Co-Living Spaces

Zac Ruiz [0:00] Welcome to RBL Meetup. As it says there, we are bringing together the movers and shakers of the real estate world in Asheville. And generally, that's you guys, right? So whether you're an agent or an investor or just trying to get into it, we try to bring everyone here to do data driven education and networking. So my name is Zach Ruiz. I am a self-proclaimed jack of all trades. I've done everything from being a United States Marine Corps infantryman to investment banking in Wall Street. And so, and around these here parts, I'm a keeper of the data. So I run the Ruiz Report. We're going to go over that on the market information and some other real estate technology stuff.

And I've got a 6 month old son, name ever said home. So my wife's being awesome, letting me go out and play with my friends. I co-host with Rodrigo.

Speaker 2 [0:39] So I'm gonna start at the bottom, work my way up, got a family of four. We have 2 little boys with 2 little tornadoes of chaos as I like to say. Been in the business since 2012. I like to send a little bit of a deal junkie and try to do deals any which way as possible. It's been fun, lots of good experience. And wanted to, on that note, touch base on something. So we've been rolling out the deal corner, which is at the front here. Show of hands who would be interested in buying a piece of property at a good price in the near future, like next week. you saw a good deal and you're like, oh, that'd be interesting. Okay.

So if you rose your hand, I would encourage you to come to the deal corner next time, because it's really a lot easier to buy property, if you're actively in a position where people are congregating to buy property. So that's the idea of the deal corner. If you want to buy something, come to the deal corner. There's probably somebody who's at the deal corner who might have a property that they're interested in selling, trading, or maybe there's somebody there who's with money that they want to lend and put to work. So highly encourage you guys for the month of October, come to the deal corner, never know. Maybe we can work put some deals together. An example of that is.

So there was a deal that came together last month, I think, from the deal corner. We would like to celebrate. So, as I said, I'm a deal junkie and I just went straight to what I wanted to talk about. I forgot about Krum. Congratulations, Carl. Thank you. Chrome came to our very 1st meetup at Wipers, where there was like 12 people.

Zac Ruiz [2:11] We love that you applaud it regardless. That's great.

Speaker 2 [2:15] I thought you bought all that land. Yeah, Cronbotted Mountain. Yeah. But yeah, either way, why don't you give a shout out because Cromp's been like coming since the very beginning. And thank you. Congratulations. But then, yes, steel corner again. So last month, Dio came together. Alex was here. I guess she's not here tonight, but as a referral, they closed September, early September. So that's kind of just the power. One thing I always like to say is you never know what one person or what one conversation you're away from from having a life-changing event in your business or in your personal life. And the best way to do that is to talk to people. So thanks for coming out.

And also, some of you guys know Jordan. She's been here a lot as well, but she's doing something pretty cool and we just wanted to highlight it. She's biking the Camino Santiago. you're interested in following her journey, she's raising money for a good cause, so we just wanted to give her a quick shot out. If anybody wants to support it, She's doing like ¢25, ¢50 a mile. Well, wait a second. You can scan the QR code, and she would feel the support from her community in Asheville, which would definitely be a cool thing. So we'll pause there for a second.

Zac Ruiz [3:22] Word of caution, very driven woman. You are betting by the mile here. She may go very far. Be careful with how much you're willing to pay a mile. Yeah, it'll add up quickly for sure. We'd also like to congratulate Elena, one of our secrets from the lead. We have a lineup here. So, there is an event going on in Charlotte on Thursday and she's gonna be sharing her knowledge about YouTube. So even our previous speakers and our members, they're all they're all doing things. We've got Lucas Taylor at the back who recently joined Andrew Lancherry's theme. Andrew was a speaker of ours as well, for lead generations, and systems. And now look at this. hes expanding the systems to a new HD number.

And then finally, we have Miss Ray Ray, who has been volunteering, she was our 1st volunteer if anyone's noticed, but she also recently joined. Yeah, go for it. So after helping run six of the Coldwell bankers around here, she has joined RMC, the real estate mission control that we get all our data from, to help us grow our business. So our little network and community is growing and we love that you guys are a part of it. So we wanted to celebrate that. Now for some in-person community data, which is why I keep bothering everyone to answer these questions signing in. So 1st off, do you own a new rental property? Look at that. More than half of you do. Think about that. Right?

Say hi to these people. Meet everyone. These are other people out there getting it just like you. These are the movers and shakers. Some tells me the nose want to be a yes. So, as Rodriguez was talking about, we have the deal corner. We have money lenders in the room. We have a lot of sleepers here. You just have to get around inside. Have you ever thought of renting a room instead of the whole house?

Speaker 3 [5:02] Yes, look at that.

Zac Ruiz [5:03] And yet most people don't, right? So we've got a great speaker coming tonight tell you about his journey, how he got there and how he makes it work for themselves. It's really not. I think renting rooms is more or less profitable than renting the entire home. Look at that. Unanimously, basically. Everyone thinks it's more profitable to do it, and yet it's not really done very much. If you go to our Facebook page, we had some incredible haters. this previous time talking about how this is ruining the community and hopefully Sam's going to talk about how it's actually an affordable way and a great way to expand housing in an already limited supply area.

So have you ever lived in a co-living situation? Rented a room in a house, a dorm, if you lived in a Barrett in the military, right? Most of us have, so it's really not even a form of a concept. It's something that's pretty much understood by most everyone. So we're going to talk about that a bit today. And then finally, do you think it's a good time to invest in real estate for rentals? Overwhelmingly, everyone said, yes, we'd love to talk to the people who said no. It's a contrarian opinion, right? You got to inform yourself and have group books. So with that, raise the hands, if you don't mind. How many wheelers do we have in the room?

Unknown [6:06] All right, all right.

Zac Ruiz [6:07] We usually do this. Of the agents who are SVP, which is why we try to help you RSVP. Here's what's in the room right now. And as you see, 3 deals, 1200000 and 12 months close, 22 million. Last month, we had 130 million. So basically what we think is happening is these talks are attracting different people, right? And the market is shifting under our feet. We're gonna talk about that right now. So these numbers are down significantly from previous months. So let's move into the market report. Start talking about how the market is shifting.

Unknown [6:39] All right, so.

Zac Ruiz [6:40] The other thing I do, the reason I am the self-proclaimed keeper of the data is here, is so I run the Reeves report, right? We've been doing this 30 months, as you can see, and subtract 30 months and fun enough. That was the very 1st month of CODID. And so I had just put in a full price offer on a home and they made real estate, not even an essential service and I was like, you know what? I'm a believer. And it turned out to be amazing because real estate has been changing so quickly, so quickly. All these like adages of what's the average price of the home and like, actually, like 315, not even really close anymore. And those things were changing month over month.

So people were relying on stale old data. And so we do this every month and here's a little sneak peek at what it looks like. So there's 3 at a landslides and those are just like the gist of the overall market, right? So as we see here, the top number is versus last month. And then the bottom numbers versus the same month last year. So 10% people, basically, versus last month and August of last year, thought it was not the best idea to list, right? And we're going to have a graph of pretty shapes and colors to kind of show that and how that works, right? But new listings are down and new listings is tied directly to inventory. And inventory is tied directly to pricing, right?

