February 14, 2025 • 40 mins
In this episode of the Generations of Wealth Podcast, host Derek Dombek sits down with Johnny Wolff, the founder of HomeRoom Co-Living. Recently acquired by Bungalow, Johnny has been at the forefront of revolutionizing real estate investment through co-living. Discover how investors can generate 50% more rent, manage properties remotely, and navigate city regulations while contributing to the affordable housing crisis.
🔹 What is co-living, and why is it growing?
🔹 How to maximize rental income with shared housing
🔹 The biggest challenges and how to overcome them
🔹 Navigating city regulations & compliance
🔹 The future of co-living and real estate investment
📢 Mention this podcast ( THe Generationf of Wealth ) when booking a consultation and get a $2,000 construction credit!
🎧 Listen now and subscribe for more real estate investing insights!
🔗 Learn more: GenerationsOfWealth.com/homeroom
Key Takeaways:✔️ Co-living can increase rental income by 50% or more compared to traditional rentals.
✔️ Managing shared housing is complex, but companies like Bungalow and HomeRoom streamline the process.
✔️ Regulations can be a challenge, but long-term rentals are more stable than short-term rentals.
✔️ Investors should consider creative financing strategies like seller financing and subject-to deals to optimize cash flow.
✔️ The demand for affordable housing is booming, and co-living is a scalable solution.
Why Listen?🏡 If you’re an investor looking to boost cash flow, learn how to convert properties into high-yield co-living rentals.
🚀 Gain insights from an industry leader who built and sold a co-living company.
📈 Understand the regulatory landscape and how to protect your investments.
💡 Get actionable tips to start or scale your real estate investment strategy today!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
My goal is to continue to chip away at thisproblem, right? To help investors make more
money by buying co-living houses, to make theirexperience owning the house is really seamless,
but also provide a ton of affordable housingunits everywhere.
(00:29):
Welcome to Generations of Wealth podcast. Iam your host, Derek Dombeck. And today we are
tackling the problem of affordable housing andhome living. Oftentimes we all look at possibility
of maybe the government is going to supply the,you know, the shortage of housing. And we all
(00:50):
know that's not gonna happen. So today I'vegot Johnny Wolf with us and Johnny, he founded
Homeroom. which has just recently sold the bungalow,but it's a platform for co-living and sharing
space. So awesome, awesome episode. Before Ibring Johnny on, again, thank you so much for
(01:12):
following Generations of Wealth podcast, helpus expand, spread the news any way that you
can. We really, truly appreciate it. Jump ontoour Facebook group, Generations of Wealth Facebook
group. anywhere you see us on social media,share it, like it. These are all the things
that we all know we need to help each other.So with that, let's get onto our show and here
(01:39):
comes Johnny Wolf. Well, Johnny Wolf, thankyou for being a part of the Generations of
Wealth podcast. Appreciate your time. Why don'tyou tell my listeners a little bit about yourself?
Hi, I'm Johnny Wolf. I'm the CEO and founderof Homeroom Co-Living. And we recently were
actually acquired by bungalow, which is thelargest player in the colving space. So I'm
(02:03):
helping them basically help investors buy andrent out colving homes. A little bit about
my kind of background. I started my career inthe Silicon Valley in finance and started to
do real estate investing shortly out of college.And found that I was making a lot more money
from investing remotely. and real estate thanI was from my day job. So I moved to Austin
(02:26):
in 2015 to invest in homes relatively full-time.I rented out each of my homes by the room and
in Austin at that time, there was a lot of demandfor that. And so it went really well. What
didn't go super well is managing roommate houses,which kind of was a bit of a mini nightmare
(02:47):
every once in a while and generally not thatbad. So I started Homeroom. which is one of
the, until we sold, was one of the larger co-livingcompanies in the country that ran roommate
houses and helped investors find homes remotelyas investments and rent out each room separately.
So we did that from 2018 to 2024, and we soldthe bungalow just now, and now we're kind of
(03:12):
taking the next step with them to help investorsbuy co-living homes as assets. So that's kind
of, that's a bit about me. Well, there is awhole lot to pick apart there for sure. I'll
give you a little bit my background with theco-living side. I did the same thing with a,
(03:35):
used to be a group home and then we turned itinto a 12 bedroom, six bath property and again,
leased it out per bedroom usually on a nightlyor weekly basis. So I am familiar with the
management side of that. and the joys of managementthat can come from that. But I guess before
(03:57):
that, how did you decide what was your startin real estate and then how did you get into
the co-living scenario? Yeah, I connected througha family friend to someone that was running
a property management company out of the PermianBasin in Texas. Midland basically, Friday Night
(04:24):
Lights is based out of. It was in 2008 and youcould do 10% down investment loans at that
time, which was sweet. So I bought a new propertyfor like $96,000. dollars and you know, it
went really well. So I started to do that again.I bought one with myself directed IRA and a
(04:45):
few and did a few other real estate investments.So that was really what got me started in real
estate investing. And, you know, it was, youknow, definitely had a few negative moments
where we had like a heavy turn, someone leftand was $10,000, which I think is a good experience
for any early investor to have. So you can kindof be ready for that. the inevitable downside
(05:08):
of real estate, but the upside was really good.When I sold that property, I made $100,000.
In my 20s, that was a ton. So it was reallyexciting. You're telling me you couldn't just
buy houses in California for $98,000 with 10%down? Yeah, I spent a good amount of time looking
and now I couldn't find anything really. Sogood, great question. I'm shocked. Yeah, yeah.
(05:31):
So with the co-living side of things though,I mean, you know, Obviously, affordable housing
is an issue all over the country. What is theadvantages of doing that? And then how do you
how do you set up a building for that? Yeah,the advantages, you know, there's a number
(05:52):
of them. One is that we're trying to get 50%more rent from the same house, right? So we,
when people come talk to us, we show an exampleof a property that one of our investors bought
and it was renting when they bought it for $2,000a month. And then by the time we had finished
setting up and renting out by the room, it wasrenting for $3,000 a month. So obviously that's
(06:14):
a compelling math equation. Right, 50% morerent and investors like more rent, at least
the ones I know. So, you know, that's the bigkind of reason that it's appealing is that
you can drive the revenue higher. It is a morecomplicated management approach. So, you know,
(06:34):
fees will be a little bit higher, there'll bea little bit more headache, but the good thing
about a company like a homeroom or bungalowis we do everything, right? So we have a lot
of expertise in doing that. I definitely knowa ton of people that did house hacking slash
roommate rentals by themselves. And I've doneit a ton myself as well. So that's an option
too. And, you know, I'm always, uh, I wouldget emails every once in a while about people
(06:56):
who are renting out by the room themselves andfor tips and tricks. And we're happy to share
those because it feels like, uh, you know, it'sreally helpful in today's affordable housing
to help itself. Did you run into a lot of challengeswith different municipalities? Um, as far as
(07:16):
short-term rentals or non-related parties livingin a property together, ordinances, how do
you get around that assuming you did have thatchallenge? Yeah, that's a great question. The
short-term rental is not a challenge for Homeroomor for bungalow. We generally, the minimum
(07:37):
lease is three months. Most jurisdictions don'tconsider anything over three months short-term.
Some consider anything short term and then we'lladapt to that. So we're really long-term rentals
at its core.
