BiggerPockets Real Estate Podcast - 560: Double Your Rental Income with Co-Living Cash Flow w/Sam Wegert

Episode Date: January 20, 2022

Co-living (coliving) may sound a bit scary at first to a landlord. You have a bunch of young professionals living under one roof. What if there is an argument over cleaning, what if there is a fight that breaks out, will my property be ripped to shreds? Let today’s guest, Sam Wegert, quell your fears—co-living and house hacking can rake in cash flow, with way less of a landlord headache. Sam is no stranger to entrepreneurship and real estate investing. He bought his own martial art studio at the age of fifteen and his first rental property at nineteen years old. Now he boasts a portfolio of over twenty-two long-term rentals, ten short-term rentals, seven martial arts studios, and one online program. Even more impressive, Sam is managing over 150 different tenants throughout his thirty-two properties. How does he do this without ripping his hair out? Well, aside from the relaxation that comes after an intense sparring match, Sam has systematized his real estate business into a cash-producing machine. He has had to build his own property management and his own policies that help keep him, and his tenants, happy. If you’re looking for your next cash cow rental investment, this could be it!  In This Episode We Cover: Starting a business and buying property at an impressively young age House hacking and why every young investor should try it Keeping the peace in a co-living house and building a bullet-proof lease  What to look for when buying co-living properties (size, bedrooms, bathrooms, etc.) The systems Sam uses to keep his rental property business running smoothly Developing discipline to take on bigger, scarier challenges (and crush them!) And So Much More! Links from the Show: BiggerPocket's The Ultimate Beginner's Guide to Real Estate Investing BiggerPockets Youtube Channel Craigslist Facebook BiggerPockets Youtube: BRRRR and Rent by the Room: Retire from Real Estate with few properties with Ron Gallagher GoBundance PadSplit Apartments.com Salesmate Zillow MLS (Multiple Listing Service) BiggerPockets Podcast 392: $12,500 per Month in ‘Pure Cash Flow’ With Todd Baldwin BiggerPockets Podcast 226: From “D-Student” to $400,000 in Annual Rental Property Cash Flow with David Osborn The Tony Robbins Podcast Craig Curelop's Instagram Craig Curelop's Tiktok David Greene's Instagram Connect with Sam: Life Door Rentals Website UpLevel Martial Arts Website Sam's Facebook Profile Sam's Instagram Sam's Coliving Course Sam's Facebook Page Check the full show notes here: https://www.biggerpockets.com/show560 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 560. I never thought I could put eight people in one house. I thought maybe five, okay, like I pushed it at six. And then this house and I was like, I'm just going to try eight. I'm going to try it. So I learned people will rent a room. You offer them a room with all utilities for $700 a month when a one-bedroom apartment's going for $1,300.

That's the play and people will do it. What's going on, everyone? It is David Green, your host of the Bigger Pocket. podcast, the starting point for your journey to financial freedom through real estate. So if you just read Richadette and you're fired up but you're not sure what to do, this is the show for you. If you're brand new here, check out our Ultimate Beginners Guide, which is a very easy read that has everything that a beginner needs to know to get started in real estate investing.

It's a totally free resource that will help you pick the right investing strategy for your goals and you can find it at BiggerPockets.com slash UBG for Ultimate Beginners Guide. this is one of the best shows that bigger pockets has ever put out. And I'm not just saying that because when you listen to it, you're going to see why. Our guest did an incredible thing as a pretty average guy. And that's no slight against Sam. He's a fifth degree black belt. He's only 30 years old.

He has seven martial arts studios. And he's got 22 properties plus 10 short-term rental. So over 30 rental properties that he's crushing it in. But his strategy is something anybody can replicate. Yeah. His strategy is just something that, I mean, what's great about the strategy is that this idea of co-living and how much you can just have increased revenue per property, think about it, right? You can make, I think we talk, we can make about $4,000 a month

on each property. But there's only one roof you got to replace still, right? There's only one furnace and one AC and all these big cap-ex expenditures, right? It's only once. So I just think, I think his strategy is good on so many levels and anybody can do it. He has figured out a way to scale it, which not many people have done. And so such an amazing episode. So basically, Sam is taking single family homes and running them as if their apartment complexes. He's renting out rooms to specific tenants and providing a common area, just like apartment complexes do, and crushing it like a karate shop. So make sure you listen all the way through today's episode, because at the end, we have a really good conversation about how, if you hear the strategy and

you know you want to do it, but you're having a hard time getting started, some specific steps that you can take to gain some confidence to get some momentum rolling for yourself. What were some of your favorite parts of the show, Craig? Oh, man. Well, First off, I just am so impressed as to how he started at such a young age. And he kind of was at the forefront of this like real estate movement. I mean, he was the courage that a 19 year old has to take to buy a property in 2010. I mean, I don't know if you remember 2010, but like no one was saying to buy real estate back then. Right.

Everyone was saying, oh, it's such a badass that to buy. But he took that and he took what he learned from martial arts, established it in his real estate business. And now he's just like crushing it, thinking differently. And I just, I love his entire story from start to finish. Me too. And for today's quick tip, I want to remind everybody that Bigger Pockets has more than just this podcast. Their YouTube channel is growing with tons of good content and some of it from yours truly. So go search YouTube for Bigger Pockets channel and find some other cool stuff and some more detailed information. We've got a couple links in the show notes today for other shows that were similar

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an investment. Craig, anything you want to say before we get to Sam's interview? No, let's bring Sam on. All right. Without further ado, let's hear from Sam. Sam Wager, welcome to the Bigger podcast podcast. How are you, bro? Doing good, David.

It's an honor to be on, man. Thank you so much for having me. I think the honor is ours and the guests are going to see why. once we dig into your story and learn a little more. Why don't we start off by having you share sort of like a brief biography of your life as far as your business, your martial arts and your real estate investing, and then we'll figure out where your portfolio is at. Heck yeah, we can start there. So born and raised in Lynchburg, Virginia, eight brothers and sisters, kind of a sheltered family homeschooled and got involved in martial arts real young. I had an opportunity when I was

15 years old to actually buy a martial arts studio. I was homeschooled. So I was able to I've read into it and my parents loaned me some money and it was like my first foray into entrepreneurship and I was hooked. I was out to prove to the world that I could be somebody. From that point on, I got involved in abundance at a pretty young age, which is my tribe, my group. And they said, hey, your martial arts business is doing great, but you got to skim some money off the top. It might not always do great, which is ironic, considering that we just went through COVID and had to shut down for seven months solid. And so, yeah, from that point on, I started, man, I bought my first condo in Charlottesville, Virginia.

It was a three-bedroom, three-bath condo right outside of University of Virginia. So it was kind of set up for college housing. And I just, I lived in one of the rooms when I started renting out rooms. And how old were you at that time? I mean, it was in 2010. So I was 11. I'm 30. So I was 19.

