How Salon Suites Turn Commercial Real Estate Into Multiple Rental Income Streams | Karen Kaminski

Karen Kaminski (00:00)

And then even the smaller investors, I had this one investor in Ohio, it was Deerfield, and he owned the building and he had 3,000 square feet. And he was like, Karen, he goes, I really want to do this. He goes, I’ll be able to build it out. And I said, Okay, why do you want to do it though? And he goes, Because instead of having one rent, he goes, I could have, how many? So he was only getting $3,000 a month. Now he gets 12,000 because he ended up putting 12 studios in there.

Issa Hanna (00:58)

Welcome back to another episode of the Real Estate Pro Show. I’m your host, Issa Hanna, and today we have Karen Kaminski here to share her knowledge with us. Karen, welcome to the show.

Karen Kaminski (01:06)

Thanks so much for having me. Nice to meet you.

Issa Hanna (01:08)

And I am super duper excited to have you on the show because you have literally created your own niche in the real estate market. And you don’t even come from a real estate background. truly unbelievable. We’re gonna get into that later, but before we start, give me a day-to-day in Karen’s world. How does it start off? How does it end?

Karen Kaminski (01:26)

So get up, have my cup of coffee, my glass of water, watch a couple inspirational videos on YouTube, whatever’s new, whether it’s real estate or, business type setups. Then I go for a walk. I walk, there’s this lake around here, it’s like three and a half miles, clear my head, come back, get ready for the day, come down to the office, go through all of my emails, and I try to leave my mornings or

my business stuff and then open up the afternoons for, whether it’s, a Loris Lawn Group business or if it’s really the consulting business and now with the AI business. And then I usually leave the office about, I don’t know, 5 30, 6 o’clock. But when we’re doing projects, I’m usually on the road traveling to our, the locations. During the summer, we opened up four locations. And then right now those are open and launched and we have three under construction right now.

Issa Hanna (02:15)

Amazing. this concept, you literally pioneered it, right? It’s taking off like wildfire. So for my people at home, Karen is the founder of Allure, right? Allure are Salon Suites and it’s a way for people to just maximize their profit for investors. And then it’s also a way for you people that do hair that are in the salon in the beauty industry to be able to get in at an affordable price.

at a lower risk. So I’m gonna let you take the floor and kinda give us the overview of what you’re actually doing, because I know I might have butchered what you’re exactly doing.

Karen Kaminski (02:49)

Now, so I didn’t pioneer the concept, but I did do it in Pennsylvania. So the Salon Suite business actually started in Texas by a guy named Reza Soji, who is the OG of Salon Suites. And he started the concept. And over the years, you saw, companies like Sola, My Salon Suites, and Salon Lofts come into this market. And what happened was a lot of the states, they didn’t have booth rental. And

This kind of was the alternative to it. But here in Pennsylvania and in New Jersey, there was a space requirement from state boards. So every person who wanted to have a salon had to have at least 180 square feet in space, and they had to have two shampoo or two water sources, a shampoo bowl and a countertop. And then in New Jersey, it was 350 and you had to have a bathroom in there for one person. And that’s why you didn’t see the franchise models get into these two states.

So fast forward is about 2015, and I was a sales rep for Cosmoprof. And we heard in our sales meeting, my God, Solo opened up two locations in Pittsburgh. And then next thing they opened it up in York. And I knew from my training, starting with Cosmoprof back in 2011, that once this takes over in Pennsylvania, I’m not going to have a job. I’m not going to retire. Definitely. So as soon as I heard that, I started plotting my own.

business. And I went to 17 different landlords before one finally gave me the opportunity because they looked at me like I had three heads. They were like, do you know how much plumbing you’re gonna have to put into this space? I go, well yeah, because it has to be to PA state boards. Wouldn’t give me the time of day. And finally I came across this one landlord. His name is Joe Amodel.