There are options out there that will do shorterterm and you mentioned you do weekly, which
(08:00):
are daily. Wow, that's a lot. Let me clarify,I did. Okay. I don't anymore. Okay, yeah, that
sounds challenging. Just say the least. Youknow, when you have single family rentals,
not as many variables, you add shorter term,you add more variables, you add multi-people,
(08:23):
more variables. So I think doing short-termrentals or multi-people rentals, I would do
either or, but together, it's going to be aninteresting experience for sure. Yeah, so and
then in terms of encountering with municipalities,like We are aware of city restrictions. That's
(08:44):
something that we do. We sort of, we think of,you know, returns and risks. They're both along
a spectrum, right? Short term, you know, wethink of single family rentals. Returns are
the, maybe the lowest. The rent's gonna be thelowest, right? Co-living is gonna be in the
(09:04):
middle and then, and at the top end is gonnabe a short-term rental. And then we think in
terms of compliance or city risk, short-termrentals will have zero risk. Typically, there's
some fringe, but not much. Colonial will havesome risk and short-term rentals will have
a lot of risk. So just like anything in investmentsin the world, the more risk you take on, the
(09:26):
more returns you can possibly get. So we havea protocol in place for, how we address that
with our investors. We say, hey, are you interestedin pushing the limits of occupancy that the
city has? Right, we have, there's one operatorin the space who does that with nearly all
their properties. And they have a process fordealing with cities to mitigate the issues
(09:48):
when they come up. There's other operators inthe space that just fully comply with the city's
operation policies. And you can kind of do eitheror. The reason we think of this as a much lower
risk than something like short-term rentalsis short-term rentals can get turned off like
a light switch. Like in San Diego, they wentfrom you can have short term rental as many
as you want to you can have one if you liveon site, massive change, right? And there's,
(10:13):
so it was co-living and roommate rentals, they're,you know, it's more they'll turn you down,
they'll dial it back versus like turn it off.So that's what we'd like about it in terms
of risk mitigation. So yes, definitely an issue,definitely an issue that the industry faces.
But when handled well, we think it makes sense,the risk profile makes sense for the additional
(10:37):
returns you get. So in terms of the propertyitself, you've got a single family home and
maybe a three bedroom, two bath house. Are youjust utilizing the existing layout or like
in my case, I took all the common areas, livingrooms, formal dining room, all that stuff,
(10:57):
I turn it into bedrooms, you know, put up partitionwalls, things like that. What What does your
model look like? Yeah, we were open to, I wouldsay typically we're more in the customize the
space model. Right? We, you know, one of thethings that bungalow has is they'll get more
(11:20):
rent than a typical roommate rental companybecause they have better technology and kind
of a better experience, right? So there's somepremium to it. So we can get away with fewer
bedrooms than other operators and still do reallywell financially. I think the challenge, you
know, when you have extra space and you canturn it into bedrooms, it's a lot of money,
(11:41):
right, this big margin, the cost to create abedroom is not terribly high. So it can, the
more bedrooms you add, the more of the riskprofile pushes up the investment, but also
the higher the yield and performance goes potentially.So we will do both, but we'll kind of share,
work with the investor, what's your risk profile,how much do you want to invest upfront. there
(12:04):
is risk here with the city. How do you wantto manage that? And how do you want to think
about it? And so that's really sort of our approach.We'll kind of go super conservative with less
or we'll go more aggressive with more. And it'skind of up to the investor to choose their
own adventure there. Well, an adventure is probablya great word for it because on the surface
(12:27):
you're like, well, great. I can add an extrabedroom or two bedrooms. Now you've just added
an additional one or two or three tenants, whichadds another one or two, three, um, different
challenges when it comes to personalities andpeople getting along and things. What, what's
your experience been with, um, the social aspectof it? Yeah, no, that's where we really thrive,
(12:55):
right? Because we've, you know, between the,between a bungalow and homeroom, we've housed
10,000 roommate tenants. And so we've built,you know, we've used the investment from Metro
Capital to build a really beautiful meet andgreet system where the roommates and tenants
meet each other before the move in. All themove in process is heavily automated by technology.
(13:17):
And then we have built out really robust tenantsupport teams to support those issues, right?
We've seen every type of roommate interaction.Oh, actually that is, I'm gonna knock on wood.
We've seen a lot of roommate interactions. I'msure that we'll see new ones and it'll make,
(13:38):
you know, it'll get an email on the weekendand it'll be even crazier than possible. But
generally, you know, it's about managing complexity,right, every business is about managing complexity.
And this is something that we've gotten extremelygood at managing the complexities of co-living
and roommate interactions. So it's not reallysomething an owner has to worry about. We very,
(13:59):
I can. I cannot think the last time we've hadto get an owner involved in roommate issues.
But we, as we handle it. Yep. Um, any dead bodiesyou've had to deal with Johnny? Are you talking
about metaphorically or realistically? No, realisticallytenants. Oh yeah. Yeah, I mean, I think every
landlord has, so yeah. It was, yeah, for sure.I always ask that question because a lot of,
(14:24):
and I'm in Wisconsin and the upper Midwest,a lot of mom and pop investors, so they don't
have a lot of properties maybe, but in our groupsetting, we did have one that passed away and
what I found interesting, out of 12 units or12 bedrooms in that property, about half didn't
(14:46):
even know it happened. The other half didn'teven care. And it wasn't foul play. I mean,
I've had those too, but this one wasn't. Butultimately as a property owner, we can get
nervous about, is this gonna negatively putsome kind of hex on our property? Meaning nobody's
(15:07):
gonna wanna live there ever again. And... Itcrossed our minds for sure, but you know, it's
amazing what you get used to in this businessand you deal with it and you move on.
Yeah, well said. Well said. It's amazing whatyou get used to in this business. Indeed. You
(15:29):
kept saying we. So when you established andstarted to build Homeroom, I mean, I'm just
assuming that this came with a lot of tech,a lot of, you know, software and other things
below or, you know, other things that you haveto deal with. What, how did you even get, past
(15:51):
the idea of I wanna do this and take those firststeps. And who was it with? Did you have partners
or is this all you? No, I started Homeroom asmy, yeah, I started Homeroom myself, but I
did bring in team members over time and differentteams at different phases of the business.
(16:15):
And as we sold a month ago, we had 47 team members.So, and a lot of those got to join bungalow.
So it's definitely been, anytime you're gonnascale to you know, a thousand plus roommate
tenants, you're gonna have to bring a wheelon because it's operationally complicated and
you know, we had investors as well. So numberof different pieces, all those pieces are really
(16:40):
necessary to build in this space, which is atsize starts to get relatively complicated if
you wanna do a good job for tenants and forinvestors. But we got very, we got there. So
I'm pretty happy about that. No, congratulations.I mean, it's... It's I know what it's like
building businesses and, uh, and then takingon staff and you just, yeah, you take a leap
(17:04):
of faith pretty much every day. You get up,right? Every day, man. Yeah, definitely. That
pressure is pressure is very real. Yeah. I thinkit, and I don't, I'm only, this is my. First
business with a team. So it definitely is adifferent animal. When you start to have the
(17:27):
team interaction cross, you know, when you'reremote, you're across multiple states, all
these different pieces add little layers ofcomplexity and definitely ratchets up the pressure
just a little bit. Yeah, for sure, for sure.Did you have a lot of your team overseas or
was it all in states? Yeah, you know. Co-living,single-family rental, short-term rental, all
(17:55):
these are operationally property managementheavy businesses. A lot of them are fueled
by tech innovation that makes it even more efficient.But yeah, a lot of the team is necessitating
to be overseas, right? To drive down costs becauseyou're trying to optimize the equation for
investors, while optimize the equation for thebusiness. And our overseas team was invaluable.