Okay. First property at 19. And you lived in a room and ran out the rest. You probably didn't know that was called house hacking at the time. No, not at all. I just knew I was making money to live. There you go. Okay.

Where did you get that idea from? Like, how did you, if you had never heard of Bearer Pockets, right? It was honestly just the way that this condo was set up is each room had its own master bedroom. Each room had its own bathroom. And each room had a built-in desk. And so I just, I only needed one. I didn't have a girlfriend or anything like that. So it just was a thought.

It was like, well, I don't need these rooms. They're set up for someone. Why don't I rent them out? But I don't remember ever hearing it outside of. anywhere else. I just rented it to a couple of college students that were training at UVA. Sam, you are inherently smart is what it sounds like. Discovered it before everyone else knew. It's just more like, hey, there's extra space. How do I utilize this space?

Yeah, I love it. I love it. So I guess, yeah, let's get into that first property that you bought. Like, how much it cost and how did you go through with the financing and all that good stuff? So, man, I think it's important to understand the background behind this. My parents thought that Y2K, I don't know if people remember this, but back in the year 2000, crap was supposed to hit the fan. And so my parents kind of doomsday prepped. I mean, buried silver bars in the ground, filled a basement with five gallon buckets and things.

I mean, we were doomsday preppers. So that was back in 2000. So what's that? 21 years ago now? So I was nine, 10 years old. It taught me to save. And so what I ended up doing is just taking, it was just so ingrained in my psyche that every dollar I needed to, that I made, I needed to put away.

My parents were very frugal. I lived very lean. So I became, even as a young kid, I became a big saver. And I bought silver because my dad said, silver is going to be the big thing. And so I'd buy silver and silver had gone up a little bit at the time. I ended up selling some. And I actually, believe it or not, at that age, I had saved enough to buy this property. It was a foreclosure.

I think I found it on Zillow and it was a foreclosure. And it was actually, I want to say it was listed for like $75,000. And I bought it for $67,000, a three-bedroom, three-bath. This is so cool that you, at that age, you had the guts to move forward and make these decisions. You had to be getting support from somewhere. Was it your parents? Did you have a mentor that was kind of saying, hey, this is something you should do? Yeah, man, I think it was, it's crazy.

I mean, it's a good question. It's been a while since I've thought back this far. But I would say my dad was a huge influence on me. My mom, who was supporting me on that? Really, I guess I would just say my martial arts instructors at the time. I was training in martial arts. They were having me pursue personal development. So I read the classic rich dad, poor dad, Robert Kiyosaki book.

And I think that was the spark. I could dive into that even more. But I think that was the spark behind like, okay, real estate, okay, let me not pay rent. Let me find a way to make an asset work for me. It sounds like you just, you were only focused on the positive aspects and all of the, what if this goes wrong. I mean, did that even enter into your head at that time? Do you think maybe you're just too young to know some of the risks that you were

taken you know David it's funny because in my martial arts business I have so many friends that are connected to the industry and they always they'll tell me like hey do you know this person or this happen and I'm like guys I don't pay attention to the industry like I do my thing and I move forward so I have adopted that same philosophy to a certain extent real estate and it has pros and cons but the pro is that yeah no like I don't think at that point of my life I don't really think I'd had that many people tell me like all tenants will destroy your house like they just didn't have those beliefs and it was just like I was doing what I was doing. Okay, so at this stage now, how many martial arts studios do you have and what does your portfolio

look like for real estate? So when you say this stage, you mean right now? Yeah, where we are today. Yeah, so I have 10 short-term rentals. I have 22 long-term rentals that I do co-living in, so about 150 beds in those 22 rentals. And I have seven martial arts studios and I have an online program. Wow. And my wife is my partner and all of this stuff.

She's amazing. So when we say co-living rentals, I think we all know what short-term rentals are, but what do you mean by the co-living rentals? So co-living is simply just house hacking and co-living is really just a new up-and-coming term. And it just means that you're putting three, four, five, six, seven, eight. My largest house has nine bedrooms rented to nine different people. They are sharing a common space, a common kitchen. They're sharing a common living room that I furnish. And they are renting their room.

And maybe they have a shared bath or maybe they have a private bath. That's co-living. All right. Now, Craig here wrote the book on house hacking for bigger pockets. So I'm going to let him jump in. I was just about to say, it sounds like you took like what I did and like multiply it by 10 or something. Right. So my question to you is how do you convince someone to live with eight other people?

or have a roommate, right? Do these have nine bedrooms or they're like two beds in a room? No. So we don't do multiple beds to a room. What I will do, I can answer that a couple of ways, but I'll just dive into it this way. I will buy a house that has three or four bedrooms, but I will look at the square footage of the house. So if it's 1,500 square feet, I kind of just inherently know I can fit four bedrooms in that house. I can turn a dining room or a living room into a bedroom. I can turn a little porch area into a bedroom. And I give them their private space.

I furnish the common areas. And then they furnish their own bedrooms. Craig, in terms of convincing people, you know, it's funny. I remember one guy, for my first house, I remember one guy that rented from me. And I just raised the rent. And he goes, I can pay the rent. And I just remember I'd raised it. And so I was so excited that he was going to be able to pay.

And I just let him in. But I guess what I'm trying to say is, I've never had any trouble convincing people to do this. Like, I post an ad on Craigslist. I post an ad on Facebook. And we tell them we're trying to create a great community of people. And they rent. Like, I don't have to pitch them on it. We post the ad. They respond to us. Is there any sort of theme to your house? Like, do you do like, you know, a martial arts house and a snowboarder's house or something like that? So people know they're with people of the same interests? Or how do you screen them?

I think the biggest question in people's minds when they come in, Craig, is safety? Like, hey, is this going to be a safe place? I am open. There are common spaces and I have my, so what we've done is on all the doors, they get a keypad door lock. No, we don't do themes, but the general theme is like we're trying to create community and just good people living together that can support each other in life. So our philosophy is and we will share this.

We'll say, hey, your home is the most intimate place that you're going to spend time. It's more intimate than your workplace. And so we will do our best to screen them by doing background checks, by doing an interview and by doing a showing to make sure that they just fit our values of being a solid, upstanding, safe person that's trying to do their best in life. It's positive. We'll put inspirational wall art. We'll make the common areas really warm, really inviting. We'll put desks where people can kind of co-work in the common area if they need to. I love that.

But no, like, themes. No theme. At what point in investing? You bought that first condo, you house hacked it. When did you switch into this co-living model and did it come before or after you got into short-term rentals? It came before short-term rentals for sure. I moved to Charlotte, North Carolina to buy two martial arts schools.

I was renting a room from a guy who had the main lease on an apartment. So I was sub-leasing a room from him. It was a two-bedroom apartment and I just went on Craigslist because I didn't want to sign a long-term lease. I wanted to go month by month. And I just wanted to find a room. I needed. So I just rented this room. And then there was a house that came for sale across the street. It was $131,000 in Charlotte, North Carolina. And to be totally honest, even though I had rented my first

condo as rooms, when I bought this house, I thought it'll be cool to have a house to myself, like the whole house. So I bought this house. I was getting a W-2 from my company, my martial arts company. So I went to the bank. I got a normal loan. I think I put down like three and a half or five percent. like something very small. And I bought the house. And I come from a big family. So I remember waking up one morning and being like, it's super quiet in my house. Like too quiet.