So even though things are shifting, and we'll get into pricing conversation here shortly, it's still a supply and demand problem, and there's more demand than there is supply. That's just kind of how it works. And yet, on the other side, buyers thought it was a great idea. So 16% more people went under contract in August than the month of previous, and the 8% less than last year, but we're going to go to the charts last year, the past 2 years have just been wild. These are the highest ever. So even though it's a little bit lower, it's lower from the highest. Right? And then home sold, that hidden numbers, 20, I believe, right? So 20% more homes sold.

Now, it's very important, this last line, homes that sold in August went under contract in a previous month. It's a lagging metric. So under contracts telling you where we're going, and home sold is telling you where we're coming from. So that's one way to look into this. So next, we're going to talk about velocity and I've highlighted days on market. So 12, for we're talking like a year or more, the average and median days on Mark, where the median days on market, excuse me, was like 3 days forever. And so what this tells us, the meeting is the middle number. Just line them all up, take the middle. So 50% of homes sold in 12 days or less still. So that's super, super, super competitive.

Month active listing is a number you can't get anywhere else. So if you were to log on at any point in time, you'd be like, oh, there's only, you know, 10 homes for sale on my price range. This is horrible. But that's a spot. right then and there. The month act of listening is how many were active at any given time during the entire month. So a lot, so look, 6% more real estate than last month. So you have to think of things in the aggregate. How is the market doing versus how is it doing when I'm looking right now? And there's still a lot of real estate happening.

And then months inventory, months inventory is a metric that says, hey, if we didn't add any more new listens, no more inventory, and we kept selling at the rate that we're selling right now, how long would our inventory of housing last? So a balance market is 6 ish months, anything lower than that is the seller's market, because they have all the power, there's not all the supply, anything higher than that is bias. So we are way below, way below a balance market. We are still very much in seller's market territory. So it's worth keeping in mind, even though these numbers might be shifting. They're shifting from the lowest, highest, whatever you want historically to just a little bit less.

So let's keep that in mind. But this is a new thing, right? So your average list sale is how much did it sell at versus the list price. An example I always give is if we list the home for a $100000000000, Obviously no one's going to buy it. But then if we lose it for $100,000, someone will pay $100,000. So the list sale price was 100,000, one under contract at 100, so it's 100%. But the original list sale would be like, you know, a fraction of one%. The average home price is $544,000 in Buncomb County. That's the entire county. That is high, right? So it's $25,000 more than it was this time last August. So we started balancing out a little bit. But look, the original list sale. This is huge.

Think of a percentage of several $100,000, right? People are having to reduce their prices and that's not something they've done in the last 2 plus years. That is some, like things are changing, right? And why? You don't need to be an economist. Mortgage rates are double, almost. Your house, even though it's still the same sticker price, costs a lot more every month out of your income. People are having to adjust accordingly. We're going to get to the combination of days on market. An original sale. This is all the price ranges in Buncombe County. And this is all I wanna show you. So months of inventory, the green is the seller's market. Still, it's still very much a seller's market, right?

So things are moving, but let's keep things in perspective. And then average list sale. All the greens are 100 or more, still a lot of them. The red bar is activity. How much real estate is happening? And I added this black wine to show you that basically how much real estate is, we've been leveling out at what we'll call a lot, more or less, other than the winter months, and that's a normal thing. But the green is the home sold and went up to a contract. that the other side of this. We've seen a lot more variability on the buyer side. Why? Because it's super expensive. And now think if you're a seller. If you bought 3 years ago or something.

And you'd be like, oh, I've got all this great equity. But I'm at 2 or 3%. And if I sell my house now, even though I have this great equity, I'm going to pay more a month in mortgage for probably the same or less house. So going back to supply. It's not exactly a home run to sell your home right now, even though you might cash out, equity wise. You're going to give a lot of that back to buy your next home because of how much properties have one appreciated. And how much more the mortgage costs. So listings and pendings, this is the best visual representation of what's happening. The red bar is how many people said, hey, I'm going to sell my house.

The green line is, how many people said, you know what, I'll buy it from you. And so that gap, right? is missing inventory. More people bought homes than were added to the market. And that's why our month supply keeps going down. Now, as you can see on the chart, this hasn't happened if we were to zoom out even 2 years, where they're putting more homes up than they're taking off. That hasn't happened in the longest time and it's because people have said, 0 man, rates are going up. I gotta do something about this. But now they're somewhat kind of sort of stabilizing, or at least people would acknowledge that, yes, these are the new race.

So we saw this month a little bit more equilibrium back to our supply and demand. Home prices. I like to say that we all know 2 quarters or 2 periods doesn't mean anything anymore, but as you can see, the average price has been going down a little bit. And so home prices are coming down. Days on market are going up. Things are happening, can't be denied. Right? And finally, our days on market, you'll see that is going on. Right? So this year, last year. So I think days on Market is kind of the canary in the coal mine. kind of telling you what's happening, but it's often buried hidden. Right? So the software we talked about, RAMC, this is how I get all this data.

So if you were to log on, if you have access to this, if you're a realtor and you want to show your clients what's happening on the spot. So for Buncombe County, this is as of this morning, single family homes between 500 and 600,000, and if we go back really quick. That was our average price, but look, it's also where the most homes are selling as a price range. So that's not just like a random selection. So from this, let's look. The actives, the inventory that hasn't sold, the question we ask, the average is 67 days, and the media, meaning 50% of the homes that are still listed, have been on the market for 50 days or more. Everyone's like, oh, homes are falling off the shelf. Oh, wow.

Right? And so check this out. You can't get this anywhere. How many have a price reduction? half of them. Half of them have a price reduction. And look, from their original list, these are real price reductions. This isn't like 50 bucks, so you can refresh on the NLS or something, people are realizing, whoa, the buyers aren't coming anymore. So let's talk about it. The median of active listings in this price range is 50 days. And 50% don't know how to price your mention. But that same price range under contracts? Look, 20 days. And how many had a price production? Less, 25% of them. What does this tell us? These people came to terms with reality.

They said, my house isn't worth what I thought it was. They lowered in time or priced accordingly and they sold. These people don't want to make that decision. And they're not going to sell. You know that because look at this number. That is absolutely wild for what's been going on lately. So if you're a realtor and you're trying to tell your clients, this is the only way to do it, and there it is, data, right? It's not just data, it's information. It's telling them what's happening. You can pick any price range, any type of property.

Speaker 3 [15:11] So let's recap.

Zac Ruiz [15:12] So listings are taking longer to sell. Prices are coming down, and that generally affects 1st time homebuyers the most. They're going to squeeze the rates and the more affordable homes are not as affordable and kind of disappearing. And that most likely to reconsider and rent are the 1st time homebuyers, right? So kind of tying that into our topic tonight. If you're interested, if you go to resupport.com slash latest reports or free. Every month, updated on the third, you can get the same information if you're interested and you want to see the market moving. Talk about co-living spaces, with that, we'll turn it over to Rodrigo.