(18:16):
Some of them are spectacular team members. Sowe're really happy to be fully global. We became
fully remote in 2019 before COVID and it wasreally helpful. And I think it gave us the
ability to kind of grow really quickly withnot a lot of investment or capital. So it's
(18:39):
not easy though. There's definitely little challengesto overseas team members. There's time zones,
there's native English fluency. isn't there,even though they're excellent at it for a second
or third language, but it definitely, it savesyou a lot of cash. It adds a lot of horsepower
and it adds a lot of complexity. Well, a hundredpercent. And as my team, who is partially overseas,
(19:05):
is, you know, working on this podcast episodeand puts it out, I appreciate you, but it's,
you know, no, it, it honestly, Um, if I wentback 20 years or 21 years ago, when I started
in his business, trying to even comprehend whatwould it be like to have people all over the
(19:26):
world working with me and for me on my behalf?I think it would have been impossible even
fathom. And now it's impossible even fathomdoing it without them or, or people like them.
Um, it's definitely a global business now andit's, and I love it. I think it's, it's great.
(19:46):
And the same thing with co-living. Co-livingisn't brand new, right? That's been around
for thousands and thousands of years, but withinnovation, it can be so much better and smoother,
which I guess leads me to the next questionis, what do you see for the future of co-living?
(20:08):
Yeah, I think one of our investors, venturecapital investors, his belief is that coven
is inevitability, right? Is that some versionof technology colliding with real estate investing,
colliding with housing, necessitates co-livingto be done well. And I tend to agree with that.
(20:30):
I think it's complicated and nuanced in itshousing and its community and it's all these
pieces, At in every market that exists, rentinga room is cheaper than renting out a studio,
right? This is in Thailand, people do co-livingin Thailand. You know, we've had conversation
(20:52):
where it's like, why isn't this only in SanFrancisco? Well, because it's cheaper in Thailand
too, right? And some people are looking to optimizecommunity and they're optimizing price where
they live. So there's a need and I think itcan be done better. globally. And I think the
opportunity is global. I think it's challengingand difficult because you interact with property
(21:17):
operations. But we're seeing some companiesin Europe, some companies in the United States
like bungalow and other players expanding someof the fastest clips that we're seeing in property
operations technology in the entire industry.So the need is there. It satisfies a massive
need. The question is, how do you optimize allthose equations for the value for the owner
(21:41):
and for the tenant. And then how do you getit out there as quickly as possible through
technology? So I see the opportunity is massiveand big. I think it's not a if, it's a when.
And I think the question is, is like, when willa lot of smart people who are actively working
on this problem get to the point of solvingit? It's just like, I almost see it sort of
(22:03):
like, it took forever. It felt like for youknow, everyone kept saying this is gonna work.
They had Dragon Software. RCO worked on voiceto text in the 90s. Like they had a bunch of
Stanford guys. They got nowhere, right? Andso I think this is a problem where it's like,
we could write it off that it's had its bumps,but I think it's inevitability. And the question
(22:27):
is, when does it break through? Yeah, and Ialso would say, and this is maybe, a California
conversation. And I don't get political, butI just have my own opinions and I don't necessarily,
I'm not always PC. Using California as an example,right now, as we're recording this, there's
(22:51):
fires going, there's a lot of devastation inCalifornia. And there's people talking about
the rules and regulations and all the red tapeon not only getting the fires put out, but
then rebuilding. And, you know, as you mentioned,this stuff kind of takes forever to take hold.
(23:12):
And then one day it almost feels like a lightswitch was flipped, but we all know that's
not the case. How does regulation and red tapespecifically to co-living hold back the growth?
Because I know just, just with the buildingthat I own, we have a conditional use permit
(23:34):
with the city. So we know that if they changean ordinance or they change a rule, it's not
going to affect us. But I also have lots offriends in other parts of the country, specifically
in Georgia, Atlanta markets, all the suburbsof Atlanta. There's a company down there called
PadSplit that was very popular or is very popular,I guess. And they have had some major struggles
(24:01):
recently because of... different communitiesand different neighborhoods and all that the
red tape, right? How do we get past that? Yeah,that's a big question. And I think, and I know
(24:25):
CEO of PadSplit and I and I think all the folksin Co-Living, we kind of talk, we kind of watch
each other and kind of understand. So I knowAtticus and PadSplit. I think everyone's approach
to this is a bit different. I think their approachhas been almost like the Uber approach where
(24:47):
we're going to just do the deploy it, and thenwe'll work, we'll have this, we'll ask for
forgiveness, not permission. I think that approachgenerally in these kind of situations may be
right. It's hard to know what will be the breakthrough.I think at a federal level, there's a Dodd-Frank,
(25:13):
Um, sorry, not Dodd-Frank. There is a nationalkind of, uh, Supreme court ruling that actually
kind of. Belter, sorry, that's the correct one.That sort of influences what cities are allowed
to do, but there's a kind of a groundswell currentlygoing on with regulation and we Homer was actually
in federal court right now fighting that againsta city and I know Pats was doing the same thing.
(25:39):
The reality is. for cities to arbitrarily definewhat a family is, they maintain, we think that
is, just doesn't make any sense, especiallywith the housing crisis, especially with kind
of like, when you look at, you know, how, youknow, why do cities get to do that? So I think,
(25:59):
you know, the long, the best, most completeway of it is getting kind of rid of that, the
Belter kind of, you know, Supreme Court rulingand just say, No, you can't really define what
family is, unfortunately cities, cause somepeople say a family is related or it's two
people, which we think is kind of wild. So there'sa lot of push there and there's a lot of people
(26:22):
that can't afford housing. Right? So that'sa simple solution, very quick. And especially
with fair housing laws being as they shouldbe in place, right? I mean, nobody should be
discriminated against. And yet the cities areable to discriminate just because they can
deem what a family is. Well, in this day andage, we can't even indicate if somebody's male
(26:50):
or female anymore without getting into hot water,right? And maybe that's not legal hot water,
that might just be social hot water. But regardless,now you've got the cities telling you, okay,
you've got unrelated parties living in a houseand they can't be considered a family. what
gives them that right? And we all know there'son the federal level, they can't get out of
(27:12):
their own way to provide, you know, affordablehousing. So in the private sector, we're, we
are able to, and this is me probably gettingon my soap box, but small business owners,
small business owners are, have been the problemsolvers in this country for the entire existence
of the United States. If the bureaucracies getthe hell out of our way. And we can solve the
(27:38):
housing problem really quite quickly if theyget rid of the red tape, right? Super fast.
Yeah. There's enough square footage in the UnitedStates for everyone to have a thousand square
foot to themselves. Right, but for some reason,the cities now have God-like powers to define
(28:01):
what a family is, you know? And so it doesn't...It really doesn't sit well with me. It doesn't
sit well with anyone in the industry. We'recontinuing to work around the problem, but
we're deploying units that are 40% cheaper thana studio. You want to solve affordable housing,
homelessness? We are literally rolling out thesolution and we're fighting every inch of the
(28:25):
way to get it to be done. So I think that'sone of the parts about working with bungalow
or an eco-living operator that I think is Kindof a win-win, right? Where better rents, but
like a behind the scenes, you're also providingone of the most needed things in the United
States, which is affordable housing. So youcan feel good about it, but also make more
(28:46):
money, which is a great combination. Absolutely.So what's your vision for yourself? What's
next for Johnny? I mean, I know you're workingwith bungalow, but what do you see coming in
your future? Yeah, so I joined bungalow as theirhead of co-living. As you can tell that- This
is my passion. I love this model of housing.I've loved it when I lived in it for 10 years.
