Episode 630

Co-Living Secrets: How to 3X Your Rental Income Fast w/ Grant Shipman

Discover how to triple your rental income through co-living strategies with real estate expert Grant Shipman. Learn the secrets of transforming standard rental properties into thriving co-living communities that generate 2-3X higher returns than traditional rentals.

Grant reveals how he achieved financial freedom in just 15 months using this innovative approach to real estate investing. You'll learn:

  • How to identify the perfect properties for co-living conversions
  • The ideal bedroom-to-bathroom ratio for maximum profitability
  • Ways to properly screen and manage co-living tenants
  • Strategies to minimize management headaches while maximizing returns
  • Current market opportunities in the growing co-living sector

From turning a $2,700/month rental into a $6,300/month cash-flowing property, Grant shares his proven system for succeeding in the co-living space. Whether you're an experienced investor or just getting started, this episode breaks down everything you need to know about this emerging real estate strategy.

Perfect for investors seeking higher returns, property owners looking to maximize existing assets, or anyone interested in the future of residential real estate. Get ready to transform your real estate investing journey with these powerful co-living insights.

#housingmarket #realestaterookie #longdistanceinvesting #propertymanagement #realestate

CHAPTERS:

00:00 - Intro

00:40 - How Grant Discovered Co-Living

03:50 - What is Co-Living: Overview

06:40 - Understanding Co-Living Concepts

10:00 - Co-Living Benefits Explained

13:08 - Learn More About Co-Living

13:27 - Analyzing Co-Living Finances

18:39 - Conflict Resolution in Co-Living

23:06 - Tenant Involvement in Co-Living

25:25 - Co-Living Legislation Trends

29:14 - Free Co-Living Training Resources

31:22 - Essential Questions in Real Estate

31:58 - Myths in Real Estate Investing

32:08 - Advice for Young Real Estate Investors

32:25 - Recommended Books for Investors

32:55 - Impactful Strategies for Business Growth

33:55 - Achieving Financial Freedom in Real Estate

36:15 - Grant's Final Thoughts on Co-Living

RealDealCRM.com

RealDealCRM is your Real Estate Investing Virtual Assistant. A Real Estate Investing CRM for Real Estate Investors created by Real Estate Investors. SMS, Stealth Voicemails, Phone, Voicemail, Funnels, and AUTOMATION in a single platform! Check out more details at RealDealCRM.com

LIKE • SHARE • JOIN • REVIEW

SUPPORT THE SHOW!

"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - Jack

Transcript
Speaker:

Welcome to the REI Masterminds Network, where

Speaker:

host Jack Haas gathers amazing stories from leaders in real

Speaker:

estate investing. In each episode, our guests will tell you what

Speaker:

they're doing that works, what they've tried that failed. And best

Speaker:

of all, you'll learn actionable steps to take your real

Speaker:

estate investing to the next level. Now, here's

Speaker:

Jack with another value packed episode. Grant

Speaker:

Shipman joins me here today, and you can learn what

Speaker:

his team is up to by going to livings.com/mastermind.

Speaker:

That's gonna be a clickable link in the show notes. We're gonna be talking

Speaker:

about co living today, and, this is kind of an interesting

Speaker:

vertical in the real estate world. So thanks for joining me.

Speaker:

Well, JD, it's an honor to be here. I love talking about co

Speaker:

living. It's the newest biggest thing that, people

Speaker:

still don't know about. Right. Because once people start to hear about something

Speaker:

it's possibly in the past. And so I love it. It's my passion.

Speaker:

So thanks again for not just making a quality show, but also for bringing

Speaker:

me onto it. This is really great. So this is kind of an

Speaker:

interesting vertical. I see this in my market quite a bit because we're a big

Speaker:

college town. We see co living situations, but

Speaker:

not positioning it as an investor. Could you talk a

Speaker:

little bit about how you found your way to this particular

Speaker:

niche? Yeah, it was one of those beautiful

Speaker:

accidents as so many things are right. I got hooked on the

Speaker:

idea of financial freedom because I

Speaker:

call it my dream babe magical journey. I wanted to find my dream

Speaker:

girl and get married when I have kids, but I wanted the financial

Speaker:

freedom to enjoy them. So I started learning about real estate,

Speaker:

right? It's pretty much the easiest, surest,

Speaker:

safest way to financial freedom. And what I found when

Speaker:

I went to look at a house was that there

Speaker:

was another house on the same property.