Speaker 2 [15:42] I have the opportunity to introduce Sam to you guys. It's going to be a very short introduction because I don't memorize files. But the important thing is, I wanted to reinforce an idea that I found very true to myself. I think everybody would agree with is anytime we're presented with something new. It feels very different and there's a lot of reasons not to think about it or not to consider it. And I would venture to say that every time somebody's made money in real estate, it's because they're willing to kind of go against that grain and explore something that felt a little strange or new.

And so, for me, with co-livings at least, it's not something I've ever done based on the data or the feedback on the survey, not very many of you guys have tried it. So, with that in mind, I want to invite Sam on to the stage, but encourage everybody to keep an open mind and see if there's something that makes sense for you, me, any of us to explore and see about increasing cash flow and providing a better product to the end user.

Sam Wegert [16:34] Thank you, Rodrigo. Thank you, Zach. Aren't these guys awesome. Put this on every month for us. It's so great. Hey, I am curious. Has anybody here invested or have a co-living space? Just, I got one. I got two. I got three. I got four, five. Nice. So, how many of you, um, raise your hand real fast, I know you showed the staff, but this will just help me real fast. How many of you actually, you own some sort of rentals or some sort of real estate? Awesome. And how many of you are in real estate for some level of financial freedom? Like, that's the, Yeah, yeah, most of us here, right?

So, When I got into co-living, really my goal today is really just to share with you my story, how I got into co-living, and then I'm going to teach a little bit, if that's okay, I'm going to tell you my 12 points that I look for in every co-living home that I'm buying, and my wife, Rachel, is here actually. Let me just say hey to her. She's my partner in our co-living spaces. My sister Charity is right behind her. Thank you so much. And so I'll share with you my top 12 things that I look for in every co-living space, and then we'll jump on Zillow. Anybody here has Zillow fans, and we'll dive into some actual homes. So we'll go shopping. Well shop for some homes today.

Okay, real fast and I'll show you kind of what I look for. like real life from the actual platform. But what I'd like to invite you to think about 1st is just what is your version of financial freedom because this was the question that originally got me interested in co-living. It was like, well, what does financial freedom look like for me? And for me, maybe similar to you. It doesn't look like not working at all. It looks like just doing the things that I enjoy. It means working because I want to not because I have to. I stumbled into co-living because I felt like it was a fast track to that goal.

Most people and you guys are probably not a part of this group, but most people, if I ask them, how much money do you need to retire? I get lump sums of money, right? Like, well, I need $2 million. I need $30000 dollars. But real estate investors, and I bet you all think about it differently. We need to think in terms of how much money a month. Do I need to set myself free? Does that make sense? Right? And there's 3 level of financial freedom and I teach this. Level one is just, you covered your base expenses. When you get to that level and for me, it's through co-living, you feel good, right? Your housing, your transportation, and your health insurance is covered.

Your basic expenses, your food. I should put food in there too. Yeah? Food and house. And then there's another level where your financial freedom, your income coming in every month covers your current lifestyle. That's what I call level 2 financial freedom. your current lifestyle. So if you couldn't work another day in your life, or you couldn't make another dollar, you would be set at your current number for the rest of your life. And there's a 3rd level of financial freedom, and that is where your income covers your dream lifestyle. Does that make sense? Your dream lifestyle, what that looks like, okay? So, my name is Sam.

I was raised in a small town in Virginia called Amherst, Virginia, right outside of Lynchburg. Anybody been to Lynchburg, a small town, and I, uh, really was not a real estate guy at all. Actually, my dad bought a bunch of real estate in 2007. He 100% financed all of it and it was all adjustable rate mortgages. And so growing up, a lot of what I heard was, real estate's going to be the death of me, da, da, da. But I thankfully had some other voices playing in my life and I just, um, they said, you know, real estate is a good thing to buy. And I listened to those voices a little bit more.

And my base business is running a chain of martial arts schools, around a chain of martial arts schools, and I had a little bit of cash, and I said, you know what? I'm going to buy this 3 bedroom, 3 bath condo in Charlottesville, Virginia. That was where I opened up one of my martial arts schools. And I was singing at the time and I only needed one room. It was a student housing development for University of Virginia. And so I lived in one room, and I rented out the other 2 rooms. And this is what you call house hacking. I'm gonna know if you've heard of that before. house hacking.

Speaker 3 [20:19] You're living and you're living for free, but I was actually making a little bit of money and I was living for free, right?

Sam Wegert [20:25] So that felt pretty good to me being a 20 year old kid doing that. And so I really, the idea of co-living didn't come up for me, then I just thought, oh, this is cool. So I moved from Charlottesville, Virginia, to Charlotte, North Carolina, and the right thing to do was to buy a house. So I rented for a year. I bought a house.

Speaker 3 [20:40] I come from a really big family. I'm one of 8 brothers and sisters, and so I got into my house the 1st night and never forget, I'm like, it's too quiet in here. I'm used to a lot of siblings And I thought, I could have some roommates. So I started renting out rooms. So I'm home. I said well, I'll live in the master and I'll rent out this room.

Sam Wegert [20:53] And then I rented out another room and I said, you know what? I have this extra space. I just put up a wall here because the living room was really big.

Speaker 3 [21:01] And I thought if I just put up a wall here and I took that half bathroom and I just put a full bath in and all that work, by the way, cost me like $5000 back then, it was so cheap, right?

Sam Wegert [21:11] And it was like, so I put up the wall and I made a half bathroom, it was not permitted. I should probably tell you that, but it wasn't. And I was writing this up to 4 to 4 people. And I remember thinking, I wonder what this house would rent for.

Speaker 3 [21:21] If I just rented it in Charlotte, this whole street in Charlotte called Land Gramp Road, I said, I wonder what it would rent for if I just rented this out as a whole house. And it was like 1350. I was like, I'm doing the math, and this is what it hit me. I was just like, no, man, I was like, okay, well if I count myself as a renter and I'm paying for that. well, wait, that's $3000 1350, 3000? Is that worth it? Like, is that number worth it? But then I went on a journey. I thought, you know, I got a little copy. I'm not going to lie to you. I thought, well, I'm going to rent out my room and I'm going to go buy another. use the primary mortgage loan.

buy another house and I wonder if I could hit 5 people in a home. If I could do that, I'd be 3750 in a home. I can do that, right? And sure enough, I did, and I put 5 things broke. Like, Johnny would come to me and be like, John, I eat my peanut butter. And I was like, man, okay. Maybe this cold living thing isn't going to work. This is what I have to deal with every day, right? But I thought, oh, I'll label the cabinets. They'll all have their own space. That seems really simple. And it worked. And I got a little cocky and I said, I wonder if I could put 6 people. I wonder if 6 people would share a house and I could provide something really great for them.

Sure enough, I lived in that for a year. Might have been 10 months, but I lived in it for a year.

Sam Wegert [22:28] I got up, I'm going to got another primary mortgage loan and sure I have like 6 people and things broke, right?