(29:13):
So I'd like, you know, my goal is to continueto chip away at this problem, right? To help
investors make more money by buying co-livinghouses, to make their experience owning the
house is really seamless, but also provide aton of affordable housing units everywhere,
right? We need them in the coast, we need them.We need them in the Midwest, we need them everywhere.
(29:35):
Everywhere we've been, and we've been everywhereas a company. There's been a lot of demand,
and a lot of people that are very excited thatthey can actually afford to live with people
that they enjoy living with, and not have togo through Craigslist or something a bit dicey,
(29:56):
and owners are happy that they don't have tothink about the 50% more rent they get. So
that's really my goal is to drive this untilthere's enough for everyone throughout the
entire country. And ideally the next step wouldbe going global with the product. So are you
involved already or have the intentions of beinginvolved in like selling turnkey, co-living
(30:21):
properties that are already set up or is itmore along the lines of helping a property
owner like myself convert a property to a co-livingsetup? Yeah, so we are we're kind of right
in the middle of those two. We call it turnkey,but it's not turnkey in the traditional turnkey
approach, right? Where the turnkey approachthat you mentioned is like it's done. It has
(30:44):
tenets. You just jump in. We do kind of likea. We'll help you find the house on the MLS
or off market to buy, then we'll manage theconstruction with you, so then it'll be set
up. But you're going to be kind of the one helpingwith that process. So a little bit in the middle.
Um, not truly turnkey, but we, we find thatpeople in this space are looking to, they have
(31:08):
a specific needs, specific wants, and we wantto match that house to what that is and that
usually we open up all the properties that areavailable for sale to do that. So if I were
going to do something like this in, in Wisconsin,and I just didn't know what my market could
bear, you know, is, is there really a marketfor tenants? Um, what would that rent look
(31:30):
like? then I have my projected income so I cango buy a property, I know what I can spend
on that property. All of those steps for a brandnew person contacting you, is that something
you help with? Or is that on me to go and tryand figure out what my market looks like first?
(31:55):
Yeah, that is on us, right? We have that.
we'll do kind of everything there. You know,just like short-term rentals, Colivine as an
emerging space has some wiggle on it, whereaslike everyone knows the exact single-family
(32:18):
rental rent price, within like 5%, I could probablyfind a property in Wisconsin to be relatively
accurate with a few number of different toolsvery quickly. Colivine has bespoke data sets
that are owned by like Bundle-O or other playersin the space, and then we're doing data science
on it that's fairly advanced to get that information.So we're helping with that. We're helping with
(32:44):
you pick the price. We'll do a full pro formashowing you like with our expected occupancy
and price, there's not much you're gonna haveto invest to build out the rooms if you'd like
to do that. And here's what your returns willlook like. So we'll help build that out. We'll
help you look at, we'll help you shop. We provideoptions and in every market. that we're currently
operating to investors. So markets you currentlyoperating in, you said you're in a lot of different
(33:12):
markets. Are you staying in major metropolitanareas specifically, or what's your market levels
look like? Yeah, so to date we are deployingmore units in the metros that we Bundle currently
operates on. And so there's about 12. In termsof properties that are outside of those metros,
(33:37):
we have a long-term plan for a bungalow anywherewhere we'll allow our platform to be used anywhere.
That's not currently live and it'll be donein the future. So it's something that is coming,
but the timing on that is still kind of a fewyears out. And so I can't be exactly firm.
I could Elon Musk it and say it's like 2026,but not exactly sure to be honest. Well, I
(34:01):
was going to say you, you feel like the nextElon Musk. So, yeah, I mean, you can, yeah,
that's, yeah, that, that's, uh, that's true.I'm just kidding. That's a, that's a wildly
generous compliment. So thank you. Absolutely.Or I'm just a smart ass. You decide. Or either
way. I'll, I'll just, I'll take the complimentas, as you should, as you should. Yeah. Well,
(34:26):
Johnny, what's, what's one question I shouldbe asking you that I'm, I'm not. And it doesn't
have to necessarily be about cool living. Itcould be about anything. Sure, I think the
question is sort of, is this the right timeto be buying single family rentals at all,
I think is an interesting question that we geta lot because interest rates just went up again
(34:48):
a little bit. I think we like to see the silverlining in where rates are today as a situation
in which there's way less competition. And likein January, in January with high interest rates,
there's even less competition. So I personally,in my investment approach, I like to, I love
(35:11):
to buy between Christmas and New Year's, that'ssort of, because usually someone's trying to
get rid of their home before the end of theyear for tax reasons, otherwise they wouldn't
have listed in November. So I generally tryto see kind of that opportunity, right? I think
we um We have discounted rates in the firstcouple years to operate. And then kind of in
(35:33):
year three, the rates go up a bit for our operations.So we generally try to, so that would be the
question. So I think it's a good time to buyif you can find the right model that will deliver
some cash flow stability while you wait forthe refinance that we believe will be out there,
(35:54):
maybe 24, 36 months. We don't really know thetiming. you can hold without losing cash, then
it's a really good time to get into properties,especially if you're leveraging timing advantages,
especially if you're leveraging demand advantages.And so that would be my one answer to the one
(36:16):
question. Well, in my world, which is creativedeal structuring, I love the model because
I can go and buy somebody's property eitheron really good favorable seller finance terms,
or subject to their existing really good financingand not have to worry about waiting for rates
to come down. As we're recording this, I havea property under contract, we'll close in a
(36:41):
couple of weeks and the seller's taking paymentsat 0% for eight years. And there's other terms
that are included in that. He's getting hisfull asking price, which nobody else was willing
to give him. but the terms for us allow us tocashflow just as a regular rental. So if we
(37:04):
turn that into a scenario like this, it wouldprobably 3X. So yeah, you combine your strategy
with some of my strategies and you can havethe best of both worlds. Yeah, man, let's do
it. Yeah. I'll also know over the contract.Yeah, subject to is not a bad time for that
(37:25):
approach, right? Absolutely. Absolutely. Well,as we kind of wind down here, Johnny, I do
have a link that people can go to at theg slashhomeroom, but that'll get them connected with
you so that if they want to work with you, butwhat does that look like? What do you offer?
(37:45):
How can you help just people in general, mylisteners, anyone else? Yeah, so you Follow
that link, it'll help you set up a time withour investments team. Really proud of those
guys. A lot of them are investors themselvesor have sold a lot of investment focused real
(38:06):
estate. So tend to think of them as very knowledgeableand helpful. So worth it to book just to learn,
I think. And they'll help you kind of startthe process. They'll help you look at what
co-living is. They'll help you think about whatthe out-of-pocket cost and the long-term. results.
(38:27):
And so we're offering anyone that kind of mentionsthis podcast $2,000 in construction credit.
A lot of times these homes, people will modifythem or do construction after the purchase
and we'll go out and offer that for folks. Andyeah, I think it highly recommend folks set
up a call with Sean or Umberto or any membersof their team and we would love to talk to
(38:50):
you.
Perfect. And again, that, that link is thegslash homeroom. And we'll have it in the show
notes. We'll have it really easy to connect.And if for any reason there's ever a challenge
with that link, don't hesitate anybody listeningto this, just to reach out to us, the team
at the gene we can always get you connected.We have had, you know, a couple people in the
(39:14):
past that, Hey, a link didn't work here or there.We're always there to make that connection.
