn't know anything about it. They didn't know they could do it. And so I was like, "Okay, well, I wanna see more people who look like me, more women, get into the hotel ownership and get into the investing space." I had literally no idea what I was doing. I literally was making it up as I went along every single day. And I was just being me. And in 2020, it was COVID, and I met my business partner in 2019, and that's when we acquired the Home2 Suites in Arena, Oklahoma. So that was my first time buying a hotel outside of corporate, right? 'Cause usually it was for other people. And so, you know, raised the ca- All of these different tools that I've learned along the way, raising capital, putting in the right people in place. And so we acquired that property in Oklahoma, and then a year later, acquired two more properties. And what happened was we, during that process, there were folks who wanted to invest more, but I didn't have any projects for them. And then during the process while I was raising capital, it was challenging, and I was like, "It has to be a way for me to raise capital." There were some vehicles, but you either had to be like an accredited investor, and at the time I wasn't. Or you had to be a, you had to have like, a $100 million in your real estate before that. I was like, "Whoa, well, that's not me yet. I can't use this one." And so I was like... And I found one, but it wasn't sophisticated enough and the experience was horrible, and I was like, "Well, if this platform can create it, then I can do it myself." And so that's how I created Vesterr. I created Vesterr because I wanted people like me who needed assistance with raising capital, you know, for their commercial real estate projects, including hotels, 'cause there wasn't a lot of crowdfunding platforms for hotels, and to help others. And so that's why I created it, for people who wanted to invest and then people who wanted to raise capital, and so I just connected those people together through, um... And then got it regulated along the way. So that's how Vesterr came along in 2022. Steve Carran: That's great. That's great. That Clubhouse reference gave me PTSD from COVID. Oh my goodness. Everybody was doing Clubhouse during COVID. It was something. Davonne Reaves: It was something. And I was like the only one in a lot of the rooms talking about hotel ownership. So it Steve Carran: Sure. Davonne Reaves: I was like, "Oh my goodness." I was like, "We need a break." It was my voice was going, this is crazy. But it was, it was a good run. It was a good time. Steve Carran: I bet. I bet. So for those that aren't familiar with Vonne Group & Vesterr, can you share a little bit more about what you all do? Davonne Reaves: Yeah, so The Vonne Group, we are a consulting firm and a ownership group, where we do a lot of educational, events. We do in-person events. We do virtual webinars. We have, you know, virtual courses and programs and coaching and consulting, to get you into hotel ownership. I recently, created... I cloned my brain, and I put it in, like, more of, like, a AI method, so people can reach me, like, 24/7, if they're looking to buy or invest in a hotel or even commercial real estate. And it literally like walk-- like you're, like you're having a conversation with me, and you literally can ask me a question. And we've been getting some really great results. You can analyze a deal, and it'll give you results in less than a minute. It tells you if it's a good deal or not. It sounds literally like me. I'll be like, "Nope, that's not a good deal." Or it'll be like, "What are you doing? You're not listening." Like, it's literally-- People be like, "I feel like you're talking to me. Like you're, you're a little sassy," 'cause I'm a little sassy. And so, it speaks, as a consultant, but it walks you through step by step, right? Just getting into the AI age, and it's either you have time or you have money, right? And so a lot of times people don't have both, right? And so, with the program, I just tried-- I was listening to my audience and what, you know, what people were looking for. First they were like, "Okay, we don't have a... Is there a book on how to buy a hotel?" I couldn't find one, so I wrote one, you know? And then, you know, people, of course, after a while they'll just figure, "Okay, I'll use ChatGPT or Claude or Gemini, you know, to, I could buy a hotel that way, or I could buy a property that way." Yeah, you can ask, but it's going-- you're gonna have a lot of questions that you don't know to ask, right? And so through my AI program, I outline it. I'm basically giving you the questions that you wouldn't think to ask, all right? You know, market research, you know, analysis, you know, questions to ask the brand. So pretty much after you, you know, analyze the deal, it'll