Speaker 3 [22:32] It was like the parking was crazy and they were arguing over and I thought, oh, I wonder if I just created a little map and I made everybody have their own assigned parking and 2 people parked on the cul-de-sac and then I would fix that problem, right? I fixed that problem. And it worked and I thought, I wonder if I could, and to make a very long story short, I said, I wonder if I could do seven. I wonder if I could do eight. I wonder if I could do 9 people and share a house. And it worked. And, uh, that was the moment I was like, wait a second. I'm taking a house that would normally rent at that house maybe $2000 and my gross revenue on it was $63, $6400 in the month.

And I thought, I'm tripling the revenue of this. And I really didn't think anything of it. And at this time of my life, I had a friend, his name was Jason, who was a high powered banker, who worked for Sun Trust. Charlotte's a big banking town and he had been kind of watching this journey. I had 4 or 5 houses now, 30, 40, 10, 50, you know, and he comes to me one day and he goes, Sam, I quit my job. And I said, dude, that's awesome. Like, what are you going to do with your life? He goes, actually, I did one more thing. I cashed up my IRN. And my 401 k. And I said, dude, big moves. And this has been my friend. He goes, I'm going all in on color. I was like, really? Wow.

Yeah, I was like, where are you gonna invest? Charlotte? And I was so mad.

Sam Wegert [23:43] He was like, yeah, this is true. I was like, you're gonna be my competition. Little did I realize. There's 2500000 people and housing, housing is a big, big issue. So this was my journey to co-living. And I'll share one more little piece that kind of locked it in because when I had 4 or 5 homes. I had the opportunity. How many of you ever read the book, Rich Statport? Or know of Robert Kyasaki, right?

Speaker 3 [24:05] kind of a godfather for us real estate people. So he, uh, I had an opportunity to meet him one day and I stood in line and I was like, okay, I was like working myself. I was like, I got to ask him about this co-litting thing because like if he tells me it's good, then I'll like go buy more houses, but I don't know anybody else doing it at this time. So maybe it's like not going to really work out. Because I just didn't know anybody else doing. So I go up to Robert Kyasaki, I'm like, oh, this is a great talk. He's like, I'm a black coat and taekwondo. So immediately vibed on that. I was like, awesome. I a black belt too. I said, hey, I'm doing this calling thing, man.

I'm like, renting out these rooms. Like, cash flow is good, but like, nobody can teach me about it because, like, I just don't know. And he goes, uh, he goes, Sam? I know people who are doing that. He goes, I believe it's the wave of the future. He goes, I know people who are taking living rooms and dining rooms, and they're turning those into bedrooms too. They're still creating a really small common space so people can have a community space, he called it, but they're trimming the house into a cool living space. And I was like, wow. So I got this like wave and surge of confidence. I was like, okay, this is awesome. And then he leans in and I was not expecting him to say this.

He goes, actually, if shit hits the fan, I'm gonna break my house into 4 different things and call it it. And I was like, oh, okay, Robert Kyasaki's doing it.

Sam Wegert [25:10] Oh, no, go, let me, let's go. But no, it was a cool moment. And so that was kind of what got me to this journey here, and then maybe just take it one little step further. My wife and I just kept investing.

Speaker 3 [25:21] We now have 150 rooms that we rent, 16 of which are in are in Asheville, which is pretty cool, and they've actually done way better. I always thought the population of Asheville just wouldn't support it because I'm in Charlotte, Charlotte, you know, big, a lot of, but we launched one here and we had a waiting list in 2 weeks and we're like, oh, let's launch another one, right?

Sam Wegert [25:36] So the numbers have to work. But we're really grateful to have those co-living spaces in those homes. So that's kind of my story about how I got into it. And then the last piece I'll share before we'll dive into really what I look for and what I believe makes a really good colliding space is just the testimonials.

Speaker 3 [25:52] Money is great and my wife and I are really fortunate to be in a place where we are financially free, but I started to hear these people being like, man, thank you so much because this is like 30 minutes closer to work than I where I would normally have to be, you know? And I was like, oh, that's really cool. And I, you know, we love zombras, the restaurant, downtown zombras, have you ever been? And we start talking about the servers and we're like, oh, I drive an hour and 20 minutes. Like, why? Like, why don't you just rent downtown? Do you know their downtown rent prices? Not really. No, because we just moved here, you know?

And it was like, ah, so starting to recognize that the term I use is called a social entrepreneur, right? Somebody who can do well by doing good in the world. How many of you are attracted to that model, like something where like, whoa, I'm winning. And I'm serving people. I'm providing an affordable place for people to live, and we see these testimonials every single day. So, and we're signing 12 month leases. So yes, I know some of you in this room. Anybody have short-term rentals, short-term rentals, like short-term rentals, these numbers that I share, you're like, ah, short-term rentals, like that, we can do that too. Yeah, but I have like more stable income.

So it's like, how do I get short-term rental level returns, but have 12 month leases on these rooms that I'm signed. Does that make sense? Housing of urban development just came out and now allows you to use, they call them. It's not section eight. What is it called? housing choice vouchers. Housing choice vouchers for shared housing, for co-living spaces. And that was, I got to give Atticus LeBlanc.

Speaker 5 [27:12] He's the CEO of the largest co-living company in America right now called Pat Split should write it down and check them out. They're doing some really, really, really cool work. They just hit like 7,800 units or something and they're not even, they don't own any real estate. They're just a technology behind renting the room. They like the Airbnb for room rentals basically. But again, it's longer term stuff. They just got evaluated $110000000 and they petitioned HUD to put that out so people can use their vouchers for shared housing.

Sam Wegert [27:36] So big 3 big class for that because that's helping a lot of people actually do this. So, uh, would you like to know kind of what I look for, what makes a good co-living house? Would that be valuable? All right, number one, number one, if you're taking notes, you can drop this down. These points that I've identified have really come over me like having some homes that weren't good. Getting into illegal battle over co-living with the HOA. So like, there's a lot that's gone into these 12 points. It's not just like, I think these are the best. Like, ooh, every time I would make a mistake, every time I'd get in a battle, I'd be like, okay, new criteria for best COVID home, right?

Which is really what it is. So number one is square footage. I came up with a formula very early on that if I have a 1500 square foot house.

Speaker 3 [28:17] I had at least 4 bedrooms, at least, and that's for me looking at 100s and 100s of floor plants, right? Like I know I can take a dining room. I can take a space. I always leave a community area. So Charlotte right now.

Speaker 5 [28:28] Charlotte North, well, Methlburg County just came out with regulations to try to regulate co-living, because it's becoming more of a thing in Charlotte. And one of the things they have, they say is your co-loding space must have a common area.

Speaker 3 [28:37] It doesn't say how big it just has to have like, you can't take every inch and turn it into a bedroom, right? Which some people are doing. But, because, you know, the difference between 8 and 10 can look even better on the cash flow, right?

Sam Wegert [28:48] So 1500 equals four. 1750 is a minimum of 5 bedrooms. I just came up with this formula and now it allows me to scroll really fast and find the right homes. 2000 square feet equals six, 2200 equals seven, 2500 equals eight. Remember, all my homes were small where we just were selling our 1st our smallest five. We're selling right now. They were all 4 bedrooms.