Speaker:

And so I went to see this. I was the normal, normal Joe

Speaker:

investor. I found my financial freedom number. I thought if I work hard and make

Speaker:

$200 per door in 10 years, everything goes

Speaker:

right. I too can be financially free, you know, and that was a long

Speaker:

time, but I was committed. But when I came to this house with

Speaker:

my relitter, I was delivering dominoes out of a shitty

Speaker:

Prius. I was renting a room and the lender I called,

Speaker:

cause I was supposed to build my team, right? The lender lender laughs at

Speaker:

me. Like you can't, you gagging the house. I'm like, all right, we're just going

Speaker:

to keep going. Well, I went to this and what happened?

Speaker:

What was this like to any moment was I thought,

Speaker:

how do I lease this place out? So, I ran

Speaker:

some dummy ads to see demand. I saw I could put

Speaker:

both houses on one lease, each house on its own lease. And

Speaker:

I thought, well, how about I could also lease it out by the

Speaker:

room. And so in the next 48 hours,

Speaker:

I had gotten at least 10 times the response for the

Speaker:

rent by the room. And when I spoke with my real

Speaker:

estate mentor, he goes, Grant, everybody knows

Speaker:

rent by the room has high revenues, but by the

Speaker:

end of the month, your profits have disappeared and your management headaches

Speaker:

are way above what you want. Long term. That's why people don't do it

Speaker:

typically, unless they feel called to it. What was different for me

Speaker:

is that for 20 years, I had lived,

Speaker:

with hippies, with the intentional living community. These people who are

Speaker:

the OGs of strangers sharing the

Speaker:

house, not because they can't afford to because they want to. And

Speaker:

so, so yeah, I kind of stumbled into this thing. I got

Speaker:

financial freedom from that day when I found that surprise

Speaker:

house in the backyard. I ended up not getting that place. It's just

Speaker:

where this moment happened, the switch in my life.

Speaker:

But from that day, a little less than 15 months later, I had

Speaker:

financial freedom. 2 months after that I found my dream babe.

Speaker:

I married her and then we got pregnant on our honeymoon. It's just been

Speaker:

awesome. From an investment standpoint, you get way more for way less.

Speaker:

And from a renter standpoint, they get a whole beautiful house for the price

Speaker:

of a row. So kind of the perfect setup. It's interesting.

Speaker:

You mentioned doing these dummy ads. The last time I saw

Speaker:

that was in a Tim Ferris book, the 4 hour

Speaker:

work week. He recommends you doing these dummy ads

Speaker:

to just kind of test the market. Is that where you got that from? Or

Speaker:

is it just kind of come naturally? I'm not sure. I know I didn't get

Speaker:

it from there because I read the book after that. I wish I would have

Speaker:

stumbled upon that book earlier. So many things, but I think for me, it

Speaker:

just made sense. I didn't know. And I was very

Speaker:

responsible about it. Like somebody would message me. I would immediately message them

Speaker:

back and say, sorry, it's not available. I didn't want somebody holding their breath.

Speaker:

These are important. People are wanting to find where they can move to. But yeah,

Speaker:

I just did it and I thought, oh my gosh, everything changes now, J.

Speaker:

D. A house can make my first house that I got

Speaker:

renting it out, it would have made about $2,700 a

Speaker:

month and it makes $6,300

Speaker:

a month through Colip compared to just traditional rental. It's

Speaker:

astounding. Those are some big number

Speaker:

differences. And I mean, the the only other market that I see

Speaker:

people throwing numbers like that around is for,

Speaker:

like, Airbnbs, the short term rentals. And

Speaker:

that's dwindled quite a bit now because, I mean, the market is

Speaker:

frankly just flooded. Could you kind of break things down a little

Speaker:

bit as to how these numbers come about and

Speaker:

maybe the let's talk about your buy box a little bit

Speaker:

associated with these properties? Yeah, I think it'd be

Speaker:

good to say what co living is because

Speaker:

there is rent by the room strategies that have been around

Speaker:

forever. So, for instance, I have sober living. I have a sober living

Speaker:

house. I do not consider that a co living house.

Speaker:

There are halfway houses. There's rooming houses. That's kind of

Speaker:

housing for the poor. Other senior housing, like you mentioned, there's student

Speaker:

housing. These are all transitional housing, right?

Speaker:

People are only there for a certain amount of time

Speaker:

and usually they don't want to be there longer than they need

Speaker:

to. This takes a special kind of management,

Speaker:

extra work, all of this stuff. So, just to say my wife's in

Speaker:

Airbnb and like you said, that's a red ocean. It's oversaturated.