I'm used to brothers and sisters and people running around. And it was just that. I just made the decision. Like, I'm going to rent it to some people that can rent for me. Can rent a room. Wow. So do you think growing up with a family of seven brothers and sisters, I think you said, so what is that 10 total people?

That kind of like helped prime you to live in a house with this. Right? I love the whole idea of like you go to college, right? And you kind of live kind of like a slum, right? Yes. And then you like don't let that increase for as long as you can, right? Because that's really what perpetuates financial independence. That's how you achieve early financial independence.

Anyone that I know that has achieved financial dependence under 30 has done it in that way, super frugal, house hacking, all those kind of things. So I love that you did that. Yes. So it did. And I wanted to, you asked the question earlier, Craig, about how do we, convince people. This is not necessarily an official part of our pitch, but our team will say this to people. Like, look, for someone coming out of college, rent is usually their biggest expense.

And so for us to be able to reduce that or cut that in half by you just renting a room, even if it's for two, three years while college students are getting their first job and making their way in the world, we'll tell them. This is an amazing way to put more money in your pocket. You get to save more. So in terms of like, what's the pitch? What's the draw? Like, save money for a few years. We only rent to working professionals, but save money for a few years. And then we've had several of our tenants go out and buy their own house. Ironically, they end up, a lot of times they'll end up renting rooms.

I love that. And if they don't pay, right, you just give them a quick karate shop or something, right? It's an added benefit that I can be my own rent collector, yeah. You can build your own, yeah. That's right. Just show up with your black belt. Sam Trains in Kravagat, which is like the last style that you want to have to deal with somebody.

They're not going to give you some taekwondo super high-speed. That's right. It's brutal. I can do both, David. I can do the jump spin reverse crescent because that's my style I started. And then, yeah, Kravagma, I know you train a lot too. So no, not compared to you, man. I haven't been training since I was 12.

I don't even think you, I deserve to be the same stratosphere as what Sam does with martial arts. So I appreciate that. When are we going to change that? We want you to see you guys face off. Maybe at the next go abundance event. Yeah, that's true. I'll just have to like, I'll have brass knuckles or something.

I'm going to need some kind of advantage over Sam. So Sam, which markets are you currently invested in now? Charlotte, North Carolina. And then a year and a half ago, I bought one in Asheville, North Carolina, which is a mountain kind of touristy town. I wanted to try one. It did really well. So we bought another one there.

So Asheville, two homes. All the rest are in Charlotte, North Carolina. Oh, so all of it's in North Carolina. And that's because that's where you're sort of your home base is, right? So you're keeping it close? Keeping it close 100% yes sir. Has anyone ever told you that your speech cadence is very similar to Dustin Poet? No.

Go look them up on YouTube. You're going to be like, it's like listening to yourself at this point. You guys have very, very similar accents. I get excited. I go fast. If I need to slow down, just tell me. Well, he's from Louisiana. And you're not.

So I was just trying to figure out if that was a Louisiana thing or where that might have come from. So here's my big question. Obviously, this is insanely awesome that you are renting out regular homes, renting it out by the room. Talk about how it's the best use. You are crushing it when it comes to that. The first thought I think is, oh my God, how would I manage collecting rent and keeping the peace from this many people in this many different houses? Can you tell us a little about what your system is like for how you avoid the just typical like drama between roommates, making sure rents are collected? Is your wife sort of running the back in and you run the front end? Are you leveraging this

out? How do you have this set up? Yes. So first of all, there's some great questions. And I I can go into as much detail as you guys want on this particular question. There's a lot I could share, so just stop me if I'm going into too much detail. But so when I first started, it was just me managing. And then when I maybe had two or three houses, I had one of my tenants that lived in a house helping me manage. And then when I had maybe five or six houses, I brought my wife on and she did help me. She was my girlfriend at the time.

Once it got to 10 houses, 12 houses, you know, got 50 people you're working with, 50 60 people we were working with, I was, I hired my first person. So right now, we have a full property management team. We have a property manager. We have a part-time leasing person and we have a part-time maintenance. Maintenance manager. She just handles all the maintenance and makes sure everything is getting spent wisely. So you didn't go to a property manager and say, I want you to try to manage this controlled chaos that I've created. You said, I'm going to hire someone and teach them to do what we're already doing. Is that basically how it worked out? Absolutely. And I, I, had to build a lot of systems from scratch is the straight up truth. And David, I did go to a

property manager. I went to a couple of them and they all said they wouldn't touch it. I can imagine. I do know for a fact, there is a company called Pad Split and Pad Split will now manage. They are trying to be the leaders in the co-living space and they will manage your tenants now. And they even have like a 1-800 hotline that any tenants that have disputes can call. and like there's scripts that the VAs walk them through like because this is hilarious it can get granular it can be like hey Johnny ate my peanut butter that's exactly what I'm picturing like someone drank my milk their cat's hair is getting in my room they're listening to their TV too loud at night like the the level of pettiness I'm sure is probably amazing but you'd be surprised to be honest

we do a decent the vetting process is we do a background check We have a call with them. We review all the house rules with them, which are in the lease. They have to initial each of those. I can go through those in a moment. And then we do an input. My leasing agent does an in person showing. She'll show them the house.

But during that, she's really interviewing them. Hey, how do you like to spend a lot of your time? Oh, we tell them straight up. This is not a party, not a frat house. We rent to working professionals that are trying to make something of their life. And this is a great environment for that. So she's interviewing them. How do you spend your time?

Where do you like to go? She's kind of asking them some questions. And if she feels that they're not fit, boom, she just won't continue. Hey, we found someone else that's going to be a better fit. So I think the vetting process is truthfully the most important to having a good experience. But you'd be surprised at how many people would ask me like, oh, you must have fights in the house. Like, up and no. Like, it happens a lot less than you would think.

And I think that was because we asked a lot of good questions at the beginning. One thing we did that's really granular is we just took little, we took a label maker. and we just labeled the refrigerator. Like, room one, shelf one. We labeled the freezer. We went to the cabinets and we opened a cabinet. And we just freaking labeled all the cabinets. Like, room one, cabinet one.

So that way when someone moves out, you're not having to like, which pickle jar was his pickle jar? Like, you just clear out shelf one. As simple as that sounds that, like in the kitchen common space, that eliminated a lot of stuff. another rule that we implemented was just no personal items in common space. So we do pay, we work it into our numbers, we do pay for a cleaner at least once a month in all of the homes. And in some of the more dirtier homes, we do a charge back to the tenants. We just tell them like, hey, we've checked up a couple times.