So Johnny, I really appreciate your time. Anythingthat we can all do collectively to overrun
the government overreach and help with the housingcrisis, I'm for 100%. All right, welcome to
(39:38):
the crew, man. Absolutely. I'm not anti-government,I just don't want them touching my shit.
Absolutely. Well, again, appreciate you beinghere. And for- Thanks for having me, man. It's
been fantastic. Absolutely, absolutely. Foreveryone else listening, we appreciate you
(40:00):
following the Generations Wealth podcast. Goout there and help us spread our message. Give
us the reviews and the shares and everythingthat we all know we all need. And until the
next show, have a great day, go out and liveyour vision and love your life. See ya.
My goal is to continue to chip away at thisproblem, right? To help investors make more
money by buying co-living houses, to make theirexperience owning the house is really seamless,
but also provide a ton of affordable housingunits everywhere.
(00:29):
Welcome to Generations of Wealth podcast. Iam your host, Derek Dombeck. And today we are
tackling the problem of affordable housing andhome living. Oftentimes we all look at possibility
of maybe the government is going to supply the,you know, the shortage of housing. And we all
(00:50):
know that's not gonna happen. So today I'vegot Johnny Wolf with us and Johnny, he founded
Homeroom. which has just recently sold the bungalow,but it's a platform for co-living and sharing
space. So awesome, awesome episode. Before Ibring Johnny on, again, thank you so much for
(01:12):
following Generations of Wealth podcast, helpus expand, spread the news any way that you
can. We really, truly appreciate it. Jump ontoour Facebook group, Generations of Wealth Facebook
group. anywhere you see us on social media,share it, like it. These are all the things
that we all know we need to help each other.So with that, let's get onto our show and here
(01:39):
comes Johnny Wolf. Well, Johnny Wolf, thankyou for being a part of the Generations of
Wealth podcast. Appreciate your time. Why don'tyou tell my listeners a little bit about yourself?
Hi, I'm Johnny Wolf. I'm the CEO and founderof Homeroom Co-Living. And we recently were
actually acquired by bungalow, which is thelargest player in the colving space. So I'm
(02:03):
helping them basically help investors buy andrent out colving homes. A little bit about
my kind of background. I started my career inthe Silicon Valley in finance and started to
do real estate investing shortly out of college.And found that I was making a lot more money
from investing remotely. and real estate thanI was from my day job. So I moved to Austin
(02:26):
in 2015 to invest in homes relatively full-time.I rented out each of my homes by the room and
in Austin at that time, there was a lot of demandfor that. And so it went really well. What
didn't go super well is managing roommate houses,which kind of was a bit of a mini nightmare
(02:47):
every once in a while and generally not thatbad. So I started Homeroom. which is one of
the, until we sold, was one of the larger co-livingcompanies in the country that ran roommate
houses and helped investors find homes remotelyas investments and rent out each room separately.
So we did that from 2018 to 2024, and we soldthe bungalow just now, and now we're kind of
(03:12):
taking the next step with them to help investorsbuy co-living homes as assets. So that's kind
of, that's a bit about me. Well, there is awhole lot to pick apart there for sure. I'll
give you a little bit my background with theco-living side. I did the same thing with a,
(03:35):
used to be a group home and then we turned itinto a 12 bedroom, six bath property and again,
leased it out per bedroom usually on a nightlyor weekly basis. So I am familiar with the
management side of that. and the joys of managementthat can come from that. But I guess before
(03:57):
that, how did you decide what was your startin real estate and then how did you get into
the co-living scenario? Yeah, I connected througha family friend to someone that was running
a property management company out of the PermianBasin in Texas. Midland basically, Friday Night
(04:24):
Lights is based out of. It was in 2008 and youcould do 10% down investment loans at that
time, which was sweet. So I bought a new propertyfor like $96,000. dollars and you know, it
went really well. So I started to do that again.I bought one with myself directed IRA and a
(04:45):
few and did a few other real estate investments.So that was really what got me started in real
estate investing. And, you know, it was, youknow, definitely had a few negative moments
where we had like a heavy turn, someone leftand was $10,000, which I think is a good experience
for any early investor to have. So you can kindof be ready for that. the inevitable downside
(05:08):
of real estate, but the upside was really good.When I sold that property, I made $100,000.
In my 20s, that was a ton. So it was reallyexciting. You're telling me you couldn't just
buy houses in California for $98,000 with 10%down? Yeah, I spent a good amount of time looking
and now I couldn't find anything really. Sogood, great question. I'm shocked. Yeah, yeah.
(05:31):
So with the co-living side of things though,I mean, you know, Obviously, affordable housing
is an issue all over the country. What is theadvantages of doing that? And then how do you
how do you set up a building for that? Yeah,the advantages, you know, there's a number
(05:52):
of them. One is that we're trying to get 50%more rent from the same house, right? So we,
when people come talk to us, we show an exampleof a property that one of our investors bought
and it was renting when they bought it for $2,000a month. And then by the time we had finished
setting up and renting out by the room, it wasrenting for $3,000 a month. So obviously that's
(06:14):
a compelling math equation. Right, 50% morerent and investors like more rent, at least
the ones I know. So, you know, that's the bigkind of reason that it's appealing is that
you can drive the revenue higher. It is a morecomplicated management approach. So, you know,
(06:34):
fees will be a little bit higher, there'll bea little bit more headache, but the good thing
about a company like a homeroom or bungalowis we do everything, right? So we have a lot
of expertise in doing that. I definitely knowa ton of people that did house hacking slash
roommate rentals by themselves. And I've doneit a ton myself as well. So that's an option
too. And, you know, I'm always, uh, I wouldget emails every once in a while about people
(06:56):
who are renting out by the room themselves andfor tips and tricks. And we're happy to share
those because it feels like, uh, you know, it'sreally helpful in today's affordable housing
to help itself. Did you run into a lot of challengeswith different municipalities? Um, as far as
(07:16):
short-term rentals or non-related parties livingin a property together, ordinances, how do
you get around that assuming you did have thatchallenge? Yeah, that's a great question. The
short-term rental is not a challenge for Homeroomor for bungalow. We generally, the minimum
(07:37):
lease is three months. Most jurisdictions don'tconsider anything over three months short-term.
Some consider anything short term and then we'lladapt to that. So we're really long-term rentals
at its core.
