Acquiring Minds Podcast: "Buying for Brand (Then Growing 4x)"

Host: Will Smith
Guest: Matt Orley, Owner, Red Cottage
Date: January 12, 2026

Overview of the Episode

This episode explores how Matt Orley, an entrepreneur with a passion for branding, acquired and rapidly grew Red Cottage, a regional short-term rental property management company. Matt didn’t follow the traditional "searcher" route; instead, he was drawn to the short-term rental industry through his own investing activities and saw acquisition as the optimal path to scale and differentiate in an increasingly professionalized market. In three years, he quadrupled the business, expanded geography, launched a unique guest membership program, and built Red Cottage into a brand-forward regional powerhouse.

Key Discussion Points & Insights

1. Matt’s Path to Acquisition: Brand Guy Meets STR

• Not A Typical Searcher:
  • Matt had a background in brand development and consumer branding (07:40).
  • During Covid, he pivoted from his W2 career to short-term rentals, starting with 5 self-owned Airbnb units.
• Industry Attraction:
  • Observed rapid professionalization and tech advancement in the STR management sector (08:31).
  • “I was looking for a way to go deeper into this industry… to essentially widen my moat.” – Matt (07:00)
• Targeting Red Cottage:
  • Red Cottage, a business Matt had stayed with as a guest back in 2012, stood out for its brand and quality of homes (20:08).
  • Conducted cold outreach to property managers, including Red Cottage, to pursue off-market deals (20:18).

2. The Acquisition & Deal Structure

• Deal Details:
  • Red Cottage was doing just north of $1 million in revenue, mid-6 figures EBITDA, with 50 units and 2 employees (22:12).
  • Structured as an all-cash deal at just above 4x SDE; no SBA loan used (30:52).
• Brand as Differentiator:
  • Matt’s pitch won the deal over institutional buyers: “My pitch at the time was I love this brand… These other buyers are just going to roll your portfolio into their platform.” (20:18/30:17)
• Curveball at Closing:
  • Seller requested an extra $100K for transition support right before closing—Matt refused. “It was absolutely egregious… it kind of bait and switched a little bit.” (46:17)

3. Transition & Early Operations

• Transition Challenges:
  • No meaningful owner transition; Matt had to quickly integrate himself in the business, moving temporarily to the region (49:27).
• Team & Culture:
  • Inherited two employees, both stayed and became key to future growth (55:54).
• Operational Overhaul:
  • The business lacked communications structure and tech; Matt prioritized integrating modern tools and processes, emphasizing the importance of communication with guests, owners, staff, and vendors (51:04).
  • “I sort of say often I think it’s more a communications business than it even is a property management business…” (51:04)

4. Growth & Scalability: Evolving Red Cottage

• Initial J Curve:
  • Profits softened for 18 months due to reinvestment in tech, staff, and systems post-acquisition (56:49).
• Expanding the Portfolio:
  • Through both organic growth and further acquisitions (often earn-out structured), Matt grew the portfolio to over 200 homes (58:32).
  • “We’re basically running at half capacity… We can absolutely, without changing our cost structure in any meaningful way, get to that kind of scale [500 units] in the next, you know, year or two.” (61:43)
• Attractive Deal Structures:
  • Small upfront payment, with bulk as earn-out, based on future commissions. Sellers want their portfolios integrated with a strong brand (59:36).

5. Brand, Loyalty, and Direct Bookings

• Direct to Consumer Model:
  • About two-thirds of bookings come directly through Red Cottage’s site, not via Airbnb or other OTAs (29:13).
  • “I think the biggest compliment anyone can give us is when they go to our site and say, I thought you were a channel. I didn’t realize you were actually a management company.” (29:13)
• Membership / Loyalty Program:
  • Launched a unique $500/year guest membership:
    • 10% off all stays; waived fees for frequent stays; early access to new homes; perks at local businesses; monthly flash sales (65:16).
  • “We’ve sold hundreds of these memberships and we have a recurring revenue stream now that didn’t exist before… it has transformed our business entirely.” (65:07)
• Loyalty by Geography:
  • Frequent stays from urbanites take repeated weekend trips—a dynamic leveraged for deeper customer relationships and more opportunities to cross-sell (27:09/28:15).

6. Professionalization & Industry Trends

• Fragmented and Early Stage:
  • The STR property management industry is still in “early innings,” even if Airbnb is mature (10:16).
  • High fragmentation; most players have small portfolios, which are increasingly hard to sustain due to operational complexity and tech investments (23:41, 74:17).
• Brand Elevates Value:
  • Strong brand allows smaller portfolios to “punch above their weight” in perception and helps with organic owner acquisition (41:57).
  • “Our competitors were like New Jersey Beach Cottage for rent dot com. That’s what the property management space looked like for so long.” (41:57)
• Scalable Model:
  • Now positioned for roll-up opportunities, acquiring smaller portfolios efficiently and integrating into the Red Cottage platform/brand (59:36).
• Market Opportunity for Searchers:
  • Still day one for ETA buyers—look for portfolios of 50+ homes; being disciplined on geography and brand coherence is key (74:17, 78:12).

Notable Quotes & Memorable Moments

“I was looking at this business thinking, this is a great brand. … There was a lot of opportunity to do something with that kind of company and that kind of portfolio.”
— Matt Orley (20:18)

“It’s more a communications business than it even is a property management business… The communication is so critical to each one of those groups.”
— Matt Orley (51:04)

“I think the biggest compliment anyone can give us is when they go to our site and say, I thought you were a channel. I didn’t realize you were actually a management company.”
— Matt Orley (29:13)

“We’ve sold hundreds of these memberships and we have a recurring revenue stream now that didn’t exist before… it has transformed our business entirely.”
— Matt Orley (65:07)

“It was absolutely egregious… it kind of bait and switched a little bit.”
— Matt Orley, on seller’s last-minute $100k ask (46:17)

“You have a vision. You’re visionary about the industry and your own brand within it. You’re bringing new products to market in the form of the membership, the loyalty program… it seems like you’re at the forefront of a trend in a hot industry.”
— Will Smith (83:07)

Important Timestamps

• Industry & Brand Background: 07:00 – 12:42
• Acquisition Details & Strategy: 14:53 – 22:45
• Deal Structure & Seller Dynamics: 30:52 – 47:54
• Transition & Early Challenges: 49:27 – 55:54
• Growth Trajectory, Direct Bookings, and Membership Program: 58:32 – 67:06
• Geographic Expansion & Brand Coherence: 68:27 – 81:49
• Advice for Searchers & Market Opportunities: 74:17 – 81:49

Key Takeaways for Entrepreneurs & Searchers

• Brand and Authenticity Matter: In service businesses, a strong, regionally authentic brand is a powerful differentiator and growth driver.
• Buy for Potential, Not Just Price: Matt overpaid for traditional metrics but captured massive upside by transforming the business.
• Communication and Tech are the Backbone: Rapid professionalization and customer/service stakeholder comms are critical to scale.
• Recurring Revenue is King: Innovative loyalty products can turn a lumpy rental business into one with predictable cash flow and deeper customer engagement.
• Disciplined Geographic Expansion: Avoid sprawling portfolios; regionality and customer coherence lead to stronger brand and operational synergies.
• Still Room for New Acquirers: Despite growth and some competition, the sector remains fragmented with attractive acquisition opportunities for the disciplined and brand-savvy.

Want More?

• Red Cottage Website
• Acquiring Minds YouTube
• [Matt Orley LinkedIn] (in show notes)

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