We're going to charge back for twice a month or three times a month. And that cleaner, we just told them, hey, we want you to check for personal items, put it in a box. And like, there's no personal items allowed to be left in the common air. that kind of helps with people like, well, you picked up my sweater or this. Yeah. Sam, obviously, you know, it sounds like I've managed my handful of house hacks, right? And I think I capped at three.

What are like your system is above and beyond anything that I've ever done? So like, what did you do? Like, what are some of the systems that you actually use for managing the properties, for collecting the rents? Do you have a CRM that you use to manage the tenants? And yeah, like, let us dive into that a little bit. Apartments.com. It manages all the maintenance requests don't come through Apartments.

All of the rent comes through Apartments.com. We can send notices there. We can communicate directly with them about those maintenance requests through Apartments. com. And then we use something for my property manager for he'll use to send automatic emails and text and reminders and stuff. We use Salesmate.io. Salesmate.

Dot I.O. And you can schedule text and schedule certain emails of certain dates and things like that. Apartments.com will send them reminders of rent. It'll automatically add late fees, which we'll, we add a late fee on the fifth, we'll add a late fee on the 10th. And then, yeah, if we have to kick someone out, that starts on the 16th. Do you ever see a time where you maybe say, you know what, I don't want to do this part of manager anymore?

I want to use Pad Split. Would you ever switch? I spent a couple hours on this company a week other than acquisitions. I'm doing, I spend a lot of time we're doing, I do rehabs and acquisitions because I'll go to that later, but I do rehabs and that takes most of my time. But no, we've built out a great team. I wouldn't switch and pay pad split whatever they charge. I think it's 16, 17, 18%, maybe up to 20% for just that piece.

I wouldn't do that now. We've got good systems and I'm not spending a lot of time on it. Are you putting each one of these houses in its own LLC or what is your legal structure for that? Yeah, David Osborne has coached me up a lot so appreciative for him. He's one of the Goldman's elders and he told me put a million dollars worth of value in one LLC and then start another one. And for whatever reason, that just made sense to me.

And so that's what I do. What about how you're collecting the rents? Like, is it a spreadsheet that you're using to track? I'm imagining, like, how many average tenants do you have per house? Like five to six? Yeah. Some of them, nine, some of them. Yes.

That's right. All right. So let's say you've got somewhere between five and nine actual tenants in 22 houses. How are you specifically making sure you know who paid rent and when they paid? Apartments.com tracks it all. Hmm. So you can print out a spreadsheet of, of who's paid and who's not paid.

That's a super easy part of it. Is this what Cozy used to be? Because I know Apartments.com was purchased by Apartments.com. Is that what it is, basically? Yes. We used to use Cozy.com and then Apartments.com bought them. And they switched everything over. Yeah.

I can second that. Is that what you use? It's what I used. I no longer have rent by the room. I just couldn't deal with it anymore. And so, but when I was doing that, 100% Cozy was the way to go. Yeah, for sure. Apartments.com even has, like, you can set up a lease for a room.

Like, it's got the ability to set up multiple leases under one home now. Yeah. Speaking of the leases, like, do you have anything in your leases that would differ from a traditional, you know, rent-a-unit lease? What are some closets that you have that are different? Yeah, we have some house rules. And if you guys give me a moment and want them all, I can read them to you. But I'll highlight the ones that I know off the top of my head.

I mean, one is like, no personal items in the common space. quiet hours after 1030, I believe, that we assign them where they need to park, because that can be somewhat of an issue if you're in a neighborhood. So we assign them like, hey, you have to park here. We review with them, when rents due, when the late fees will kick on. So I guess most of that would be pretty standard for a lease. More than happy to share that with you guys for sure, too. Yeah, no, I think that's great.

I just think, you know, I just kind of let people know that 90, percent of that lease is probably the same. There's just a couple of clauses in there that you need to kind of cater towards the rent by the room. And like this honestly, like it sounds like a lot of work and I suspect you get paid for this extra work. So if you were to take one of your houses, right, how much do you make on your co-living space versus how much would you make as if it was just a traditional rental? Do you mind if I answer your previous question once more and just fire off? I just opened one of my leases. And so let me just, there might be a couple of other phrases in there. So we've got a section on pets, but that could be in any lease, right?

We've got a section on common areas, just basically saying, like, we're in control of that. We've got a section on kitchen use, so, like, when they have to clean up, they have to be cleaned up within a certain number of hours. We have a section on how the cleaning works. That would not be in a normal lease. We have a little section. They have to initial that basically says, like, if they have a shared bath, they have to clean the bath. Let's see, personal property. I just wanted to cover everything you went through on that.

personal property, like just them agreeing that they're going to keep it out of the common areas. We also have a guest policy. Like, they cannot have overnight guests more than five nights per month is how the lease currently reads. So that is what it is. Something else that wouldn't be in a normal lease would be parties and gatherings. I'm just kind of scrolling through here because you asked and I wanted to give an authentic answer. So parties. Really good.

Yeah, parties and gatherings. Any roommate who wishes to have a party or gathering of three or more people in the house must give the other roommate. three days notice and receive consent. Not sure if that happens all the time, but that is in the lease. Yeah. I mean, another thing that we wanted to ask is just how is all this enforced? Yeah. I mean, by the tenants telling on the other tenants is a lot of it. And your backhand or whatever. Yeah. And look, here's what I'll say about that. Because we'll have a couple situations where let's just say it's like one person's word against

another person's word. We've just told our property management team, because I don't like drama, I've just told my property management team, we have a tremendous demand for room rentals. If we get in a situation where it's just not clear, we reserved the right in these leases because it's to terminate it and give them a 30-day notice. That's really smart. Yeah, I've told my team just like, look, just pick the person that you think is in the right and terminate the other person. Like, it's not a big deal.

And we don't get, just because of the culture, we don't get the squatters that you normally would in like a single family home. Like, well, fine, I'm going to, like people don't, like, it's one, in 12 years of doing this, maybe has someone kind of not paid but stuck around? Because it's not, you're not renting the whole house. You don't really, it's just there's a little bit more social pressure of like, hey, that guy's not paying his rent. That's a great point.

It's not like you're kicking a family out of the house and people say, what am I supposed to do with my kids and my dog? These are probably, it's more like a hotel and I'm just renting it out right now. That's more of a transient mindset. That actually goes to support you quite a bit. Here's what I love about your model. There's lots of reasons. But what I love about it in particular is that in today's market,

where it is very difficult to make something work as far as cash flow goes traditionally. You got to look at creative things. And this is probably even better than a typical short-term rental because there's much less risk associated with this. You're not, you can only buy, you're not limited to areas where people want to travel. There's not a seasonal fluctuation. The floor plan of the house plays a lot more than just the amazing rehab that you did. So I'd like to break down if you don't mind.

what are the things you look for when you're actually in your acquisition stage and you're trying to find these properties that if other people wanted to replicate this in their market, they can do the same. Yeah. So just so I'm clear, the question is what I look for when I'm buying a new property, a new co-living property. Yes, absolutely. Yeah, I've gone head to head with some HOAs and they don't like it. I've lawyered up, they've lawyered up. I just, it's not really a battle. I want to fight at a big level with a lot of HOA's. So I'd look for non-H-OA properties. Okay, very good. That's a big one, right? second thing I would say would be, yeah, just as much square footage as possible.