Speaker 3 [29:10] Why are you selling? thought you said it was good cash flow. It's like, I'm buying 8 and nine.

Sam Wegert [29:13] Like, that's all I'm buying. Does that make sense? Okay. The next thing is parking. So I always look and we'll look at some homes here in a second, but parking is a big thing, right? You've got to ensure that you have the right amount of parking, whether that's I always look for street parking.

Speaker 3 [29:27] I love homes in cul-de-sacs. I'm always adding like if it's a 2 lane driveway. I'm always adding a 3rd lane, and then I'm just making sure that everybody has their assigned parking. If you don't have that, things can be, at least Charlotte is such a big city and public transportation sucks. Like you have to have. You have to have parking for people because that's how most people get around.

Sam Wegert [29:46] The next thing I always look for is when I look at these homes, I always look for bathrooms, right? So I, in a perfect world, I'm finding 3 full bathrooms, homes with 3 full bathrooms. A little harder to do. a little harder to do in Asheville than it is in Charlotte. But 3 full bathrooms is best. There's a ratio that I've used. So pad split. They're the biggest company, but what they say is you cannot go over the 4 to one ratio. So 4 bedrooms to one bathroom.

Speaker 5 [30:09] How many of you take sides are like, what? How many do you think that's a lot? It's a lot. It's not too much, though.

Sam Wegert [30:14] It's not too much, right? It works and I've seen it work a lot. Now, my wife and I don't like to do that. We try to keep a 3 to one ratio and obviously you're going to have some masters and some that are just 2 to one.

Speaker 5 [30:25] Does that make sense? But your ratio of bedrooms, bathrooms is really important. And obviously private bathrooms, you can charge a premium for it's basically like, you know, their apartment.

Sam Wegert [30:35] By the way, that's my mindset on this. And this is we're trying to educate the market on this, even with our ads and stuff. The room is the new apartment, like your room. We don't furnish rooms, right?

Speaker 3 [30:46] We just furnish common space. They furnish their own room. Has a keypad locked on it? Because I want them to feel like that's their apartment.

Speaker 5 [30:53] I'll tell you this, I got invited on bigger pockets to share my story and share what we're doing in co-living.

Speaker 3 [30:57] And this guy calls me from Germany after my episode aired. And he goes, Sam, you're so cute down there, the United can say that exact word. Because you're so cute down there in the United States, like thinking co living's like a new thing in school and stuff and coming. like, we've been doing this in Europe for like decades. And I was like, oh, he's like actually, I'm building these things. I'm building co-living spaces from the ground up, design, made, for co-living, from the get go.

Sam Wegert [31:21] I was like, dude, can you send me your foreplants? Some of your plans? He was like, only if you don't show them with anybody else. But, but it was cool because it's, um, like Europe is used to it because prices are higher, less space, but it's uh, but it's important. Okay, the next thing is updates. Like, what we found is that you don't need top level finishes for co-living spaces. Like, it's nice if it looks nice, and what we're super proud about is like, I'm not trying to buy homes in crappy neighborhoods, right? I'm trying to buy homes that are actually an amazing experience for people. They show up in a good neighborhood. They're there. It's all worked out.

And it's okay because they get a great rate and they get to live an amazing place. Does that make sense? So it's really, really great. So we look for like mid finishes or not doesn't have to be crazy level finishes. No HOA or a voluntary HOA. We found that this was a really important thing. I've been in a legal battle with HOA before. That's just not fun. even if you're in the right, even if the zoning technically allows it.

Speaker 3 [32:15] Even if all these, even if HUD says you can, like HOHs just have this clause in all the CCNRs that are like, we can do whatever we want. And that seems to always win.

Sam Wegert [32:24] So know each way. Next thing is community area. This is the only part that it should be furnished, right? And I already showed the mindset. The room is the new apartment. The next thing is where these homes are located. This is, I think it's number 7 if you're keeping track. Suburbs located within 30 minutes of working areas.

Speaker 3 [32:41] I used to tell people when I was teaching this model, I used to say, you have to have 50,000 people or more in a 3 mile radius.

Sam Wegert [32:47] And then I realized like, we don't have that in Asheville, but the housing is still an issue here. So if I was to go into a brand new market and do co-living, I probably want more density just because of an investor, I want to be safe.

Speaker 3 [32:59] However, if you have market knowledge and data of the area, then you can, you know where housing's an issue and where it's not an issue. Does that make sense? By the way, it's an issue in all the major cities in the United States, affordable level housing.

Sam Wegert [33:11] A couple of bonuses. One, a bonus, if there's multiple entrances, that's huge. You can rent for more people like that field. So I'm always looking for those homes. The great thing about buying political homes is you know those homes that are like really, they're split up, they have a bunch of weird rooms.

Speaker 3 [33:25] The layout is odd. Maybe they're not fully updated and they sit longer, even longer now, things as Zach was pointing out, right? They sit, yeah, those are the perfect homes for us. They don't have open concept kitchens and dining rooms, right? I don't want to put up all those walls. I show you a couple in a moment, but like, you're looking for a home that's kind of already broken up, if that makes sense.

Sam Wegert [33:45] So multiple entrances. Uh, a floor plan that can be easily split up. Actually, let me just go see if I can find. Okay, so here's one. I'm so proud of this house.

Speaker 3 [33:53] I was so glad. We bought it about a year ago for 320,000 in Charlotte. And this is how it was, like, from the very beginning. Like, so let's make sure I thought. So you walk in right here, the foyer, you've got a living room right here. Guess what? That makes a super nice bedroom, and we just put up a door. Like, this is how it was, and it sat for, I want to say it sat for like a 100 days or a 140 days or something like that.

Sam Wegert [34:17] If you walk in here, you have a dining room. This was a big, this appeared, but the lights was a big room above the garage.

Speaker 5 [34:23] I'm sorry, above like a little, it wasn't a garage. It was like above a little carport underneath of it. That we turned into a bedroom right here. We actually ended up adding a bathroom to that. Then you've got a bedroom right here, you've got a master, and you've got a bedroom.

Sam Wegert [34:35] So just on floor number one, you've got your one, you've got two, you've got three, you've got four, you've got five. We turn to this dining room and kitchen. My wife does a lot of the furnishing aspect. She does an amazing job with it, and she turned that into a common space. Does that make sense so far?

Speaker 3 [34:47] Going down here, there was this huge family room, and I gotta be honest, when I went here, this could easily have been broken up into 2 rooms, and I was just nervous, because this was my 1st 8 bedroom house, and I was like, I don't know, the 9 thing, would that really work? And I, it's huge. But we ended up, we blocked off the fireplace. Very important thing to do, right?