give you questions on what you can ask the broker, you know, different loan options. So literally just like a consultant that will hold your hand, except it's just through a AI version. So that's the Vonne Group. And then Vester is a crowdfunding platform, where, as I mentioned before, where essentially we connect the deal sponsors to the investors. We're a member of FINRA, which is the Financial Industry Regulatory Authority. So we're not just a website. We're regulated by the SEC, so I had to go through a lot of compliance, to get approved or become a member of FINRA. And so with that, folks can, or deal sponsors, they can use Vesterr, to raise capital in extension of their marketing arm, to connect with investors or connect with people in their community to invest in their projects. Steve Carran: That's great. That is great. So now we're gonna dive into the thought leadership section of the podcast. So kinda like you mentioned, you created Vesterr to make commercial real estate investing more accessible. What has traditionally prevented more people from participating in hotel ownership, and what advice would you give them to overcome those barriers? Davonne Reaves: I would say the more and more I meet people, the more and more I would say... I wouldn't say it's the lack of capital because I meet a lot of people with money. They just don't know that they can invest. David Millili: Right. Davonne Reaves: So I would say the lack of accessibility, the lack of knowledge, because really, you really can't just invest in a hotel unless you like know other like hotel investors, right? Traditionally, that's just how it's been. Now with, you know, YouTube now and social media, it's a little bit easier and I created, you know, Vesterr and my counterparts. So now it's like, okay, I wanna invest in a hotel, but the first thing is you didn't know that you can invest in it, right? I worked in a hotel and I did not know that you could own a hotel. Like, I just didn't know. I didn't know that it was sitting on real estate. I didn't know it was a franchise. I didn't... All I know is that we were a part of the Hyatt. That's it. And at the time, the Pritzker family didn't own it, so it was owned, you know, but you, I didn't understand the franchise model. I didn't know that, you know, the brands own less than, what, 2 to 3% of their hotels in their portfolio. I didn't know that. So for the average person who's staying at a hotel and probably can afford to buy it, they may not realize that they can buy it. They may not realize that even if they can't afford to buy the whole property, they have enough to invest in it, you know? And so that's where that knowledge and that's where the accessibility comes in. Steve Carran: That's great. David Millili: That makes sense. So crowdfunding can create a new path into hotel investing, but access doesn't automatically make an opportunity a good investment. So what should first time investors evaluate before committing their money to a hotel deal? Davonne Reaves: That is a great question. I tell people the biggest thing is to the sponsor, I see a lot of mistakes happen with that. They invest in... They're like, "Oh, okay," they get excited, they invest in the hotel. But check out that sponsor or that deal sponsor and do they have experience in owning a hotel or operating a hotel? And even if they don't, check out the team members that they brought on, right? You know, did they bring on, you know, a consultant or an asset manager? You know, are they ever gonna, you know, get approved by the brands? You know, so ask those tough questions like, you know, what's the exit strategy? You know, when I'm gonna get my money back? You know, just how am I gonna get my money back? Keep it real simple. What, when, where, how, who? So what's the project? Where's the project? Who's responsible for this project, right? How am I gonna get my money back, and when I'm gonna get my money back? And a lot of times asking those basic questions to start off with, can help you, you know, determine-- Of course, you wanna do your due diligence. If you don't know, you know, work with your legal professional, right? Work with your CPA. You know, work with other people who have invested, you know, in hotels or commercial real estate. And a lot of times the people who you're working with, they get excited and they've never operated a hotel. They never owned a hotel. They've only stayed in hotels, right? They're not even invested in one. And they come from maybe the multifamily world or the retail world and they're using their same brain from the retail or multifamily world into hotels, and that's two different completely brains, right? And so you need, you wanna look at their team and are they this... Well, 'cause that really at the end of the day, there's three things that makes a hotel successful, right? It's the location, one, 'cause it's real estate, brand, and then the operator, right? And so those things that you wanna look at is, well, is it in the right location? Are there demand generators? And I always try to look at multiple demand generators is now since we're post-COVID, because if you just relying on one demand generator and that something happens to that demand generator, then how are you gonna... how is that hotel gonna be profitable, right? You know, does that brand work for that location? 