So I kind of put together a little, yeah, like if I can get, I know I can get, I've got a house right now that has 2,500 square feet and I have eight rooms in it. And that's probably about right. If I have 2,500 square feet, depending on exactly how it's laid out, I could probably get eight rooms. So when I look for it, I'm looking for just big square foot. And I'm also looking for as many bathrooms as possible. Now, I normally add a bathroom or two to these properties.

And that's not necessary, like a lot of pads. split properties, they don't add bathrooms or as many. But for me, I like to have no more than two people sharing. So I'll do it just because it's kind of makes me more comfortable. And I feel like it's a, it's a premium product on the co-living market. But that's huge. If you got four people sharing one bathroom, you're, and you're just bound to have more problems when someone's hair is clogging up a sink or someone needs it and they can't get in there. That's very intelligent. That's correct. So I'm looking for that. Another big thing that people need to look out for if they want to how sack is parking. Amen. Is there enough parking? Is it going to bother all the neighbors

So bathrooms, parking, square footage, no HOA's. And then, yeah, a quick showing. I always walk through the homes just to kind of see how it's laid out, to see how much it's going to cost me to actually rehab it if it's going to be feasible. Yes. I mean, I think you covered everything that I was going to say. What about an outdoor living space? Is that something important for you since you probably don't have a ton of indoor living

space when you turn it into bedrooms? That's important for people to realize is that, yeah, if you're going to take a dining room and a bonus room and turn those. into bedrooms. You don't end up with a lot of common space. So we try to make it quaint and inviting and welcoming. But no, a lot of non-H-OA neighborhoods, I feel like at least in the Charlotte area, kind of have these, like they're on bigger lots or maybe a little. So, but no, it's not something I look for. Multiple entrances is like super nice. So like if there's like a basement, so obviously a built-out basement adds the square footage, that's great. If there's an entrance from the side

and a garage that someone previously converted into a bedroom, then like you've got another entrance. Like multiple interests just kind of breaks it up a little bit and makes like everybody's not coming into the same place. I got a question for you. When you're, you know, you're basically eliminating a living room. You're eliminating the dining room. Have you resold any of these houses? Like it feels like that might, you know, you might lose some value on that. Have you thought about that?

The only house I've ever sold is that first condo I bought. And I didn't do any rehab to that because it was set up like that. And as I do the tours, I think about that a little bit just to make sure I'm not doing something crazy and sane. like a lot of times it's just taking a double door entry to a dining room and closing it off. And I'm always in my back of my mind. I'm like, I can just put that double door back. Like that would not be that hard. Or I'm taking a where there's a normally, it's just a bonus room.

I'm just putting a lock on that door kind of thing. So that comes up for me a little bit. But the truth is, you're right. I haven't sold anything. Okay. And that's part of your strategy. So I want to go back to the question that I had before real quick. I'm another thing we might get into the deep dive about what is the difference between, you know,

a co-living house and a long-term rental. price-wise. In terms of, why don't I give you a specific deal? Does that help? Yeah, did you have a deal in mind that we can dive into there, get the specifics of it? Heck yeah, let's do it. So I got Denson Place is one I bought maybe six months ago. We bought it for 315.

Hold up a sec, Sam. We will ask you those. You won't have to figure out what to tell us. Got it. Throw them at you. So first question, what kind of property is Denson? Single family home. Awesome.

Craig? How did you find it? I found it on Zillow like I do most. properties on MLS. Okay. And how much did you pay for that? $315,000 with $15,000 as a credit back to me at closing. And what year was that, by the way? That was 2021. Oh, nice. Not that long ago. How did you negotiate it, especially that $15,000 credit? We found out at the last minute, well, I listened to Bigger Pockets episodes and learned how to do some of that. But I found out the last minute it was in a flood zone. And so I needed flood insurance. And,

And so I went back to them and said, I need 15K, but I don't want it off the purchase price. I want it back to me as a check. They said, okay. Awesome. And how did you fund this deal? Was it just a traditional loan? You put a down payment in? It was a traditional loan with a down payment.

Yes, investor type loan. Just 20% down or 25%? 20% down, yes, with Vizio lending, kind of a debt service loan, not a tax return loan, just what they thought the property would cash flow. Okay. Awesome. And it sounds like it was, this is a, this is a, co-living. You did this? This was co-living or short-term? It's co-living. Co-loving. Okay.

All right. And then after you bought this property, what was the outcome of it? Yeah, the outcome was that I probably put 20K into it, 15 of that, which I had back into my pocket. And I added a bathroom and added some doors and some closets. And so I ended up making 8.5.5.5. And so I ended up making eight rooms out of it, all rent from between the lowest $650, the highest $800. You know, like a master would rent for $800. So the total gross revenues on that are $5550. What's your mortgage payment on that? The mortgage payment on this one is principal taxes and insurance.

I believe it is $1725. Damn, dude, nice. Okay, so now I want to go back to my question for a third time. Hold on. Let me confirm that and make sure. This is what a good guy, Sam, is that he's not willing to be off by a dollar. His integrity means that much. Well, I was just like trying.

Yeah, so mortgage is 1392. Homeowner's insurance is 270. The reason that's high is because remember, I told you guys it was in a flood zone. So I had to like pony up on the insurance. And the taxes are 150 a month. So all of that comes to maybe more than what I just. just told you 1392 plus 270 plus 150 is 1812 that's a good year there was a war that year I think so what would that that's about all I know about 18 that wasn't a lot yeah it's not a good year was that

not even it I don't know you were the homeschooled ones so you're way smarter than I could tell you so how much okay so you get 5550 for this house now what would that same house rent for as a traditional investment single family so what's funny about this is to get the loan I got, they had to do a fair market rental appraisal. And it just barely came back enough to cover the loan. So it barely came back that it would rent for $1,8,1,12 because they were like, it was close. They were like, hey. And again, the lender doesn't care that I'm doing co-living. They're not going to look at co-living. This particular lender is just going to look at what it would rent for if I was renting it as a single family house. So when they looked at that, they

said this thing's going to do $1,820, but you just barely made it. So there you go. That's from the appraisal number. Wow. And so they don't even take 75% of that. They just said 1820 and that's it? This company just needs a one debt service of one. Wow.

Okay. So, I mean, there you have it, right? Like there is the reason why you're doing this additional work and this additional headache of having multiple tenants. I mean, you're making almost another four grand a month per property on that gross. Yeah, I mean, it's nuts. I've got a spreadsheet. I'd love to share with anybody who's listening, who wants it, and it's how I evaluate deals.