And he actually spent most of his time down in West Palm Beach. So Florida, Texas, and California has the biggest concentration of salon suites. And he knew the concept. He loved it. And he was trying to figure out how to do it in Pennsylvania, but he didn’t have the beauty background. So it was like that perfect marriage. And he came in, he built it. I met with his contractors that he had for his locations because he had a bunch of commercial properties all over Pennsylvania.

So I met with them and I said to them, here’s the deal. We always have to have hot water and nobody could blow out each other’s circuits in their room. And I came in, I gave them all my professional blow dryers, my flat irons, curling irons, anything that had to be plugged in. And I said, you need to plug everything in and you need to make sure nothing blows. And they were like, okay, so that’s how we started to develop how the space was supposed to be run.

And we came up with the three circuits. They all had to be wired independently. And I remember the contractor, especially the electrical guy, he goes, Karen, there is, and it was only 4,800 square feet. He’s like, There’s 22,000 feet of electrical wiring in this space. He goes, I don’t think I’ve ever done this in this condensed, but you know what? We opened that location. I started the company in 2016 and I opened that location in June of 17.

And that one to this day is solid. I’ve only blown two circuits, and that was only because the tenants plugged everything into the one plug. And since then we kept expanding. so we have five locations now. we go all the way from the top of the Pennsylvania Turnpike all the way down to the Philadelphia market. And we have about 114 studios that we manage in five locations.

Issa Hanna (06:07)

Amazing. and what a cool story, right? A sales rep for Cosmocroft. I was telling you before, I said a real estate person might not have saw that hole, that opening in that market. It needed that eye. And all good real estate investors are visionaries, and that’s certainly what you are. Shout out to Mr. Amado, is it? down in Florida because he wanted to do it. He brought you in, you had the knowledge, and then you guys literally created the blueprint for it, right? So you figured out.

This is how we do it. And once you create the system and once you start refining your system in any business, you guys, things just start rolling smoother. So now you guys are cornering this Philadelphia all the way to the Pennsylvania market. it’s just unreal to New Jersey. I see that you guys are very calculated in how you’re opening. People are running to you right now and you’re managing for them because you’ve become

literally the top expert in your market at these salon suites. So why wouldn’t they deal with you? and then you’ve developed a way to vertically scare, right? So it started with this business. You’ve grown two other businesses out of this. So give me the other two businesses and how they started.

Karen Kaminski (07:48)

So as I was opening up a Laura Slarn Group, once I opened, I kept getting calls from people random, in other parts of the country, going, Well, how did you do this? And how did you do that? And I would just answer their questions for nothing. I was like, well, this is what I did. This is how the circuits work. This is how we set up the plumbing. this is what Pennsylvania required. but I know this is what Ohio required or whatever, only because of my colleagues within Cosmic Prof. And

It turned into a business. And I didn’t really market myself. Whoever found me, they found me through LinkedIn. And they would call and say, Hey, I’d like to work with you. So then I started charging. And I was like, okay, I’ll give you the exact blueprint of what I did, my paperwork. I’ll show you how to do the layouts, how to maximize your profit on those, and then how to start with the TI money. And one thing led to another. And

when we started, it was really with investors. Now we work with more capital groups and more people who have extensive portfolios because they see the value. And now we’re like a full service consulting firm. So we’ll take, if a portfolio company comes to us and they want to fill the retail of their bottom, residential or multifamily type structure.

We’ll take them right through. We’ll help them create their brand. We’ll design their space. We’ll help them pick out their furniture. I have architects and designers who will actually work with them on the, cosmetic and interior design part of it. But we also give them their tenant handbooks, their license agreements, the do’s and don’ts. And then during their construction phase, usually those people already have their contractors in place. During the construction phase, we’re working on filling it. So by the time they open the doors,

They’re opening at a 50% occupancy rate. And then we’re continuing on, reaching out, our social seeking, we call it looking for people and telling them that we’re coming to the area. And it’s this three-level of, marketing that we do for them. And then at that point, a lot of these bigger portfolios have us continue doing all the property management for them. But some of them take it on themselves because we’ll do the vetting and send all the appointments to the