'Cause sometimes people pick the wrong brand for the wrong location. A lot of times people wanna create their own brand. We don't need another one. We have enough brands. But, so they wanna create their new brand, instead of looking into soft brands. I can see if it's like 15 rooms or less that, that makes sense if you wanna create your own brand. But, you know, is it the right brand? Meaning if there's a whole bunch of, you know, Hiltons in that particular market, and now you about to invest in another Hilton. Okay, maybe you should do a Marriott, right? You know, what brand works for that particular market. And then the biggest thing is the operator. The operator can make or break the hotel regardless if you got the right location and the right brand. It could literally be a hotel on, you know, South Beach and the operator sucks, and nobody ever wants to come back to that hotel because it's just horrible. So they're like, "I'd rather just stay some..." It... Because it's an operator issue, right? So who's gonna be operating that hotel? You know, are they bringing a management company? Are they gonna self-manage? If they're gonna self-manage, do they have the right people that's gonna self-manage the pro... You know? So those type of questions I would ask, to first-time investors. I mean, I would want first-time investors to ask. I want them to ask me or ask anybody else. I tell them that because, you know, hotels are capital intensive, right? You know, it ranging from five, six to seven figures of a minimum investment. And it's very risky. A sexy asset, but it's risky. Hotels are very unpredictable. As, you know, I'm talking to hotel folks, so y'all know it could be great one year and horrible next, right? So you wanna... and always tell folks you wanna invest what you can afford to lose, right? Don't invest your life savings. Don't invest you saving up for a down payment for a house and you think... No, no, no, no. Don't. Mm-mm. I've turned several investors away because of that, because it's just a complicated asset, and you could potentially lose your funds. So that's what I tell. I hate to be, you know, raw and honest and, and it sounds ugly to some people, but it's rather for me to tell you now and then five years down the line, then it's, it's a different story, you know? Steve Carran: I think everybody would appreciate the raw honesty with that before they lose all their money. So, in your book, How to Buy a Hotel, you break down what can feel like an intimidating acquisition process. Oh, I'll hold off till- There it is. There it is. So I'm somebody who would love to own a hotel day. So where should an aspiring hotel owner begin, and what part of the process do a lot of people underestimate? Davonne Reaves: Well, Steve, when you get your hotel, you have to have a podcast studio. So Steve Carran: There we... Absolutely. Absolutely. Davonne Reaves: Like, a content room, okay? You cannot have a hotel without having that. Steve Carran: Deal. Davonne Reaves: The biggest thing that you want to do to start off with is, putting together what I call a investment thesis or your buy box. So essentially, you know, I always try to bring it back to the basics. Just like you, when you're buying a house, know where you wanna buy it, know, you want-- you have an idea of how many rooms you want, you have your budget. Okay, this is how, this is what I want. Same thing with the hotel, okay? I wanna buy a hotel in this specific area. This is my budget. And how you can come up with your budget is how much you can get financing for, and then how much you can afford to put a down payment. So if you can only afford to put a million dollars down payment, then you, the hotel prices you need to look for are about 5 million or less, because you need to put 20% to 30% down. A lot of times people have Four Season dreams, but they have Days Inn budget, you know? So you gotta, you gotta stay in your lane, you know? You gotta stay in your lane. David Millili: That's funny. Davonne Reaves: You have to start there, right? So if all you can afford is a Days Inn, that's where you start, and then you move up to a Four Seasons or a St. Regis or something like that, right? So start with your buy box. What can you afford, the location. Also, what type of hotel, right? I typically recommend for first-time hotel owners and investors, to start off with economy, extended stay, limited service. Start off with those type of hotels. Understand the processes, you know, that way you can get a loan. 