I shared it with the real estate club that I spoke at a University of North Carolina. And it just, there are other expenses that you will pay with a co-living property. I think it's important that people know that you are going to pay the sewer and water. You're going to pay the electricity. You're going to pay internet. We don't pay for any cable or anything like that. But I add in a lawn care fee. I add in a vacancy at 8%.

I add in miscellaneous repairs. I add in what the gas is going to be because that's how we heat our homes here in Charlotte during the winter. I add in a management fee, even though I do self-manage. I want the deal to make sense. So I'm adding in 10% management. And then I add in a capital improvements fee as well. So all of that being added up, I can evaluate the deal and make sure that it's 15% cash on cash or more. This one came to 20%.

So last question of the deal deep dive, what did you learn from this deal? Simple answer. I never thought I could put eight people in one house. My max, yeah, no, it's true. Like, I just did not think I could do that. I thought maybe five, okay, like I pushed it at six. And then this house and I was like, I'm just going to try eight. It's kind of big.

It's 20. Let's see, what is it actually? 2499. So it's 2,500 square feet. I'm going to try it. So I learned people will rent a room. This goes back to your original question, Craig. How do you convince people to do it?

You offer them a room with all utilities for $700 a month when a one-bedroom apartment's going for $1,300. That's how you do it. That's the play and people will do it. All right. I love it. I think this sounds a lot like somebody took traditional long-term rentals and short-term rentals and they had a baby and they ended up with what you're doing. here. It's like the perfect combination of both. You know, the question we haven't asked you that I just wanted to ask you is how important is location when it comes to this? Are you having to buy in areas

near downtown with high walkability scores or are you finding if it's just a good neighborhood, you can find a tenant? It's a great question because one of the most common questions I get is, so you rent all these to college students, right? And we rent to zero college students. We are not near colleges. We prefer not to rent to college students. We may have one or two out of the 150 tenants we have, but it's not a high percentage. And part of that is just maybe how we advertise in our ads will put out on Facebook marketplace or Craigslist or Zillow, because Zillow, you can now rent a room on Zillow list room. But we say it's for working professionals. David, I went off on a tangent. What was your original question? It was, do you have to buy in super specific neighborhoods or is it

just if it's a good safe neighborhood near employment, you can find it. Near employment. That's where I was going with that. So since it's working professionals, if there's places that people can work, then yes. But the truth is, that's everywhere. Like the person at McDonald's has to make you $15 an hour has to live somewhere. The person, everybody, all the retail stuff, they have to live somewhere. That is exactly right. If you own a short-term rental, here's something worth knowing. Not all landlord policies are built for your type of property.

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Head to costsegregation.com before April 15. All right, let's move on to the next segment of our show. It is the world famous. It's time for the fire round. These questions come directly from the Bigger Pockets forums, and we're going to fire them at you taking turns. We'll see what you got. Question number one.

This comes from Trent V. Does a property have to be zoned as a co-living in order to be able to do this? Yeah, that's a super great question. So each city does have individual zoned. and it's worth checking with your local city and regulations. In Charlotte, there's kind of a general regulation that you can have up to six unrelated people living in a home. So those are obviously covered.

Obviously, I've mentioned eight and nine. Are those covered? I'm pushing the envelope, not even probably. Yeah. Do you know, what is the penalty? Like, if they catch you with eight or nine, is it like a slap on the wrist or are you getting a fine? In 11 years, I can honestly say it's never come up.

Now, HOAs, I've had the issue with H-OAs, but never a city regulation. You know, we haven't asked you this. How do you set up the mail for that many people in one house? Great question. You buy, like on Amazon, you buy mail slots. Okay. And you just, so the rooms are numbered and then the, like I said, the cabinets are number, the refrigerator's numbers, and the mail slots are numbered. So they just, they'll put it in and then somebody will bring it in and just stick it in someone's mail slot. They self-sort it. No, it all just comes to the house. One tenant, one tenant, sorts it in a mail sorter that is inside the house. Is that right? Gotcha. I did this one time, which is a huge mistake where I put like four mailboxes on one house. And they were like, what the heck are you doing? And I was like, oh, nothing.

And that seems like the fastest way to advertise. I might be violating zoning regulations. Here's a mailbox that is obvious evidence of that fact. Okay. So you just have like a head tenant who basically kind of organizes all that. Not even a head tenant. I mean, it's just they have their mail slots. And I think people just like, they'll grab whoever gets the mail goes in and just kind of drops it.

It puts it through there. All right. Go ahead, Craig. All right. Are there any rules for a number of, you said that. You basically already answered that one. What steps of upgrades do you actually do to the property to make it more friendly to the tenants? Just furnish the commoner and add a bathroom or two if I feel that that is necessary.

And that's that's all. Just make sure it's livable. How nice are you making these bathrooms? Like are they just like functional? Plastic shower inserts, plastic shower pans, a vanity from lows, a sink from low, toilet from those. So it's definitely more functional. You're not going over the top to try to attract this tenants. Sounds like you just.

recognize there's such a demand for this that it's hard to lose, right? Like, it's better than renting an entire apartment and having to pay for utilities and when you can just rent a room and save yourself some money. The shared economy is becoming more acceptable here, for sure. Yeah. Okay. For like people sharing stuff, you know? One last question. How do you handle utilities and all that? How we've done it is not. So I know some people that like put a cap on it and then like, hey guys, if it's over this, they'll bill the tenants. To me, that just sounds like a pain in the ass. So what we've done is just, we pay everything and we charge enough that it doesn't matter.

So you don't have like a rub system or anything, you just sort of build it into the rent that you're charging. I just charge enough per room as a flat rate because that's part of going back to your original question, Craig, how do you convince people? Right. Like part of the benefit of what we do is not like, we don't say, well, it's $600 plus utilities. We're just like, it's $750. And that's it. like people like just knowing it's one expense. And so does that hurt me a little bit maybe if I have a high electric?

Yes, but like it's just simple. Yeah. You know, some months you win, some months you lose. And I can't imagine it's more than 50 to 100 bucks in either direction. And you're making $4,000 of property, right? So there's just some expenses that you don't really need to worry about. And I'd say that's one of them. That's right.

Yep. Are these all year long leases or are you month to month? How are you setting that up? Year long is what we go in with. that's what we pitch and that's what majority I'd say 85% of people sign. But then just like a normal apartment complex, you can sign a six at a premium, a six month, you can sign a three month at a premium. You can even do month by month at a premium.

And then after 12 months, are you typically raising rents by about 50 bucks? I mean, have you found that there's a consistent? That's about where it's at. 25 to 50 bucks. We will raise, the property manager will raise on the renewal. Yes. So think about that, listeners. You've got eight people and the rent's going up by 50 bucks a person.