There are options out there that will do shorterterm and you mentioned you do weekly, which
(08:00):
are daily. Wow, that's a lot. Let me clarify,I did. Okay. I don't anymore. Okay, yeah, that
sounds challenging. Just say the least. Youknow, when you have single family rentals,
not as many variables, you add shorter term,you add more variables, you add multi-people,
(08:23):
more variables. So I think doing short-termrentals or multi-people rentals, I would do
either or, but together, it's going to be aninteresting experience for sure. Yeah, so and
then in terms of encountering with municipalities,like We are aware of city restrictions. That's
(08:44):
something that we do. We sort of, we think of,you know, returns and risks. They're both along
a spectrum, right? Short term, you know, wethink of single family rentals. Returns are
the, maybe the lowest. The rent's gonna be thelowest, right? Co-living is gonna be in the
(09:04):
middle and then, and at the top end is gonnabe a short-term rental. And then we think in
terms of compliance or city risk, short-termrentals will have zero risk. Typically, there's
some fringe, but not much. Colonial will havesome risk and short-term rentals will have
a lot of risk. So just like anything in investmentsin the world, the more risk you take on, the
(09:26):
more returns you can possibly get. So we havea protocol in place for, how we address that
with our investors. We say, hey, are you interestedin pushing the limits of occupancy that the
city has? Right, we have, there's one operatorin the space who does that with nearly all
their properties. And they have a process fordealing with cities to mitigate the issues
(09:48):
when they come up. There's other operators inthe space that just fully comply with the city's
operation policies. And you can kind of do eitheror. The reason we think of this as a much lower
risk than something like short-term rentalsis short-term rentals can get turned off like
a light switch. Like in San Diego, they wentfrom you can have short term rental as many
as you want to you can have one if you liveon site, massive change, right? And there's,
(10:13):
so it was co-living and roommate rentals, they're,you know, it's more they'll turn you down,
they'll dial it back versus like turn it off.So that's what we'd like about it in terms
of risk mitigation. So yes, definitely an issue,definitely an issue that the industry faces.
But when handled well, we think it makes sense,the risk profile makes sense for the additional
(10:37):
returns you get. So in terms of the propertyitself, you've got a single family home and
maybe a three bedroom, two bath house. Are youjust utilizing the existing layout or like
in my case, I took all the common areas, livingrooms, formal dining room, all that stuff,
(10:57):
I turn it into bedrooms, you know, put up partitionwalls, things like that. What What does your
model look like? Yeah, we were open to, I wouldsay typically we're more in the customize the
space model. Right? We, you know, one of thethings that bungalow has is they'll get more
(11:20):
rent than a typical roommate rental companybecause they have better technology and kind
of a better experience, right? So there's somepremium to it. So we can get away with fewer
bedrooms than other operators and still do reallywell financially. I think the challenge, you
know, when you have extra space and you canturn it into bedrooms, it's a lot of money,
(11:41):
right, this big margin, the cost to create abedroom is not terribly high. So it can, the
more bedrooms you add, the more of the riskprofile pushes up the investment, but also
the higher the yield and performance goes potentially.So we will do both, but we'll kind of share,
work with the investor, what's your risk profile,how much do you want to invest upfront. there
(12:04):
is risk here with the city. How do you wantto manage that? And how do you want to think
about it? And so that's really sort of our approach.We'll kind of go super conservative with less
or we'll go more aggressive with more. And it'skind of up to the investor to choose their
own adventure there. Well, an adventure is probablya great word for it because on the surface
(12:27):
you're like, well, great. I can add an extrabedroom or two bedrooms. Now you've just added
an additional one or two or three tenants, whichadds another one or two, three, um, different
challenges when it comes to personalities andpeople getting along and things. What, what's
your experience been with, um, the social aspectof it? Yeah, no, that's where we really thrive,
(12:55):
right? Because we've, you know, between the,between a bungalow and homeroom, we've housed
10,000 roommate tenants. And so we've built,you know, we've used the investment from Metro
Capital to build a really beautiful meet andgreet system where the roommates and tenants
meet each other before the move in. All themove in process is heavily automated by technology.
(13:17):
And then we have built out really robust tenantsupport teams to support those issues, right?
We've seen every type of roommate interaction.Oh, actually that is, I'm gonna knock on wood.
We've seen a lot of roommate interactions. I'msure that we'll see new ones and it'll make,
(13:38):
you know, it'll get an email on the weekendand it'll be even crazier than possible. But
generally, you know, it's about managing complexity,right, every business is about managing complexity.
And this is something that we've gotten extremelygood at managing the complexities of co-living
and roommate interactions. So it's not reallysomething an owner has to worry about. We very,
(13:59):
I can. I cannot think the last time we've hadto get an owner involved in roommate issues.
But we, as we handle it. Yep. Um, any dead bodiesyou've had to deal with Johnny? Are you talking
about metaphorically or realistically? No, realisticallytenants. Oh yeah. Yeah, I mean, I think every
landlord has, so yeah. It was, yeah, for sure.I always ask that question because a lot of,
(14:24):
and I'm in Wisconsin and the upper Midwest,a lot of mom and pop investors, so they don't
have a lot of properties maybe, but in our groupsetting, we did have one that passed away and
what I found interesting, out of 12 units or12 bedrooms in that property, about half didn't
(14:46):
even know it happened. The other half didn'teven care. And it wasn't foul play. I mean,
I've had those too, but this one wasn't. Butultimately as a property owner, we can get
nervous about, is this gonna negatively putsome kind of hex on our property? Meaning nobody's
(15:07):
gonna wanna live there ever again. And... Itcrossed our minds for sure, but you know, it's
amazing what you get used to in this businessand you deal with it and you move on.
Yeah, well said. Well said. It's amazing whatyou get used to in this business. Indeed. You
(15:29):
kept saying we. So when you established andstarted to build Homeroom, I mean, I'm just
assuming that this came with a lot of tech,a lot of, you know, software and other things
below or, you know, other things that you haveto deal with. What, how did you even get, past
(15:51):
the idea of I wanna do this and take those firststeps. And who was it with? Did you have partners
or is this all you? No, I started Homeroom asmy, yeah, I started Homeroom myself, but I
did bring in team members over time and differentteams at different phases of the business.
(16:15):
And as we sold a month ago, we had 47 team members.So, and a lot of those got to join bungalow.
So it's definitely been, anytime you're gonnascale to you know, a thousand plus roommate
tenants, you're gonna have to bring a wheelon because it's operationally complicated and
you know, we had investors as well. So numberof different pieces, all those pieces are really
(16:40):
necessary to build in this space, which is atsize starts to get relatively complicated if
you wanna do a good job for tenants and forinvestors. But we got very, we got there. So
I'm pretty happy about that. No, congratulations.I mean, it's... It's I know what it's like
building businesses and, uh, and then takingon staff and you just, yeah, you take a leap
(17:04):
of faith pretty much every day. You get up,right? Every day, man. Yeah, definitely. That
pressure is pressure is very real. Yeah. I thinkit, and I don't, I'm only, this is my. First
business with a team. So it definitely is adifferent animal. When you start to have the
(17:27):
team interaction cross, you know, when you'reremote, you're across multiple states, all
these different pieces add little layers ofcomplexity and definitely ratchets up the pressure
just a little bit. Yeah, for sure, for sure.Did you have a lot of your team overseas or
was it all in states? Yeah, you know. Co-living,single-family rental, short-term rental, all
(17:55):
these are operationally property managementheavy businesses. A lot of them are fueled
by tech innovation that makes it even more efficient.But yeah, a lot of the team is necessitating
to be overseas, right? To drive down costs becauseyou're trying to optimize the equation for
investors, while optimize the equation for thebusiness. And our overseas team was invaluable.
(18:16):
Some of them are spectacular team members. Sowe're really happy to be fully global. We became
fully remote in 2019 before COVID and it wasreally helpful. And I think it gave us the
ability to kind of grow really quickly withnot a lot of investment or capital. So it's
(18:39):
not easy though. There's definitely little challengesto overseas team members. There's time zones,
there's native English fluency. isn't there,even though they're excellent at it for a second
or third language, but it definitely, it savesyou a lot of cash. It adds a lot of horsepower
and it adds a lot of complexity. Well, a hundredpercent. And as my team, who is partially overseas,
(19:05):
is, you know, working on this podcast episodeand puts it out, I appreciate you, but it's,
you know, no, it, it honestly, Um, if I wentback 20 years or 21 years ago, when I started
in his business, trying to even comprehend whatwould it be like to have people all over the
(19:26):
world working with me and for me on my behalf?I think it would have been impossible even
fathom. And now it's impossible even fathomdoing it without them or, or people like them.