Speaker 5 [35:06] Uh, we turned it into 2 rooms and then you got the bedroom here and we and we turned the recrimendo room as well and added a bathroom down there. Okay? So we ended up with an 8 bedroom house. Here's the interesting story about this house. I go to a lender, I go to a debt service lender. Tell them I'm going to turn it into a rental and they say, great, we'll do a rental analysis on it, right? so that they're say, hey, we're gonna see if you can afford. We're gonna see if this home will pay for that mortgage. And they came back and they said, hey, rent sorry, we can't give you this loan, rental analysis is $1,850. And I'm like, God.

Speaker 3 [35:38] Like, no, like, so I fought with them. They made me like buy it down. and like put more down. I was like, whatever.

Speaker 5 [35:44] So I ended up buying the house anyway. $1850, 2 weeks, this home filled, 8 bedrooms, and I believe the gross was 6385 all on 12. We offer a 6 month option at a premium or a 3 month option at a premium, but we did completely away with month by month just because we didn't want that turnover. The goal is to create a beautiful living environment for people that's safe, that's clean, and that's quiet. If you can do those 3 things through your vetting process, by the way, you've got the best living spaces out there, right? People will live there. People will go. People will come back, people will refer their friends. safe, clean, and quiet.

Sam Wegert [36:18] So the, like, practical answer is that in doing this for 15 years, I've never had an issue with it. I've never had someone call zoning, and it's all about, A, where you buy the house. And how you upkeep the house.

Speaker 5 [36:30] And that's, that's the, like, that's the very practical, when I actually ran that by the, the CEO of that company I was telling you about, Pat Split, the largest one. I said, hey, like, how are you guys? whats this? How are you guys getting around? Because they have a promise. They say, if you ever get a violation from the city, and you're using their platform, they will fight it for you that a huge legal budget. And they're winning their battles. The way that they're winning their legal battles is basically by making the, instead of them being tenants, their members. So like you would say, I would, instead of signing up 8 tenants, I would sign up 8 members.

It's like a legal strategy, but this is the legal answer. I'd sign up 8 members, and then I would lease it to that company that has those members. And that's how they're getting around it. But in Charlotte, it's not a big. in Charlotte, I think the general zoning is you can have up to 6 unrelated people in a home. Those walls were built for prostitution houses and undocumented workers. Like that was why those laws were originally created. They were not created to regulate what we're doing. So Mecklenburg County is actually coming out with new regulations to regulate this. It's brilliant.

I think it's really great because they're saying like, hey, the landscaping has to be, like they have a technical term for it, but landscaping has to be like this. You have to have a common space. Can't take, like, I couldn't have taken that dining room. And turned it into a bedroom, even though I might have wanted to. Like they're doing some things like that. They're saying you can't have these within like a mile apart each other. So you can't just buy up a whole street.

Speaker 3 [37:44] So that's how your stuff is coming out and hopefully that is somewhat of an answer for you.

Speaker 5 [37:48] Yeah. And I figured this question would come up and I was thinking about it because one of the big objections I get to co-living is like, hey, isn't that so much more management? If the systems are done correctly, like, then it's slightly more, it's 0 more than, say, an 8 unit multifamily. Because I have 2 refrigerators. If you have an 8 unit multifamily, you have 8 refrigerators. You know what I mean? So it's less than that, but anyway, to answer your question directly. We want a property management company. We manage them. There are a bunch of startups now that are Alcove is a startup out of Raleigh. that's managing these for people.

Bungalow, and they're the tech platform that gets the tenants and works with any disputes or anything that happens in the home. And then pad split is, of course, the base. Yeah, so furnish common areas. Cover utilities. So in that way, it's kind of like a short-term rental, and you just run your numbers and make sure that you're you're good on what you charge, you know? Yeah, good question. By the way, I love what he just said. I don't know if everybody heard that. He said there was no such thing as bad tenets. There is only bad screening. And we have definitely learned that in our process. There is a vetting process for this, that goes along.

That is very, very, very important, so I'm really glad you brought that up. Yeah. I got 2 students in New Hampshire. I got 2 students in Delaware. They just bought their 1st couple. They're filling them. Because it's so expensive up there, man. They're really... So he, he, he's asking just to repeat the questions, everyone here. He's asking, can you, does it fly from an eviction standpoint? If you go to a lawyer and you say, hey, he's in room three, I need to get him out, he's not paying his rent, or he broke the house full, so I can elaborate on this. One, your lease has to be written where you can evict for house rules breakage.

So we write all of our leases with an addendum that says, hey, these are the house rules of this house. If you break them and we have the ability to evict you. Two thoughts on the eviction side of things. One, yes, you can evict. It's very easy. We do it, I want to say it all the time because that's not accurate, but like, we do it. And it's the exact same process as if you were evicting, like, we did have to have a sheriff go, and they remove the belongings, they put in the front yard, and it's fine. that's fine. So that part is fine. I will also say that evictions happen, like there is a ton of social proof in a house like this.

So if you have someone living in a room and a pay or vacate, goes on their door, like everybody knows, like it's, you'd be surprised how many people are just like, peace. I'm out versus like, I'm squatting in this home, which is much more common in single family. If that makes sense. So I would say over the last 15 years of doing this. And by the way, when I 1st started doing this, I had 0 releases. I was just like, yeah, you can pay the rent, cool. signed on this thing, and it was like the guy would just, yeah, like I did have somebody squat, right?

Sam Wegert [40:21] And I was like, I didn't have a lease to even try to get them out. But yeah, and I would just point you to the, I'll even share. Maybe I'll have Rodrigo and Zach send it out in the email.

Speaker 5 [40:30] I'll share the the official recommendation from HUD that says housing choice vouchers can be used for these types of places. And we recommend every municipality look at this as a solution to affordable housing. The best advice I could give you for that would be this, and it's like my, it's what's happening is this. If you sign these people up as members, not tenants. Then you are able to overcome that legally.

And I know that for a fact, like, I'm not a lawyer, so I don't want to stand here and like give you that, but I know that for a fact, if it was a zoning issue, because I've talked with Pat Split about this and they're the largest company that they have units, a lot of units in Florida, and that's how they get around it, is they will rent it to members. And then that company is the one that has the members and those members get to use the property.

Sam Wegert [41:19] Okay, all right, let me not take you an A now. Okay, here's another home. I just wanted to show you from a floor plan standpoint. You walk in, you got a dining room here and a kitchen. This home is in Fairview. actually, if you got right here and here. You got a bedroom, you got a living room that we turn into a bedroom, you have a middle. This was a really cool home. Again, it sat because it was not updated, and it sat because it was, it was like a weird layout. Like it had, if you look, it had like one floor.

It had 2 floor and it had this weird like 3rd floors kind of off this mountain, no views or anything like that, but just a, so what ended up happening is you go downstairs, you had your master, you had a bedroom, you had a bedroom, and you had a bedroom on the side, there's a little kitchen, and you had a workshop here. So when you're looking at floor plants. One of the things I always ask is like, if I'm going to look at a home, I'm immediately going to ask for what the floor plan looks like. And from there, I'm going to try to parcel it up and see how I can still have a community space, but also be able to get the maximum number of rooms.

Now in this particular home, you've got the garage here. It would have been a really cool, fun conversion, but we just didn't want to do it.