Person on site to actually do the tours, but then we’ll keep up their social media and just kind of keep running it like we run our own businesses. And we’ve done this successfully this year. like I was telling you before, we opened up four locations in Boston, Massachusetts, Richardson, Texas, North Raleigh, and Cincinnati, Ohio. And then we have three that are still under construction. One’s in Houston, Texas, one’s in Wichita, Kansas, and another one is in

Maryland. And we go through the whole process with all of them. it’s been a great thing, a great, great ride. And then we started the AI business because now we’re able to automate answering the phones and answering the messages that come in through the website looking for information and on their social media. So we kind of came full circle with that so that we’re like a complete one stop consulting firm.

Issa Hanna (10:43)

I love it. and in real estate, people that make things easy, right? Yes. They’re the ones that make the money. They’re the ones that do so well, right? You have the whole blueprint, like I said, you make it easy for an investor. I’m a real estate investor. I’m over here like a satellite listening to everything because all I have to do is give Karen my money, and next thing you know.

She’s making me money. She’s got the blueprint already there. truly, truly unbelievable. And then the AI, how you’ve incorporated AI. I called you a visionary earlier, right? You’re able to spot things beforehand. You’ve incorporated AI into your business so much sooner than other people have because that is the future. it’s going to make it more efficient and easier. At the end of the day, like I said before, guys, in any business, the process.

and the operation needs to be refined, needs to be efficient. The more efficient, the more refined it is, the better it is. it sounds like you’ve mastered the salon suite process.

Karen Kaminski (11:38)

100%. what we noticed in the Selensuite business is beauty pros are very impatient. And if you don’t answer their phone calls as soon as they come in, or if you don’t answer and get them, scheduled for a discovery call or a tour, they’re going to your competitors. So what this did was it actually put in place a person who can answer all those questions. And the biggest thing we noticed was all of the leads that come in after 11 30 at night.

when they’re scrolling at the end, during the night. we’ll wake up and we’ll be like, my God, we have three discovery calls. And that would never have happened because what typically would happen is somebody would call or they’d leave a message on our Instagram. And if our person, didn’t catch it, it would go unnoticed. And you never get them back on the phone after they do this. So what AI has been able to do for us is answers the questions automatically and it

persuades them in a gentle way to, hey, would you like to learn more? Would you like to set up a call and see for yourself how we could work? That has been a game changer. And even on our social media. So it’s like a triangle. We have the receptionist that answers our phones. We have the same agent who answers all of our questions on our social media when people comment. And then we have the same agent on our website so that it’s constantly so we have that little trifecta effect on our business and we’re not losing leads anymore. In fact, we’re getting more leads.

So our advertising dollars that we spend aren’t going, when you throw your advertising money into your ads, it’s just kind of like going into the abyss ’cause you don’t know what you’re gonna get. Now we’re actually capturing them.

Issa Hanna (13:09)

I love it. And yeah, AI will make it, like I said, easier. You’re making it easier. Such a visionary because you’re literally just always looking for a way to better this business, to better your process. if somebody texts me or calls me at eleven thirty at night, my phone’s not around me, I’m not calling them back as a human being till nine AM the next day, right? AI. Exactly. So

Karen Kaminski (13:31)

I’m

sleepy.

Issa Hanna (13:33)

Yeah, a hundred percent. So AI is literally answering the questions, talking to them, warming them up so that way when they do come in, wake up to a booked call instead of a missed opportunity. truly, truly amazing. And I think I could see in your future that’s gonna carry over to different markets, Karen, because if you refine that process and are able to

warm up leads, you can carry that over to the real estate agent marketing. You can carry it into so many different marketing things. So I see some cool things in your horizon.

Karen Kaminski (14:02)

It’s so funny that you say that because that’s actually what happened. So when we started the AI company, it was really to help our tenants to be more efficient with their business so that while they were working, somebody was answering their phones and so that they wouldn’t miss a client. Because now what has happened in the world is people actually, everything goes to voicemail and they get to it later. Well, then a lot of times people don’t want to go home and start another job. And that’s usually what happens, especially when you’re a single, a solopreneur.