Um, it's definitely a global business now andit's, and I love it. I think it's, it's great.
(19:46):
And the same thing with co-living. Co-livingisn't brand new, right? That's been around
for thousands and thousands of years, but withinnovation, it can be so much better and smoother,
which I guess leads me to the next questionis, what do you see for the future of co-living?
(20:08):
Yeah, I think one of our investors, venturecapital investors, his belief is that coven
is inevitability, right? Is that some versionof technology colliding with real estate investing,
colliding with housing, necessitates co-livingto be done well. And I tend to agree with that.
(20:30):
I think it's complicated and nuanced in itshousing and its community and it's all these
pieces, At in every market that exists, rentinga room is cheaper than renting out a studio,
right? This is in Thailand, people do co-livingin Thailand. You know, we've had conversation
(20:52):
where it's like, why isn't this only in SanFrancisco? Well, because it's cheaper in Thailand
too, right? And some people are looking to optimizecommunity and they're optimizing price where
they live. So there's a need and I think itcan be done better. globally. And I think the
opportunity is global. I think it's challengingand difficult because you interact with property
(21:17):
operations. But we're seeing some companiesin Europe, some companies in the United States
like bungalow and other players expanding someof the fastest clips that we're seeing in property
operations technology in the entire industry.So the need is there. It satisfies a massive
need. The question is, how do you optimize allthose equations for the value for the owner
(21:41):
and for the tenant. And then how do you getit out there as quickly as possible through
technology? So I see the opportunity is massiveand big. I think it's not a if, it's a when.
And I think the question is, is like, when willa lot of smart people who are actively working
on this problem get to the point of solvingit? It's just like, I almost see it sort of
(22:03):
like, it took forever. It felt like for youknow, everyone kept saying this is gonna work.
They had Dragon Software. RCO worked on voiceto text in the 90s. Like they had a bunch of
Stanford guys. They got nowhere, right? Andso I think this is a problem where it's like,
we could write it off that it's had its bumps,but I think it's inevitability. And the question
(22:27):
is, when does it break through? Yeah, and Ialso would say, and this is maybe, a California
conversation. And I don't get political, butI just have my own opinions and I don't necessarily,
I'm not always PC. Using California as an example,right now, as we're recording this, there's
(22:51):
fires going, there's a lot of devastation inCalifornia. And there's people talking about
the rules and regulations and all the red tapeon not only getting the fires put out, but
then rebuilding. And, you know, as you mentioned,this stuff kind of takes forever to take hold.
(23:12):
And then one day it almost feels like a lightswitch was flipped, but we all know that's
not the case. How does regulation and red tapespecifically to co-living hold back the growth?
Because I know just, just with the buildingthat I own, we have a conditional use permit
(23:34):
with the city. So we know that if they changean ordinance or they change a rule, it's not
going to affect us. But I also have lots offriends in other parts of the country, specifically
in Georgia, Atlanta markets, all the suburbsof Atlanta. There's a company down there called
PadSplit that was very popular or is very popular,I guess. And they have had some major struggles
(24:01):
recently because of... different communitiesand different neighborhoods and all that the
red tape, right? How do we get past that? Yeah,that's a big question. And I think, and I know
(24:25):
CEO of PadSplit and I and I think all the folksin Co-Living, we kind of talk, we kind of watch
each other and kind of understand. So I knowAtticus and PadSplit. I think everyone's approach
to this is a bit different. I think their approachhas been almost like the Uber approach where
(24:47):
we're going to just do the deploy it, and thenwe'll work, we'll have this, we'll ask for
forgiveness, not permission. I think that approachgenerally in these kind of situations may be
right. It's hard to know what will be the breakthrough.I think at a federal level, there's a Dodd-Frank,
(25:13):
Um, sorry, not Dodd-Frank. There is a nationalkind of, uh, Supreme court ruling that actually
kind of. Belter, sorry, that's the correct one.That sort of influences what cities are allowed
to do, but there's a kind of a groundswell currentlygoing on with regulation and we Homer was actually
in federal court right now fighting that againsta city and I know Pats was doing the same thing.
(25:39):
The reality is. for cities to arbitrarily definewhat a family is, they maintain, we think that
is, just doesn't make any sense, especiallywith the housing crisis, especially with kind
of like, when you look at, you know, how, youknow, why do cities get to do that? So I think,
(25:59):
you know, the long, the best, most completeway of it is getting kind of rid of that, the
Belter kind of, you know, Supreme Court rulingand just say, No, you can't really define what
family is, unfortunately cities, cause somepeople say a family is related or it's two
people, which we think is kind of wild. So there'sa lot of push there and there's a lot of people
(26:22):
that can't afford housing. Right? So that'sa simple solution, very quick. And especially
with fair housing laws being as they shouldbe in place, right? I mean, nobody should be
discriminated against. And yet the cities areable to discriminate just because they can
deem what a family is. Well, in this day andage, we can't even indicate if somebody's male
(26:50):
or female anymore without getting into hot water,right? And maybe that's not legal hot water,
that might just be social hot water. But regardless,now you've got the cities telling you, okay,
you've got unrelated parties living in a houseand they can't be considered a family. what
gives them that right? And we all know there'son the federal level, they can't get out of
(27:12):
their own way to provide, you know, affordablehousing. So in the private sector, we're, we
are able to, and this is me probably gettingon my soap box, but small business owners,
small business owners are, have been the problemsolvers in this country for the entire existence
of the United States. If the bureaucracies getthe hell out of our way. And we can solve the
(27:38):
housing problem really quite quickly if theyget rid of the red tape, right? Super fast.
Yeah. There's enough square footage in the UnitedStates for everyone to have a thousand square
foot to themselves. Right, but for some reason,the cities now have God-like powers to define
(28:01):
what a family is, you know? And so it doesn't...It really doesn't sit well with me. It doesn't
sit well with anyone in the industry. We'recontinuing to work around the problem, but
we're deploying units that are 40% cheaper thana studio. You want to solve affordable housing,
homelessness? We are literally rolling out thesolution and we're fighting every inch of the
(28:25):
way to get it to be done. So I think that'sone of the parts about working with bungalow
or an eco-living operator that I think is Kindof a win-win, right? Where better rents, but
like a behind the scenes, you're also providingone of the most needed things in the United
States, which is affordable housing. So youcan feel good about it, but also make more
(28:46):
money, which is a great combination. Absolutely.So what's your vision for yourself? What's
next for Johnny? I mean, I know you're workingwith bungalow, but what do you see coming in
your future? Yeah, so I joined bungalow as theirhead of co-living. As you can tell that- This
is my passion. I love this model of housing.I've loved it when I lived in it for 10 years.
(29:13):
So I'd like, you know, my goal is to continueto chip away at this problem, right? To help
investors make more money by buying co-livinghouses, to make their experience owning the
house is really seamless, but also provide aton of affordable housing units everywhere,
right? We need them in the coast, we need them.We need them in the Midwest, we need them everywhere.