'Cause basically you're asking a bank, "Hey, I never owned or operated a hotel, but I want you to give me $10 million." That's essentially what you're saying, but if you put the right team together, and maybe instead of 10, it's like 5 million, but I have the right team and a really good general manager, right? So those are things that I would recommend for a first time, for you, Steve. Find out where you wanna buy, what type of hotel. Do you wanna do extended stay? Do you wanna do limited service? Do you wanna do select service? Work with hotel brokers in that particular area. So if you wanna do, like, Mid-Atlantic or, or Midwest or maybe you wanna go to the Caribbean or wherever you wanna go, with brokers who understand that market, and it makes their job easier if you let them know what type of hotel you're looking to buy. This is my budget. are the brands that I'm looking for. This is the location. Then they can start sending you hotels, right? And then you'll start analyzing. So let's say you want, you looking for hotels that'll generate a two X multiple or two X, I mean, equity multiple, meaning if you invested a million dollars in equity, you'll get two million when you sell it. That's what I mean, two X, multiple. So that's what you're looking for, okay? So if I'm doing... And then of course you use my AI program. So you'll put the deal in the program, you'll put the OM, the offering memorandum, you put the financials, you put the pro forma, see how it'll work, see if the deal makes sense based off of your return, 'cause everybody return is different, right? So maybe you focus more on equity, maybe you wanna focus more on cash flow, so that's something that you have to think about, right? You know, do you wanna bring in a management company? If you bring in a management company, then they'll probably have to generate like, you know, at least 2 million, 1.5, $2 million or more in revenue, right? So those are the things that kind of a part of your buy box. If you're like, "Ooh, Davonne, I just wanna focus on my podcast and then my hotel, I'ma have a management company that's gonna operate it for me, and I'll bring an asset manager." And so it's like, okay, you have an idea of what you're looking for, so now we have to find a hotel that best fits your criteria. It just, it makes it easier for looking for the property, it makes it easier for analyzing the property. And then it just makes things a lot easier. Yeah. Steve Carran: Great advice. Great advice. David Millili: And it's a great segue to the next question. So you've talked about how you're using AI. Where should the human still remain and not rely on AI when it comes to the acquisition and investment process? Davonne Reaves: I would say going and visiting the property. David Millili: Great. Davonne Reaves: Like, still walking through the rooms, still talking to the employees, still doing your market research, still really going to the market. I don't think AI is gonna replace that. David Millili: Davonne Reaves: Yeah, you're just going-- regardless if you're lazy or not, you're just gonna have to get out there and just tour the property. It's, I don't think you can get away. You can analyze it through AI, you know, you can do your market research through AI. You can... If you don't feel like reading the appraisal, you can just put it through a software, it'll analyze it for... All of that, you can do that through AI. Some things you just can't get away with, and that's going to the property. And then the financing part, right? So you gotta find lenders. You can't get away with that. You know, talking to the brands, you still gotta talk to the brands. Still the franchising, all that fun stuff that you gotta do, that's not AI yet, so you still gotta... So some things you're just gonna have to do, you know. And operate the hotel. Like, you still gonna have to get down and dirty, and I mean, somebody's gonna have to clean the rooms. So until you, you know, I've seen the robots where they cleaning the rooms, but you know. And then some hotel, like, I think they had one time the automatic, It wasn't the same. David Millili: Yeah. Davonne Reaves: You can't talk to a robot. You don't want to talk to the robot, right? So I think they had it where you could check in, it was a person in India. So some David Millili: Jeff. Davonne Reaves: You can't get around it. I don't think AI is gonna completely remove a lot of things. But I think like a lot of the paperwork. But like you said, hospitality is still human. It's still human. Like, we still