Episode: Getting High Return on Investment through Co-Living Rentals with Johnny Wolff
Guest: Johnny Wolff is the CEO & Founder of tech Company, HomeRoom. HomeRoom is one of the fastest growing co-living companies in the U.S. Johnny founded HomeRoom after a career as an analyst in Silicon Valley and then relocating to Austin, TX.
Big Idea: Investors can obtain outsize returns by investing in co-living housing. Co-living is a trend where many young people prefer living with roommates for social & economic reasons. This trend exists throughout the U.S. and a new industry is arising to provide a professionally managed experienced to both residents & landlords.
Dan Breslin: Welcome to the REI Diamonds Show. I’m your host, Dan Breslin, and this is Episode 194 on getting high return on investment through co-living with Johnny Wolff.
Johnny Wolff is the CEO and founder of the tech company, HomeRoom. HomeRoom is one of the fastest-growing co-living companies in the US. Johnny founded HomeRoom after a career as an analyst in Silicon Valley and then relocating to Austin, Texas, where, in both markets, he actually lived in co-living situations.
Today’s discussion centers around how investors can obtain outsized returns by investing in co-living housing. Co-living is a trend where many young people prefer living with roommates for both social and economic reasons. This trend exists throughout the US, and a new industry is arising to provide a professionally managed experience to both the residents and the landlords. Shall we begin?
All right. Welcome to the REI Diamonds Show, Johnny Wolff. How are you doing today?
Johnny Wolff: Good, Daniel. Super happy to be here and thanks for having me.
Dan: Nice. It’s an interesting business model. So when the booking agents connected us and floated you as a potential guest, I noticed this like, renting rooms kind of a thing, and it probably would be helpful to hear the origination story. Maybe what was the background, some of your experience, even pre-real estate investing? Certainly, a business model now. And then cap it off with kind of the business model as it stands today.
Johnny: Sure. For the last few decades, I’ve lived with about fifty different roommates. I think it’s kind of ongoing growth. I still live in roommate houses. But it really started after college. I lived in Silicon Valley. I worked in finance for technology companies and startups in the bank. And when you’re in Silicon Valley, you rent rooms. You don’t buy houses because they’re all million dollars.
And so we kind of developed different ways of finding new roommates on Craigslist and betting them, and then having really cool dinner parties. And honestly, our roommate house is like the hub. Some people lived alone, but they were boring. And people that lived in roommate houses, they’re the fun ones, and they had the cool stuff going on.
So I move to Austin, Texas in 2015 to invest in real estate more actively. I have been investing in single-family homes in Texas since 2008, which was about a year after I got out of college remotely and wanted to do that up close. And so I moved to Austin, bought a number of properties there in 2015, and turn them all into roommate houses.
And it was difficult to cash flow. It’s impossible to cash flow in Austin or very difficult. We can do it with home remodel, but it was pretty hard back then, too, with a standard rental and good area. So by renting by the room, I was able to get a lot more rent, and that enabled me to buy more aggressively while I was down there.
I moved to Kansas City in 2018 to kind of do it again with a different type of property. I kind of think of Austin as a really awesome appreciation potential market, but Kansas City is really stable as it gets cash flow. So I wanted to balance my portfolio.
And then when I moved here, I had a lot more trouble finding roommates than I had in Austin and San Francisco and thought maybe it’s about time that someone figures out this whole find-a-roommate situation where it’s not through Craigslist or Facebook Marketplace, and it’s not sketchy and weird and uncomfortable.
So that’s why I started HomeRoom in 2018, and we’ve, since then, housed over four hundred roommates in Kansas City, Austin, and Dallas. And yeah, we’re pretty happy campers on the tenant side. Now, we’re partnering with investors to buy these properties in these cities and happy investors as well.
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Resources mentioned in this episode:
Johnny & I Discuss Getting High Return on Investment with Co-Living Rentals:
How to Get 20% more free cash flow than conventional rentals
Tech Stack Developed to Run HomeRoom
Risks involved in owning Co-Living Rental Property
Scaling to more than 325 Rooms in Several States
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