Speaker 5 [42:24] We had enough rooms and the numbers already worked out for how we bought this house as a $315,000 buy with 15,000 in a concession. And I think it was about 8 or 9 months ago that we bought this song.

Sam Wegert [42:34] Okay? So we've got this one. We got that one. So I'm gonna go. This was the home, by the way. I just wanted to show you this. This was the 1st floor plan that I showed you, the very 1st floor plan that we showed you just to give you an idea. So I'm always looking for like, hey, how does this home affect the neighborhood, right? So we've got plenty of parking, like the finishes were actually decently nice in this home. I had some electrical issues we had to take care of. But just this idea of this. A lot of times what I'll do when I'm looking at homes is I'll just go to Street view.

Speaker 5 [43:01] We'll see if the internet actually cooperates with us here. And I'll just find out like, okay, is this home gonna be good in the neighborhood?

Sam Wegert [43:07] Now this home, it nets probably $3300 a month. So it's worth doing this little extra like, oh, is there street parking? Like, okay, great. There's plenty of street parking, parking's not going to be a problem. Maybe I would even back out. I would do, uh, satellite view. I'm just showing you kind of what I would look for, right? Like, okay, I know this house right here is the one that we purchased on end of a street, boom, sap, weird layout, but perfect for co-living. This was the next one. I lied. I said 350 I think I said, 315, 325. This was the next one. We just did this one in Fairview, again, just to kind of give you an idea of it was, it actually was a 3 story home, which was odd.

That was the room we turned into a bedroom.

Speaker 5 [43:48] Again, clean, quiet, and safe. If you can do those things and give people a lock on their door and give them the ability, a common space, but I'm just giving you kind of that idea. And I have people ask me, this is another one, by the way. We have in Black Mountain. We have done. I don't have the updated pictures on this one, but this was an old church home. This is actually nine. Again, sat on the market for a long time.

Sam Wegert [44:10] This is a 9 bedroom, 8 bath home. And it was an odd home, right? But it just sat. Like, who's gonna use as an old, like, church retreat home and what does that look like? So the last one, I get people that ask me all the time, they'll say, hey, Sam, like, I get that you're able to still find deals, that cash flow, our minimum is a 20% cash on cash return.

Speaker 5 [44:29] So that's what we're looking for. Maybe just give you an idea. Like, I won't buy a co-living house unless it's a 20% cash on cash return.

Sam Wegert [44:34] And people ask me like, well, you're finding deals, but you've been doing this for a while. Like, are your students finding deals? Are other people in the world finding deals? And I literally probably 2 weeks ago, one of my students who's investing in Greensboro and Winston Salem sent me this house. I wanted to show it today. And he said, Sam, the realtor already told me they would take 450 for this house. You can't even see because the light. Anyway, it's 18 bedrooms. The light is like in the way. It's 18 bedrooms. It's a 10 bath home. Like you would need, with this many people, you'd need to talk to shitty about it, but it's got a weird zone.

It was an old bed and breakfast, and here's the crazy part. It's sat on the market for 543 days. It's still not under contract, right? My point saying all of this is that sometimes the odd homes are really the ones that do well with co-living. People ask me for 2 things. If you want to deep dive in this, after my episode on bigger pockets, I started teaching more. I started coaching people on how to do this in their cities and I'm proud to say that we have, I don't want to misspeak here, but I want to say 12 new cities that have watched co-living spaces through my students. That's really fun. And I'll give you a spreadsheet.

You get a spreadsheet, how I evaluate all the deals, and you'll get some videos. It's like a three-part mini course that just goes a little deeper that I wasn't able to cover today. So I'd love to be able to share that with you. And you just need a tech house, the 704, 610, 0425. Cool.

Speaker 5 [45:49] Yeah, it's always a year, but there's a 6 month, same as an apartment. Like, hey, you can do a 6 month option. It's gonna be at a premium, and we offer a 3 month option, that's at a premium too. But I, what I would say about that is we did away with all month by month leases because we just didn't want the turnover in these homes, right? Like my goal is not, this is not. I'm not trying to be like a combination between long term rent and short term rent. I'm trying to be long-term rent. But I'm trying to be these people, it's shared housing. Right? And if I can provide clean and quiet and safe, then they can get a one time, you know, they pay one amount and they're good.

It's just a really easy in for them, but they do sign 12 month lease. The one thing I would say on the lease is you just have a really good addendum for house rules.

Sam Wegert [46:27] And if you can evict for house rules, that's going to be really, really important. Yep. The question is, how do you make clean? How do you make quiet and how do you make safe? So I'll go quiet? Is headphones hours?

Speaker 5 [46:39] Everything transitions over to headphones at a certain time, 10 o'clock on the weekdays, 11 o'clock on weekends, right? That's a house rule. They initial that, they sign off on that before they sign the police. So that's one thing. There are some other things, but that's the biggest thing, I would say.

Sam Wegert [46:51] The clean. We will clean common area once or twice a month. It just depends.

Speaker 5 [46:59] We used we used to do once and we had a way. Yeah, professional cleaning and cleaner goes. keep in mind, you're not cleaning all of their bedrooms. You're just cleaning the common area. So it's usually a pretty smuggling job. But they'll go in and clean that and the cash flow is enough, you know, you can, you can provide that and that way that the commonary gets reset. And then we have this like pretty hard rule, that like 0 personal items in the common space. So if someone's like, oh, like, I want to bring my couch in, like, no, I want to bring this in or I want to leave my laptop. It's like, no, like everything goes back to the rooms. Safe? Just good, yeah.

background check, credit check, full background check, full credit check, screaming interest, um, all key list entries.

Speaker 3 [47:33] Yeah, keyless centers on the outdoor, keyless keyless entry, actually even on their door.

Sam Wegert [47:36] Yeah, yeah, it's just a little, b, b.

Speaker 5 [47:39] Yeah, he's saying, what does the common space look like? Common space looks like labeled cabinets. So like room one, room two, room 3 uh, it looks like labeled refrigerator space. And yet 2 refrigerated for anybody over 6 people on a home is the formula. And yeah, a really nice furnished common space, like a couch and workstations, just no TVs.

Sam Wegert [48:01] That was one thing we found out we're like, oh, we'll put a big TV and everything. That'll be awesome.

Speaker 5 [48:05] It was like, 0 my gosh, like, no. source of contention, noise. It's just not a good idea. Like you can watch that. Headphones hours still applies. You can watch that in your room and go from there. Yeah, thanks. Pad Split does a lot of them actually. And I have floor plans for how they do them, and they're really good. So we're take, but that is my next plan. So the answer is no, I've rehabbed to suit, but I have not ground up to suit, but I really, really, really, really want to. And what I'd like to be able to do is build something bigger with the guy in Germany, was telling me to do. I actually got his plans that I've been like mapping it out.

That's what I'd really love to be able to do because we're seeing that and actually there is a company out of Austin that just did a $50000000 co-living development in Charlotte. Now here's the catch. They're building it near the university. So it's gonna feel a lot like university housing. But they're offering incentives and you've never seen this before. They're offering incentives for firefighters, 1st responders, teachers, like they're giving these little discounts, right? So it's like it was really cool to see that. You're like, okay, this is cool. If you're going to build 150 rooms from the ground up. Yeah, for sure.