wanna talk to people. And technology messes up just like people mess up. But know, sometimes people, they just wanna talk to a person. Just like when you call the 1-800 number and you're like, "Live person!" Steve Carran: Yes. Yes. David Millili: Yep. Davonne Reaves: The same thing. David Millili: That's me. Davonne Reaves: "I want a real person," you know? So I don't think AI's gonna get rid of that. Steve Carran: Oh, man. That's great. That's great. So what advice would you have to the younger generation or younger women out there that are interested in being an entrepreneur? Davonne Reaves: I would say be authentic, be yourself. And sometimes as women, guys, y'all don't have to get, y'all don't understand this part, but sometimes as women, we have to prove ourselves. And I would say just continue to be yourself and work hard and don't give up. I don't think I would be where I am and where I wanna go if I gave up, or if somebody told me I couldn't do it because I was a woman, or I couldn't do it because I was Black, or I couldn't do it 'cause I was young, and, you know, all these different things that I was told that, you know, I couldn't do it. And, I was, uh, you know, disrespected, because of what I looked like. You know, and I just didn't take that. I kept going. And if somebody told me no, somebody else is gonna tell me yes. So I'ma leave you alone 'cause you told me no, and I'm gonna go to somebody else. And that's just the mindset that I have is just to, you know, just to keep going. And so, for the young, young women and young entrepreneurs, it's just to, keep going. You know, don't make excuses. I feel like the younger generation, they make so many excuses. It's like, my son even doing it. He's seven. I'm like, "I'm about to stop this right now, okay? You're not, we're not doing this, okay?" Making excuses. Like, you have to work. You cannot get... Like, you have to work. It is just, it's just a part of life. And, so for the, just the young people, to, you know, keep going. Don't be so hard-headed, you know? I feel like some of the young people, they just feel like they know everything. I'm like, "You don't." I have to tell my son, I'm like, "You're seven. What do you know? You can't even drive. Like, you don't have a, you don't have a license." And so that's how I feel about the young peoples. Like, you know, even though times may be different, you know, we've gone through things. Like, David, you trying to tell me about a hotel. You know more about hotels than I do, so I'ma listen, right? And sometimes I feel like with the younger generation, they feel like that they know everything. Google can't tell you everything because Google don't be in there checking in guests. Dealing with the irate guests. So sometimes they may not be able to help you understand how to handle a situation because situation is different. Until you get that real-life experience, I would say that. 'Cause a lot of times I meet, like I said, I meet entrepreneurs, and they wanna become a consultant, and they just graduated from college. What are you gonna consult on? Like, you don't, you don't have any experience. So I would say take the time to learn, get the knowledge, get a mentor. Don't rush. Bills are gonna be here for the rest of our lives. Like, it's, it's not-- We're gonna-- Once you become an adult, you're an adult for the rest of your life. So don't rush into, it's gonna ... Just be present, focus on the present, and just do the best that you can. So that would be a long-winded advice for young folks. Steve Carran: Great advice. Great advice, and well said. So, well, we've been asking you questions this whole time, so this is where we turn the tables and let you ask David and I a question. Davonne Reaves: Oh gosh. All right. I'm gonna start with you, Steve. Steve, what was your first job? Steve Carran: I had two first jobs. When I think I was 13, I would work at a strawberry patch in the morning, and then... Which was fun. I love strawberries. And then after that, I would go to McDonald's and work, and that was my least favorite job I've ever had. So Davonne Reaves: Yeah. Steve Carran: Those are my first two jobs that I had. I'm pretty sure that's breaking some labor laws, but somehow we made it. Davonne Reaves: Wait. Steve Carran: Somehow we made it. Davonne Reaves: So what did you do at McDonald's? Steve Carran: I worked the drive-through. The, when I first started, I was the fry guy, which was, you know, 100 degrees humidity in Wisconsin and you're standing over the fries all day, was not really enjoyable. But then I worked the drive-through, the cashier, all that fun stuff. So, and the ice cream machines are down all, or were down Davonne Reaves: I Steve Carran: all the time. Davonne Reaves: On McDonald's ice cream. I just go to Chick-fil-A. I Steve Carran: