Latest / Financial Survival Network / Monetize Your Roommates -- Johnny Wolff #5805

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Monetize Your Roommates -- Johnny Wolff #5805 · Financial Survival Network

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  You're listening to Carrie Lutz's Financial Survival Network, where you get valuable information you
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  just can't find anywhere else to thrive in today's trying times. You need the
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  Financial Survival Network now more than ever. Go to Financial Survival Network dot com
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  and get your free newsletter in gift Financial Survival Network now more than ever,
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  And welcome you are watching listening to the Financial Survival Network. I'm your host,
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  Carrie Lutts. Well, there's a lot of ways to make money in
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  real estate that you could just buy homes or condos and rent them annually monthly.
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  You could do short term vacation rentals, but what about Airbnb without the
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  baggage, without the luggage for a longer term commitment, You're still going to
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  make more cash flow, and effectively you get the benefits of Airbnb without the
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  burdens I'm talking about. My next guest is Johnny Wolf and Johnny, your
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  site is live homeroom dot com. And if I have it right, basically
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  you provide investors of means of renting it by the room rather than by the
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  home effectively. And I know you came from Boston and my son lived in
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  Boston for a while a lot of people, especially when they're attending university,
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  you're just looking for a room to rent. So with that introduction, here
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  tell us about about your evolution. Here how you started this business. So
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  I am start my career in the Silicon Valley as a financial analyst and I
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  but you know, early in my career, I thought it'd be great to
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  invest in real estate because it was, you know, buzzy everywhere thinks real
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  estates the answer to generating wealth. And my first property I did, okay,
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  not amazing. It was in Midland, Texas, but I learned real
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  estate and started to analyze it, and I realized over the next five to
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  seven years, after about a number of other properties, that real estate was
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  the investment strategy I wanted to use to kind of build out my burstal net
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  worth. So I moved to austin twenty fifteen and invested in a number of
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  single family homes and rented each out by the room I'd lived in remained houses
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  in San Francisco for a long time, and so I thought it just made
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  sense, and I was able to get quite a bit more rent in some
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  cases fifty percent more, some thirty percent more. It was a bit more
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  work, but you know, at the beginning of your real estate kind of
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  investment, kind of push, you know, every dollar matters. So I
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  did that across Austin and then Kansas City, and a few of my friends
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  said, hey, how do I invest like this? It seems like you're
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  doing really well. And so then Homer was born. So we started in
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  twenty eighteen. We now have twelve hundred rooms on the platform where people can
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  help. We help people find homes or on board their homes on our platform
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  to rent them out by the room for up to fifty between you know,
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  alurgeen thirty five to fifty percent more rent for the same exact house. Interesting
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  and uh okay, so um, Obviously there's more management. It's more management
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  intensive when you have three people, say renting a three bedroom home than just
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  one person renting an entire house. But what does that look like in terms
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  of actually doing this, actually running your properties? Yeah, yeah, more
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  more labor intensive, as you know, as an understatement, I think you
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  know the spectrum of single you got your single family homes, it's pretty straightforward
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  annual leases. Any syndicated side can get you a renter and then the leases
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  are standard and then you got on the other side, you've got your short
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  term rentals where it's people are moving in and moving out. You got to
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  furnish it. You've got star reviews to worry about constantly. Um it's super
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  heavy management. And there's companies like for Costa, we charge like forty you
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  know to run those for you because it is really really hard and I think
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  we're kind of in the middle, right. We we get you more rent
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  but the average people sign on for a year. There is some you know,
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  roommate dynamics that we manage I think, as you know, really well.
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  But it so it costs cost a bit more. But yeah, we
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  we vet people. We you know, we have pretty aggressive leasing and marketing
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  team. For tenants, we have a really nice onboarding team as well as
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  a roommate and house management team. We provide like main service, yard care.
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  You know, there's some things with shared housing that if you don't you
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  don't do essentially then it may or may not get done. For example,
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  the lawn getting mode. And we found that when the lawn doesn't get mode,
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  you know, the city comes knocking, which is not not awesome.
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  Um, So we just we just take care of that stuff, right,
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  So it makes the roommate experience better, they stay longer, and then the
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  owner makes more on their investment. Right. Okay, so so what's the
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  average tendencies a tendency length, how long did they stay for? Now?
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  The average length of stay is sixteen months. It kind of varies based on
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  when they sign, but most people are signing for a twelve month lease.