Unknown [49:11] Right.

Speaker 5 [49:12] I've had one fight. It wasn't with the city. It was with the HOA. Where I had to put everybody on a master lease. So I had to say, all right, they're all on a master lease. versus individual leases, and that's, that is the extent that I've ever had to fight it. What's the resale value issues that might happen from rehabbing a house for co-living. And the answer is you just need to be, like, coherent with the house. Right? Like if I, if you do, if you put a bathroom in the middle of the kitchen, like it's just gonna be really bad, right? We did a really weird thing with one of our homes and it was an issue. It was like a, we made a maze.

It was one of the 1st ones I ever did, and it was like, you had to walk, you had to turn, and you had to come around, and people did get feedback like, ah, it's just odd how you did it. And I was like, yeah, but all the other homes we've sold it because we've sold some cold living houses right now hasn't been an issue. Yes, her question is just like, how are you getting tenets? and right? How are you getting? How are you advertising? In exactly the same way you would advertise for, for an apartment actually. So Zillow has a way you can actually list a room for rent now. But believe it or not, Facebook marketplace.

Unknown [50:16] Yeah, yeah, yeah.

Speaker 5 [50:18] Facebook Marketplace. She said she thinks she's seen a few of us. That's awesome. Yeah, check it out. Facebook marketplace is good. Believe it or not, Craigslist, we just have that out. And we have enough rooms right now where we do actually pay for some Google leads, but other than that, it's all free advertising. We not paying anywhere else. Maybe Zillow chargers, I think, per week now. For a list in a second. I did, yeah, my wife is like, don't give it away. No, it's cool, man. cool, man. Well, yeah, yeah, I taught a cool living course. And at the end of the politing course, this is just a cool story.

This is like just how cool people, but like, it's kind of irrelevant, but I'm going to tell you anyway, because I started, at the end of the collating course, the guy didn't buy my course. But he texts us and he says, hey, Sam was, Sam added so much value. I wanna send him a ton of cash. And we thought it was a scam, but he ended up being a hyper for a lawyer in Delaware. And he goes, I just spent, he listed the number of hours and how much he makes per hour. He goes, this is a $12,000 lease. Here you go, and you Venmoed us a $1000. It was like the coolest, and I never met the guy. It was really cool. But anyway, his lease is like a $13,000 lease. according to, you know, his billing rate.

It is really good. We were like, okay, steal that, steal that. I thought you were asking me to kind of compare this model from a cash flow standpoint to short term, you're not. Yeah, some of my students are doing it for traveling nurses and that seems to be the thing that just, they do have to furnish the rooms. I don't. That seems to be the biggest thing that works really well for them, but I've never personally tried just Airbnbing rooms. Because for me in our model, I just kind of want to buy it, set it up, and then treat it like a long-term rental buy it, set it up, treat it like a long-term rental one. We'll come back to it in a bunch of years, you know? Does that answer your question?

Sam Wegert [51:58] Okay. So basically, no. I have not tried renting out a home just by the room all on Airbnb. What I was going to say earlier is like, guys, I mean, like short-term rentals are great, right?

Speaker 3 [52:10] The cash flow is great, but I was gonna, like, we have 2 full-time people. Really, probably more than that, like 2 full-time people, right? Maybe 2.5 . And they run 14 short term rentals.

Speaker 5 [52:21] And I have one. 5 full time people that run 150 rooms. Those would do that have short term rentals and know that, like, right? you're running. you are running a hotel or someone said hotel at that point. The short answer. So his question is, does it make sense to have like city sewer and water? Is that coming? Versus private, like a well and septic. I have probably at least 5 of these on septic, and I just try to pump them a little bit more often. Yeah, I've never had an issue with that. Obviously, I would prefer cities up in the water, but that's harder to find in Asheville. It's easier and sharp. So yeah, great question, man.

Unknown [52:58] Great question.

Sam Wegert [52:58] How do you control AC and heating?

Speaker 5 [53:01] It is a 4 digit pin code, thermostat, and in the lease, it just states head, 72 in the, Summer, 68 in the winter. That's just what it is here. You don't like that? Don't initial that box and don't sign up. This is a good question. She says, are they allowed to have like their own like AC or heat? and we, at 1st we allowed that? And we thought, but then like, it can put a tremendous strain on the electrical system. So then we stop a lot. First, we're like, ah, just get a space heater. fine. But then you like, it's not. here's what it is and people will adjust.

Sam Wegert [53:32] Yeah, do we allow heaters and coolers when rooms are different temperatures? It is true that there is this dynamic and it's just, it's not been a big issue. It's not been a big enough issue for us to have to come up with any other system for it. Like, they sign off on the temperatures, they kind of get that.

Speaker 5 [53:48] Here's what we have shide away from. I just showed you a 3 level house. The 3 level houses are a little harder. This one that I showed you actually has 22 HAC units, so it's fine. We had one, we have one 3 level home that has one HAC unit, and it's a pain, it is a pain in the ass, but we're selling that one, so it's fine. What I find really interesting that nobody asked in this room, and it's probably the most common question I'd get. So I just, I think it's cool, is like, how do you get all those people to get along? Right?

Like, I, I, I, that's normally a really popular question that I get, but, but, and my answer to that is like, it's not an, if they understand what they're going into, it's probably the least of our concerns is actually the tenant communications. So anyway, I thought that we were really interesting. Justin says you get a dominant head of house. We do, we give one person $25 a month off their rent and they become house manager. Yeah. So they'll post pay or vacates. They will make sure the trash is taken care of. And there's actually like a little 4 point little job description that they have to do every month. I mean, it's super simple, but it's a good little deal for them. Yeah.

Speaker 2 [54:44] Cool, for samples.

Unknown [54:46] Thank you, that, yeah.

Speaker 2 [54:52] All right, so... couple of things. First thing, text house, if you haven't already. If you're on our email list, we'll also include the number, in case you don't have a phone on you for whatever crazy reason. Second thing, make sure to please bust your tables, tip really well, guys. We're all real estate people, don't get real estate people a bad name. And next month, on the left hand side, feedback survey. Guys, we are trying to do our best to put together events that are actually valuable to you that you want to show up for, and that you'll tell your friends for. We are not mind readers. So please let us know what is good, what's bad, and what you want to see different.

If you tell us those things, we can make changes. For instance, one of the things that we found out is that the volume sucked. I think if you come through the last 2 meetings, the volume's been a lot better. We didn't know the volume was bad because nobody was telling us until somebody told us and so we made a change. So if you guys give us feedback, we can make changes. RSVP for next month, we're going to have a panel on rehabbing houses. So if you've ever been interested in rehabbing house, whether it's a fix and flip or for rental purposes or for whatever the purposes might be, please RSVP.

Other than that, buy another 2 or 3 drinks, talk to people, put some deals together, and we'll see y'all next month. Thank you guys.