There you go. There you go. David Millili: That's funny. Davonne Reaves: David, now I know you. What was your first job? David Millili: I worked, when I was 14, I was what they called a dietary aide at a nursing home. So I basically served food to old people, and the worst part of about that job is there was a cafeteria where you'd serve food, prep it and then serve it, but every... Like, they would pick one person, like, every shift to go upstairs, and upstairs was the crazy people who couldn't come down to the cafeteria. So I used to have to every, you know, couple weeks deliver food to crazy old people that were screaming and, and... It was the first job, and it was the... Davonne Reaves: That sound a lot. David Millili: It was a lot. And it was the first job I ever got fired from 'cause I didn't wanna work on Christmas, and they called me up and they said that I was terminated, and I didn't know what that was 'cause I was 14. And so I told my mom, I said, "Hey, they just called me from the nursing home and they said I'm terminated. What does that mean?" And she's like, "Yeah, you got fired." I'm like, "Okay." So yeah, so that was, that was my first job. Davonne Reaves: You started working in the hospitality industry? David Millili: I, when I was in college, a friend of mine told me to go to a hotel to get a job 'cause he was at hotel school. Davonne Reaves: Yeah. David Millili: And then my first job was a, I was a union busboy at the downtown Hyatt in Pittsburgh. Davonne Reaves: Then you had to work on Christmas. David Millili: I had to work on Christmas. Yeah, I learned, I learned after that experience that, yeah, you're gonna have to put your dues in with some of these holidays, so anyway. Davonne Reaves: To work on Christmas. Yeah. Steve Carran: That was a good question. I don't think we've been asked that one before. So, well, our producer, Jon, he's been listening this whole time, so we're gonna kick it over to him for the last question before we get you outta here. Jon Bumhoffer: It's really cool to hear your story, and I'm curious like how, since learning about how you can own a hotel and since, you know, taking the dive into that, how that has changed your life. And then now as you, kind of show people that they can also do that, how you see it like click with other people and see it impact their lives as well. Davonne Reaves: Oh my gosh, it's probably the most surreal thing, when I hear people who invested either in my hotel or other hotels, you know, their, their children. I think one time it was a couple little girls, they dressed up as me for Black History Month. I was like, "What?" Like, I feel... Like, so having that, that moment, and just seeing, you know, people's lives change, because they're getting into hotel ownership or investing, especially when I meet hotel employees, and they see that it's possible. The older hotel employees who, you know, they didn't-- they're just so proud of me, of, you know, owning a hotel, and they weren't able to do it, or they didn't know how to do it, or the funds, or they just couldn't do it for whatever reason. So, them saying that they're just so proud of me is just a beautiful experience. When I go to my son's school and do the career day, and we talk about hotels and just their little minds, all the little hotels that they wanna develop, a Bluey Hotel, a Minecraft hotel, and a slide, and you check in. All these different things that kids, you know, can imagine. So just, it's a beautiful thing. And when I started on my journey, probably almost 10 years ago, I didn't think I would be talking to you all today. How about that? So, it's been a great journey, and I'm proud to say that I created close to 100 Black hotel owners and investors, and I, I'm slacking. I gotta create some more, so. Jon Bumhoffer: That's awesome. David Millili: That's great. Well, that does it for another episode of The Modern Hotelier. Davonne, this is where you get to let people know how they can find out about your companies, how they can get in touch with you, and how they can get your book. Davonne Reaves: Awesome. Okay, well you can find me. I am on social media. It's not that hard to find me. I am on LinkedIn, I am on YouTube, I am on Instagram, I am on TikTok. Davonne Reaves. You can go to my website, The Vonne Group or thevonnegroup.com. And if you wanna learn more about how you can invest or raise capital for your deals, you can go to Vesterr, https://www.vesterr.com/. So definitely looking forward to connecting with you all. David Millili: Great. Well, that does it for another episode of The Modern Hotelier, the most engaged podcast in hospitality. Whether you're watching or listening, we appreciate you and hope to be with you again soon. Thanks for joining us. Davonne Reaves: Thank you. Steve Carran: Thank you.