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  It's a bit cheaper. You can do shorter, but it will charge more.
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  And so yeah, most people are usually doing a twelve month lease with
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  an extension, all right, And yeah, so is this mostly students student
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  housing or road does it crossover? Yeah, it's mostly not student housing.
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  Actually, we really house students most. The average age of people that live
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  with home room is twenty nine, so it's mostly a lot of people are
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  looking for more flexible to live, a more social way to live, and
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  a way to live that's cheaper. You know, for a tenant to live
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  in a home room, it's thirty to fifty percent cheaper than a studio apartment
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  in the same neighborhood. And so, you know, affordable housing is you
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  know challenge today. So homeroom is offering that in a way that's pretty streamlined
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  pretty professional, and you know it's hard to compete with especially on a price
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  basis. Okay, And so you were saying that the people eighteen to twenty
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  five, is that you're key demographic. Eighteen to thirty five really is the
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  key demographic, but it really exkews towards the mid to late twenties. So
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  in that generation and that demo is that is this what they expect They're going
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  to be sharing a house because it's so expensive, they can't afford to buy
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  in on their own. Maybe they don't want to live on their own.
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  How does it work? Yeah, you know, the percentage of people living
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  with roommates is actually more than doubled on a percentage basis over the last few
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  decades. Now twenty six percent of young adults are living with roommates. So
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  I don't know if if they necessarily expect it, but it is an option
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  that like most people in that age group have be no people that are living
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  with roommates today. Um, you know, it's hard to buy a house,
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  it's hard to save to buy a house. People have a lot of
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  student debt so and also people are waiting a lot longer to get married.
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  So there's just this big window of time where affordability is important and you don't
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  have two incomes. Right, Okay, so this kind of like transitional housing
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  if I have that right, correct, I guess. I mean I think
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  all of life is a transition, right, So I think, you know,
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  I think life stages come and go in all different directions, and so
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  this is sort of some people are transitioning out of marriages in the home room,
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  some people are transitioning in you know, out of college. You know,
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  it's it's all over the game, it's all over. We don't really
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  say this is for pre marriage, but we do find that there's a massive
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  demand in that group. Um and uh yeah, So something like that I
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  think could be said interesting. Interesting, And it's like it's it's really a
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  growing market. Huh yeah, it's been. It's been grown for the last
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  four decades, that's for sure. So I do it Does it turn around
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  at some point? Um, if housing becomes a more affordable Um, it's
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  hard to say. What's the biggest driving factor is I think how I think
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  it's a mix of housing, affordability, loneliness, and delayed marriages. I
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  think all those together kind of just you know, this the stars. You
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  know, standard apartment is fine, but it is very isolating, you know,
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  and it's very expensive and you have to you know, and it's very
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  constrictive in terms of what you can do with home, or you can kind
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  of in our app you hit a button, you can transfer to a different
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  location, transfer between cities. So you know, housing is not very it
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  doesn't feel very modern, even in like nice newer apartment building. So there's
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  also a portion of this that is the experience of living doesn't have to feel
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  so nineteen eighties in my and so that's that's something that we're also really focused
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  on and why would people really enjoy what we offer? Hey, all right,
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  so we want to find out more. If we own property, we
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  want to engage the service. How do you find How do you find it?
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  Um Uh, We're at live homeroom dot com. You can kind of
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  you know, we have few options. If you're a tenant, you can
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  hit us up. We have some virtual tours at homes. If you're an
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  investor, you can schedule a time with our investments team and they'll kind of
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  talk you through how it all works. And if you ever have questions about
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  roommate living, you can email me at Johnny at livehomeroom dot com. I
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  like to chat about it. It's kind of my it's a big hobby of
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  mine. And also so yeah, that's how you get a hold of us.
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  Okay, Well, the link will be in the show notes live homeroom
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  dot com. And if you have any questions for Johnny and myself, shoot
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  us an email k l at Kerry Lutz dot com. We'll get you an
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  answer quick. It sounds like a very valuable service. We didn't even talk
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  about the roommate screening and judgment searches and evictions and criminal record it searches all
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  part of the platform and John and good luck with the service and appreciate you
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  coming on. Karrie, thanks so much for having me. Had a great
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  time and really nice, nice chatting with you, and and to our audience,
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  thanks for listening to Carrie Lets's Financial Survival Network, your solution to today's
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  trying times. For the latest, go to Financial Survival Network dot com.
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  Financial Survival Network now more than ever,