Right? Every year, your gross revenue is going up by $400. If it's renting for $2,000 normally or $1,800, that's more than a 25% increase of what the fair market rent would be if you were doing this individually. So over four years, you're doubling what you're bringing in. This is one of the ways that, like, why short-term rentals are doing really well. Because if you're charging $200 bucks a night or $300 a night and it goes up by 10%. That's a lot when it's every single night of the month or for $2,000. thirds out of the month. This scale, it really affects things. And so I think this is some of the

ways real estate is changing is the traditional model isn't working very well when we don't have enough supply. People are just getting squeezed and now that we're looking for creative ways. And you might be one of the front runners in doing this, Mr. Wager, which doesn't surprise me because you got started when you were like seven years old. So you had a long time to figure out how to perfect this. Yeah. I have two more things I like to share. Can I just share two more things? One, I just think it's really good for listeners to also hear like even sometimes I kind of hate telling new investors that I bought that first house cash because I was just such a good saver because they're like, well, I don't have 70 grand sitting around. So like after that for the next four houses, I had just bought, I'd buy one as a primary residence and be able to put 5% down and I'd fill it up and live in it for maybe six months or even a year. And then I'd just go buy another one as a primary residence.

So the next bunch that I actually bought, I only had to put 5% down. I just had the cash and I didn't know any better. And I was like, well, I'm just going to spend it all in this house. And I didn't know anything about banks or lending at that point in my life. So I just wanted to share that. And then the second thing I wanted to share was that something that I do in my company that I'm so passionate about. And it is, I think, what sets us apart.

We created a person. I'm a big Tony Robbins guy. I love personal developments. We created a personal development manual that has things like how to save money, how to set goals. And if they can, we like give it to them and we ask them to like complete it. And as they complete it, they get rewards. We'll even give them like cash bonuses if they finish the whole book. But just as a way to like help them during this stage in their life. All right. Awesome. Okay. Let's move this on to the last segment of our show. It is the world

famous. Famous for first question. Sam, what is your favorite real estate book? Wish that poor that. It's classic. I'm sure you never get that answer on the show. But you know, I got to know. You're the first one for sure. Ah, yes. All right. Second question. What is your favorite business book? Think and grow rich.

I'm not sure people would consider that a business book, but I do. It's a mindset book and it's a multiple read for me. All right. What about some of your hobbies when you're not practicing martial arts or collecting rent checks from 700 individual tenants? Yeah, I'm a big outdoor guy. So hiking, biking, skiing, doing anything outdoors, reading anything in nature is my jam. I will do that all day and I love it.

And my wife and I enjoy all kinds of activities outside. I believe, did you take a spill on a mountain bike at the last Go Abundance event? Was that you? And David, I tore my PCL. It's still not healed. So I was actually, when I heard about it, I heard you hurt your knee. And I was like, well, I'm sure if he just banged his knee up, Sam's fine. But I really hope he didn't tear a ligament.

It turns out that that's what happened. Yeah. Sorry. Those are the worst, man. Doesn't matter how buff you are. Those ligaments just do not care. Yeah, it's so true. Yeah.

or what sets apart successful investors from those who give up, fail, or never get started? Wow. Man, I think it takes a lot of courage. And for me, it's the courage to buy that deal and just understand that if it may not work out. So for me, it was just buying a house and not knowing if it would co-live, not knowing if I could rent it by the room. And the way I got around that, I guess, was just by understanding that I could always rent it as a long-term rental.

I might not make a bunch of money doing that, but I could put a single family in it. I feel like it was my fallback. that's really what it's about right have a plan going in have a couple backup plans and then make sure that you save your money and you live beneath your means so that if worst worst worst case scenario happens you're okay yes love it all right last question of the day tell us where people can find out more about you yeah man facebook is probably the biggest way honestly just sam wegered on facebook really that's the only social media of you're using is that make me like really old or something i don't know yeah you sound like you should be about 50 you are you're like a 25 year old who with the mind

of a 50-year-old, right? And you're like this kung fu master that's been reincarnated and was homeschooled. And now you're doing all this. I bought my first house or my first business at 15. So when I bought my property at 19, that seemed kind of easy. I think that's hilarious. Lifedoor Rentals is the name of the company. So Lifedoorrentals.com people can go and kind of get a sense for like how we sell it and how we pitch it and what the benefits are. And there's some good stuff to model there if people are interested. I'm curious. One quick question. What commonalities or what did you learn from your martial arts business that you then, or even martial arts in general, that you then applied to your real estate business. Yeah, David knows this too. And martial arts is just so good for

confidence. Like, martial arts gave me something to be good at. And I wasn't good at a ton of other things. I was good at math and I was good at martial arts. And it just gave me the feeling of like, because it's not a team sport and you don't ever sit on the bench, like it's a personal development sport. And no matter what, you're going to play that day because you're going to go. to a class and you're going to try your best. Like, because it's that type of a thing, you learn. And if you have the right instructors, you're building success upon success upon success. So absolutely.

I attribute so much of my success from the confidence I gained in martial arts that I was, and I was just a shy, introverted kid that's just trying to be somebody. But that gave me that sense of like, I am somebody. I can do this, you know? That definitely translated into real estate. What's your advice for people that are not kids anymore and they're trying to figure out if martial arts is right for them. Yeah, to go try some classes. And if it feels unsafe, don't ever go back. Because of the specific instructor you're talking about. Thank you. Yes. Yes. Like if you walk into a

school and you're like, I could really get hurt doing this. The truth is, there's just some martial art schools that teach it. They teach it too intense and it's dangerous. So go to a school and just try. All martial arts schools have a free 10-day trial, a free 7-day trial, a free 30-drime. That is the offer in the industry and I've been around the industry for a long time. So just go and I want to try a couple classes. Can I do that? Yes. Just go have fun. Enjoy it. That's a really good point. I don't think I thought about that being a legit concern because I've always been involved with good ones, but that is a good point. If it's your first day and they're like, yeah, just go roll with that guy or go spar with that. You should not be sparring on your first day. It should definitely be

learning movements and fundamentals and stretching and like, definitely you shouldn't be having contact, but I think personally that a lot of the reason that people don't, what Sam is doing here, Sam, what you're doing is brilliant and simple at the same time. That's part of why it's brilliant is you have not overcomplicated it. And it will work for anybody who uses this method. There's a little bit more, I would say, work on the back end. Right? Like that's why you had to create systems and why you had to hire someone. That's the tradeoff with that it's more likely to be successful because there's a little bit more work. The people who aren't taking this action is often because they just lack an internal confidence.

They're looking for someone else to bring them something in life to be successful at. And when someone does, then they're like, yes, I can do this. But no one's bringing financial freedom to anybody else and cutting up their stake for them and handing it to them. And I feel like martial arch is a really good way to build up a foundation of confidence that maybe you didn't get as a kid, right? Especially in the right school. And that's one of the reasons that I would recommend people do that.