So that’s why we started it. And then as we start using it and people started asking, I’m on the Scranton board of directors or the chamber, and people are like, We heard that you’re using AI. So all of a sudden they’re like, my God, we have to change out our phone system so that we don’t have to use it. And it just started snowballing. So we have more people, we have the local ski resort that’s like, my God, could you, put in

Place the receptionist so we don’t have to answer, local little restaurants and those types of people now coming to us because it’s the repetitive questions. And again, the company does way more than that, but that is the introduction to AI that people are comfortable with. That one, they don’t have to do the repetitive task. And I know for myself, for the whole nine, 10 years that I’ve had this company, I was answering my 877 number.

every day. And it would be people looking for appointments, some people looking for, the spaces as far as renting them, but most of them were financing calls and wrong numbers and, all that stuff. That alone, not having to answer that phone anymore, has been a Godset. So now when I tell people, I go, listen, what’s the most repetitive question you get all day long?

And if you send somebody to prompts, because that was the other thing that frustrated people, and it was so funny, they were like, my God, so that has really starting to take off as far as, another aspect of our business.

Issa Hanna (15:55)

Definitely. I could see it taking off because once again you’ve made it easy, right? And when you make things easy for people, they’re gonna eat it up. and then another point I want to make when you are an entrepreneur, when you are your own boss, when you are, the head of the business, you need to delegate your time. So this is saving you so much time to strategize, to think, to plan your next move.

And that’s exactly how you integrate this new AI, this new tech. for people who are a little bit hesitant or a little bit afraid to figure it out, you better get on it because this is going to be bigger than the internet. mark my words. So truly, truly amazing.

Karen Kaminski (17:08)

Totally agree with you. I had five locations, but I couldn’t hire a receptionist. I just couldn’t do it. I didn’t have it in the budget. But now that I could put together an agent that’s going to answer all three of those platforms is a total game changer. And it’s only for a couple hundred dollars a month. And we learned how to do it for people because a lot of the businesses we saw, it was do it yourself. And

People don’t know how to do that. And they don’t know once they do it if it’s gonna work. But especially for these big real estate groups that are getting into this, if they have multiple locations and they have one agent answering all of them and being location specific, this is huge for them to actually develop more locations within their portfolios.

Issa Hanna (17:49)

Definitely, because you don’t have to worry about hiring more secretaries, or receptionists. You don’t have to worry about spending that extra capital. You can keep scaling and you’ve got the time and you’re not giving up anything on the service end either. So truly, truly unbelievable, huge things in your future. we all have a five year plan. So what’s your five year plan? Where are we going to see you at in five years?

Karen Kaminski (18:10)

So I want to get into the UK, I want to get into Australia because what’s happening now is the one Phoenix was the only franchise model in the salon suites that actually, jumped into Europe. And I would love to get into that market and get into the UK, Australia, those bigger countries. Because here’s the deal when it comes to salon suites.

Everybody gets their hair done. Whether you’re a barber, getting your hair colored, cut, everybody’s getting them done. And this business model, they use it as a booth rental in Europe. and then in Australia, it’s another booth rental type of situation. But here’s the difference when it comes to the big picture. When you’re booth renting, you’re still under the salon owner’s rules, regulations, ours, products, everything.

When you have your own property or in your own space, you make the hours, you buy the products, you choose the products, you choose your services. Whereas that’s the difference between this. So you’ll see a lot more people instead of opening up those multi-chair salons doing this type of business model. So now everybody comes and goes as they please. And have your security at the front door. It’s not just willy-nilly, but it takes the pressure.

Off of a salon owner because what we saw over the course of 10 years, I’ve been out of being a sales rep for about five, six years now. And what has happened is when you have a person in your salon as an employee, the most you can ever give them is a 45% commission. Anything over that, their liability. And the reason why was 10 years ago, you might be able to make maybe 10, maybe 15% off of any given person in your space.