(29:35):
Everywhere we've been, and we've been everywhereas a company. There's been a lot of demand,
and a lot of people that are very excited thatthey can actually afford to live with people
that they enjoy living with, and not have togo through Craigslist or something a bit dicey,
(29:56):
and owners are happy that they don't have tothink about the 50% more rent they get. So
that's really my goal is to drive this untilthere's enough for everyone throughout the
entire country. And ideally the next step wouldbe going global with the product. So are you
involved already or have the intentions of beinginvolved in like selling turnkey, co-living
(30:21):
properties that are already set up or is itmore along the lines of helping a property
owner like myself convert a property to a co-livingsetup? Yeah, so we are we're kind of right
in the middle of those two. We call it turnkey,but it's not turnkey in the traditional turnkey
approach, right? Where the turnkey approachthat you mentioned is like it's done. It has
(30:44):
tenets. You just jump in. We do kind of likea. We'll help you find the house on the MLS
or off market to buy, then we'll manage theconstruction with you, so then it'll be set
up. But you're going to be kind of the one helpingwith that process. So a little bit in the middle.
Um, not truly turnkey, but we, we find thatpeople in this space are looking to, they have
(31:08):
a specific needs, specific wants, and we wantto match that house to what that is and that
usually we open up all the properties that areavailable for sale to do that. So if I were
going to do something like this in, in Wisconsin,and I just didn't know what my market could
bear, you know, is, is there really a marketfor tenants? Um, what would that rent look
(31:30):
like? then I have my projected income so I cango buy a property, I know what I can spend
on that property. All of those steps for a brandnew person contacting you, is that something
you help with? Or is that on me to go and tryand figure out what my market looks like first?
(31:55):
Yeah, that is on us, right? We have that.
we'll do kind of everything there. You know,just like short-term rentals, Colivine as an
emerging space has some wiggle on it, whereaslike everyone knows the exact single-family
(32:18):
rental rent price, within like 5%, I could probablyfind a property in Wisconsin to be relatively
accurate with a few number of different toolsvery quickly. Colivine has bespoke data sets
that are owned by like Bundle-O or other playersin the space, and then we're doing data science
on it that's fairly advanced to get that information.So we're helping with that. We're helping with
(32:44):
you pick the price. We'll do a full pro formashowing you like with our expected occupancy
and price, there's not much you're gonna haveto invest to build out the rooms if you'd like
to do that. And here's what your returns willlook like. So we'll help build that out. We'll
help you look at, we'll help you shop. We provideoptions and in every market. that we're currently
operating to investors. So markets you currentlyoperating in, you said you're in a lot of different
(33:12):
markets. Are you staying in major metropolitanareas specifically, or what's your market levels
look like? Yeah, so to date we are deployingmore units in the metros that we Bundle currently
operates on. And so there's about 12. In termsof properties that are outside of those metros,
(33:37):
we have a long-term plan for a bungalow anywherewhere we'll allow our platform to be used anywhere.
That's not currently live and it'll be donein the future. So it's something that is coming,
but the timing on that is still kind of a fewyears out. And so I can't be exactly firm.
I could Elon Musk it and say it's like 2026,but not exactly sure to be honest. Well, I
(34:01):
was going to say you, you feel like the nextElon Musk. So, yeah, I mean, you can, yeah,
that's, yeah, that, that's, uh, that's true.I'm just kidding. That's a, that's a wildly
generous compliment. So thank you. Absolutely.Or I'm just a smart ass. You decide. Or either
way. I'll, I'll just, I'll take the complimentas, as you should, as you should. Yeah. Well,
(34:26):
Johnny, what's, what's one question I shouldbe asking you that I'm, I'm not. And it doesn't
have to necessarily be about cool living. Itcould be about anything. Sure, I think the
question is sort of, is this the right timeto be buying single family rentals at all,
I think is an interesting question that we geta lot because interest rates just went up again
(34:48):
a little bit. I think we like to see the silverlining in where rates are today as a situation
in which there's way less competition. And likein January, in January with high interest rates,
there's even less competition. So I personally,in my investment approach, I like to, I love
(35:11):
to buy between Christmas and New Year's, that'ssort of, because usually someone's trying to
get rid of their home before the end of theyear for tax reasons, otherwise they wouldn't
have listed in November. So I generally tryto see kind of that opportunity, right? I think
we um We have discounted rates in the firstcouple years to operate. And then kind of in
(35:33):
year three, the rates go up a bit for our operations.So we generally try to, so that would be the
question. So I think it's a good time to buyif you can find the right model that will deliver
some cash flow stability while you wait forthe refinance that we believe will be out there,
(35:54):
maybe 24, 36 months. We don't really know thetiming. you can hold without losing cash, then
it's a really good time to get into properties,especially if you're leveraging timing advantages,
especially if you're leveraging demand advantages.And so that would be my one answer to the one
(36:16):
question. Well, in my world, which is creativedeal structuring, I love the model because
I can go and buy somebody's property eitheron really good favorable seller finance terms,
or subject to their existing really good financingand not have to worry about waiting for rates
to come down. As we're recording this, I havea property under contract, we'll close in a
(36:41):
couple of weeks and the seller's taking paymentsat 0% for eight years. And there's other terms
that are included in that. He's getting hisfull asking price, which nobody else was willing
to give him. but the terms for us allow us tocashflow just as a regular rental. So if we
(37:04):
turn that into a scenario like this, it wouldprobably 3X. So yeah, you combine your strategy
with some of my strategies and you can havethe best of both worlds. Yeah, man, let's do
it. Yeah. I'll also know over the contract.Yeah, subject to is not a bad time for that
(37:25):
approach, right? Absolutely. Absolutely. Well,as we kind of wind down here, Johnny, I do
have a link that people can go to at theg slashhomeroom, but that'll get them connected with
you so that if they want to work with you, butwhat does that look like? What do you offer?
(37:45):
How can you help just people in general, mylisteners, anyone else? Yeah, so you Follow
that link, it'll help you set up a time withour investments team. Really proud of those
guys. A lot of them are investors themselvesor have sold a lot of investment focused real
(38:06):
estate. So tend to think of them as very knowledgeableand helpful. So worth it to book just to learn,
I think. And they'll help you kind of startthe process. They'll help you look at what
co-living is. They'll help you think about whatthe out-of-pocket cost and the long-term. results.
(38:27):
And so we're offering anyone that kind of mentionsthis podcast $2,000 in construction credit.
A lot of times these homes, people will modifythem or do construction after the purchase
and we'll go out and offer that for folks. Andyeah, I think it highly recommend folks set
up a call with Sean or Umberto or any membersof their team and we would love to talk to
(38:50):
you.
Perfect. And again, that, that link is thegslash homeroom. And we'll have it in the show
notes. We'll have it really easy to connect.And if for any reason there's ever a challenge
with that link, don't hesitate anybody listeningto this, just to reach out to us, the team
at the gene we can always get you connected.We have had, you know, a couple people in the
(39:14):
past that, Hey, a link didn't work here or there.We're always there to make that connection.
So Johnny, I really appreciate your time. Anythingthat we can all do collectively to overrun
the government overreach and help with the housingcrisis, I'm for 100%. All right, welcome to
(39:38):
the crew, man. Absolutely. I'm not anti-government,I just don't want them touching my shit.
Absolutely. Well, again, appreciate you beinghere. And for- Thanks for having me, man. It's
been fantastic. Absolutely, absolutely. Foreveryone else listening, we appreciate you
(40:00):
following the Generations Wealth podcast. Goout there and help us spread our message. Give
us the reviews and the shares and everythingthat we all know we all need. And until the
next show, have a great day, go out and liveyour vision and love your life. See ya.
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