It doesn't have to be martial arts. I've seen people come alive from getting into CrossFit. I've seen people come alive from getting their diet under control. Like they became a vegan and all of a sudden they just recognized I have discipline and power in this area of my life. And it's infectious. It starts to spread into others. So if you're listening to this and you just feel like, I want to do it, but I don't have what

it takes. Maybe real estate isn't where you start. Maybe you start with some of the stuff like Sam's talking about and you get some momentum going. Then you apply it to real estate. Any last words on that for you? No, man. I could not.

That is brilliant. Yeah. I love that, David. I'll say one thing. The one thing that got me going with my momentum and where I felt confident was the miracle morning. I started waking up at 4.30 a.m. every single morning and doing that routine for the first three, four hours. And not only did my day start out amazingly, but the discipline to wake up at 4.30 every morning, regardless of what time I went to bed, made me feel like kind of just like a winner.

Yeah. Man, it's brilliant. Well, thank you, Sam. If somebody is in your area, actually, and wants to get into martial arts, how do they find out about your studios? Up level martial arts is the name of my company. Thanks for allowing me to say that. And yeah, we'd love to, we have an online program. We can teach anywhere in the world now.

Through COVID, we developed an online program. So no matter where you are, if you want to train martial arts online with some great live instructors. Level up your skills, level up your confidence and level up your game. I remember when you were first trying to figure out what you wanted to name. It was between up level and something else. What was the other one? Encourage martial arts or something like that. It was like All-Star karate or something like that.

You picked the right one for sure. Rex, Cuando. You could have named it after that. right all right well everybody i've known sam for several years now he never ceases to impress me just with his character his integrity the way that he lives life he's actually downplayed his success quite a bit on this podcast because he's that awesome of a guy so please i encourage you go find him on facebook you may have to download the facebook app it's still a thing that people use most of them are over 35 years old so if you're under 35 and you're listening to this you would know it as meta but

there is a version of it find sam on there and friend him get someone to get certificate that you you love in your life to go to one of his schools. Craig, any last words before we get out of here? No, I think we're good to go. Sam, it's been a pleasure to have you on and maybe I'll take one of your online classes. Heck yeah. Craig, David, thank you so much. Love you guys. All right, that was our show with the fifth degree black belt and overall pretty awesome dude, Sam Wagert. Craig, what did you think? Sam, he impresses me more than anyone that I've ever talked to. I almost see. I mean, he's what, 30 years old. He's got the mindset of a, or the wisdom of a 50-year-old. started his first business at 15, well, his first property at 19.

And he makes like insane amounts with this business. And he was able to scale that not many people are able to scale. That's one big thing I hear about house hacking and right by the room. It's not scalable. But that's, you know, he's got that rich, that poor dad mindset of the not I can't, but the how can I? Right. How can I scale this business?

He figured out a brilliant way to do it. And he makes really good money doing it. Yeah. And I think a lot of that has to do with his background, learning martial arts and the training martial arts is that you often find yourself. not flexible in certain ways or not strong in certain ways. And you either figure out a way to do it or you strengthen the areas that are weak so that you can do it.

And he really applied that to his business as he's like, all right, this is becoming problematic having this many tenants I got to manage. The property manager that I've talked to said they don't want to deal with it, I'll just make my own. He solved the problem that most people don't solve with scaling, which is learning how to hire and sort of treat your business like a business. And I love that he shared how he did that on the show. Yeah.

I mean, he shared it with us what all of the criteria. So if somebody wanted to go out and try. co-living house, go back and rewind this episode and listen to it again because he gives you everything you possibly could want for, you ask for in terms of how to analyze the deal, how do you look for a deal, what systems he uses, you know, and just try once, right? And again, make sure your property works. Yeah, so we can sum up some of what he actually looks for. So when he's looking for a property, you can set a search up, you can have a realtor.

Like, my team could set this up for someone super easy where right off the bat, we only look for something 2,500 square feet or more. he's targeting eight bedrooms if possible, but it sounds like he'll settle for six if the numbers make sense. He does want lots of bathrooms, and that's very important to acknowledge. Many house hackers neglect to pay attention to how many bathrooms are in the house. They're needed and they're expensive. Like bathrooms is sort of a art, not just a science. You can't just say, well, it's X amount of money to put in a bathroom. You got to have the space to put it. And it depends where the other plumbing is for how much money it's going to cost. If you got to run plumbing all the way from one end of a house to

others can be much more expensive than if there's a bathroom or a kitchen on the other side of that wall and you can tap right into plumbing. Sam, you know, he covered a little bit that he he does the rehabs of these properties, but that's something that a lot of rookies might not understand is where the water line exists is really big as well as is it built on a slab or is it on a raised foundation? If it's a raised foundation, you can run the plumbing underneath the house for much cheaper than if you have to actually drill into the concrete slab. He mentioned parking. I'm so glad he did. Craig, I'm sure this is something you've come across in your house hacking days. No one thinks about this when they're house hacking.

They always look for everything but that. But if you don't have anywhere for people to park their cars, you don't have a house hack. That's the problem with my primary residence in the HOA that I live in. You're not allowed to park on the street. And there's only so many spaces that you can actually park as far as the driveway. So I'm not able to house hack my primary residence as much as I would like to when I move out of it because of the parking issue. And then remember neighborhood complaints. you don't want to do this in an area where your neighbors are going to be calling you in to report

you to the city. Like there's certain neighborhoods that are just going to be more conducive to this or not. Anything you think I missed there? No, I think, I mean, I think you hit almost everything. One thing I'll add is on the bathrooms when you're looking at these houses, make sure you kind of take note as to where the location of these bathrooms are. I've got a house that, you know, kind of was not a disaster, but the master bathroom was in the basement, and that was the only bathroom in the basement. So only one person could use that

bathroom. If you've got to cut through a bedroom to get to a bathroom that's the only one on that level, you know, you may want to try to figure out a way to access that bathroom in a common area. You don't want someone walking through someone else's bedroom to get to the bathroom, and it's easy not to think about that. But other than that, I think obviously Sam's got his stuff down. David, of course, you know what you're talking about. And yeah, again, if this is interesting to you, go back and re-listen to this episode. It's a wonderful episode. I agree. This is one of the best ones we ever did and it couldn't come from a more humble guy. Really appreciate Sam. All right. If you would like more on information about this specific strategy,

check out Bigger Pocket Show 392 with Todd Baldwin, where he shares his take on the same strategy that Sam is implementing here. You can also search Bigger Pocket's YouTube for the title Retire from Real Estate with a few properties. That's done with Ron Gallagher. He does this in Washington, D.C., and we will have him on the show in the future. Both of those links will be in the show notes. But if you like what you heard, go do a little bit more research on it. Also, check out Craig Curlop's house hacking book for Bigger Pockets to get a little bit more detail. And then follow each of us on social media because we talk about this all the time. Craig, how can people follow you? Yeah, I'm the FI guy on Instagram and on TikTok. And I am David

Green 24. All right. Thank you, everybody. Go check out Bigger Pockets to YouTube. There's plenty of content there. You don't have to wait for the next podcast to drop. We got you covered. All right. Let's get out of here, Craig. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media.

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