But because times have changed and the way we pay people in the beauty industry hasn’t, everything else has escalated except for the commission rate. And what’s happening is 10 years ago, more people paid with cash, so you didn’t have credit card services. And slowly and surely what’s happened is that commission rate now to have somebody in your salon has dropped down to 4%. So when you look at the big picture, are you really gonna take people in for 4%?

And that’s if you don’t run into a repair and maintenance. So that’s what has made this business model so popular. And now countries like Australia and the UK, they’re first in the forefront when it comes to this. They could actually corner the market. And like I said, we could see them popping up. In fact, we worked with a company up in Canada.

they built two of them while they were working with me and now they’re on their third one. They’re in Toronto. It’s called the Suite House. So that was my first international, project that we worked on. and again, we worked great. we had the architects, my clients were awesome, and they launched their own business. And once in a while they’ll call me and ask me, what do I do with this?

type of thing. And it’s great because we have this really great network that we work with.

Issa Hanna (21:00)

truly amazing. I’m just sitting here listening to everything, smiling, because it’s literally a win-win, right? So for both parties, for the beauty professionals, for the investors, it’s a win-win. and you’re going international with it. I’ve been around the real estate game long enough to see something big on the horizon. You’re already pretty big, right? But I could just see you guys snowballing and taking

over like you said, international markets really, really soon. I have a lot of investors that are at home and they watch this show all the time. they’re always asking me and commenting on the page, I love this guest, I love that. I know you’re going to be one of the favorite guests. I know they’re going to want to call you. So if they did want to get a hold of you, how could they reach you, Karen?

Karen Kaminski (21:41)

So our website is AllureSalonSuiteConsulting.com. And my, cell phone number is 570-294-8979. And then my office number is 570-955-0671. And any one of those, whether they do Karen at Allure Salon Suite Consulting or Info at Allure Salon Suite Consulting, they could reach out and we go through a quick discovery call.

even if your investors don’t have a property and they’re looking for them, we actually scour and look through, we go through our, real estate contacts to see what their portfolios look like. And what we’re noticing too is a lot of those multi portfolio people, they may entertain having somebody come in and run it if it’s one of our clients so that they don’t have to do it. So we’re able to work whichever way.

And then even the smaller investors, I had this one investor in Ohio, it was Deerfield, and he owned the building and he had 3,000 square feet. And he was like, Karen, he goes, I really want to do this. He goes, I’ll be able to build it out. And I said, Okay, why do you want to do it though? And he goes, Because instead of having one rent, he goes, I could have, how many? So he was only getting $3,000 a month. Now he gets 12,000 because he ended up putting 12 studios in there. And now he’s one of our.

Clients that we market for. And he’s like, before that, he goes, I would have lost out on all this extra money. so this was great. there’s all different levels and like you said, with the AI stuff, making it easy for anybody to do this business model. And again, we just check all the boxes.

Issa Hanna (23:14)

One hundred percent. Every single box is checked. It takes somebody like you who’s a visionary, who’s constantly thinking, constantly trying to refine, has the beauty industry knowledge, and also now has the real estate knowledge, right? Because I’m talking to you, you’ve got the construction knowledge, about the permits, you’ve gotten so much education. Like I said, you’re one of the foremost experts, not just in the country, in the world at doing this. I know for a fact.

My investors are gonna go crazy and probably start contacting you, ASAP, because like I said, you’ve made it easy. It’s a win-win. guys at home, don’t be shy. Karen is super personable, super nice, and she would love to help you make more money. make sure to contact her. Karen, it was such an honor to have you on the show today.

Karen Kaminski (23:57)

Thank you so much for having me. This is great.

Issa Hanna (23:59)

Yeah, I enjoyed the conversation so much. And to the viewers at home, if you guys enjoyed my conversation with Karen and want to see more like it, make sure to hit like and subscribe. I talk to people every day that could bring us different knowledge on every aspect of real estate investing. Until next time. The Real Estate Pros are out.