Speaker:

It seemed like they're trying to regulate it to death where co

Speaker:

living is something that's as far as property management

Speaker:

goes, there's no more additional work. It's a different

Speaker:

type of property management, but it's different from my wife with the

Speaker:

Airbnb. Who's paying a cleaner to come clean the hot tub. Who's

Speaker:

doing all kinds of little extras here and there. These are

Speaker:

mainstream renters who just want to live in a house

Speaker:

without signing the lease with a bunch of strangers. So just in the sense

Speaker:

of having in mind what this is, because it's definitely

Speaker:

like, could students live in co living?

Speaker:

Sure. But it's not student housing as far as how

Speaker:

I define co living. Could, could somebody who

Speaker:

is poor live in a co living house? I have plenty of people who are

Speaker:

in my houses who would be considered poor, but

Speaker:

it's different from a rooming house or a rebranded boarding

Speaker:

house. So, is, is that sometimes I'm confusing. I don't

Speaker:

explain it well enough and people have kind of an idea in their head of,

Speaker:

of of, you know, the, the house down the block with a bunch of people

Speaker:

smoking out front. Right. That's kind of like the slum nord situation

Speaker:

is JD. Is there anything you thought maybe I've been confusing on?

Speaker:

No, I think you're kind of clarifying things a little bit because when you

Speaker:

do, to be honest, when you said co living, the first thing came

Speaker:

to mind and I called that out right away is in being in a college

Speaker:

town. Typically what I see is, is co living situation with a

Speaker:

bunch of college kids, but you're actually looking at more of

Speaker:

long term residents who just simply enjoy the company of others and

Speaker:

they want to live in a house with others. Yeah.

Speaker:

And can you remember back when Airbnb,

Speaker:

like people didn't even know the name or say like Uber

Speaker:

people and people were like, were, were you one of those people that was like,

Speaker:

yeah, I'll go stay in an Airbnb or were you kind of weirded out by

Speaker:

it for a little while? No. Well, I, yeah, I kind of

Speaker:

jumped on fairly early, but then that was because I was looking for cheaper

Speaker:

ways to, to travel at the time. That was the

Speaker:

case. You would get kind of a deal. You can move, go

Speaker:

into, to an area and get an inexpensive place to stay for, for a week.

Speaker:

Now, more time, week. Now, more times than not, it's gotten a lot more

Speaker:

expensive. And you mentioned the regulations associated with it. My wife has 3 units in

Speaker:

Estes park, Colorado, which is

Speaker:

what you go through to get into Rocky Mountain National Park. And those things are

Speaker:

not cheap. I was all about it. It's a lower cost and you get a

Speaker:

fantastic place. It's, you know, the reason I ask is this trend,

Speaker:

the co living trend, it's a new thing. It actually started around

Speaker:

2,003. It really picked up steam about 2010,

Speaker:

2011, which is 1 Airbnb, Lyft,

Speaker:

Uber, all of these sharer economy got going. But

Speaker:

us individual investors, we didn't really know about it. It was

Speaker:

just something that's very grassroots and happening. Now, big

Speaker:

data that, you know, hedge fund investors, big money has

Speaker:

access to. They've been pouring 1,000,000 of dollars

Speaker:

into the co living market since 2012. That was the,

Speaker:

so $256,000,000 plus invested since 2012.

Speaker:

But they have access to data that the rest of us were just,

Speaker:

it's just starting to bubble above the surface. Even the term co living. When

Speaker:

I started my company, I called it community living homes because there

Speaker:

wasn't the term co living. We didn't know what to call it. I feel like

Speaker:

one of those things though. It's just to say it's, something, a new thing always

Speaker:

has to be kind of misunderstood. But the fun thing about this

Speaker:

phase is can people, is my wife making money on

Speaker:

Airbnb without a doubt who made the most money on

Speaker:

Airbnb, the people who got in early when it was really happening.

Speaker:

And that's, what's the thing with co living it. It's like I put a little

Speaker:

bit of work into co living and I get massive returns on

Speaker:

it. And I mean, that makes anybody feel fantastic. Not to mention the service

Speaker:

to society. Could you let's go to the buy

Speaker:

box? Like what type of property are you looking for

Speaker:

to that's ideal for this type of thing? Yeah. So, picture a

Speaker:

normal neighborhood, AB level neighborhood in, in a, in

Speaker:

a normal house in that neighborhood. It's probably going to be on the corner

Speaker:

lot, because you want to have plenty of parking. What I

Speaker:

suggest is looking at a 5 bedroom,

Speaker:

3 bath because this house typically can

Speaker:

be a 7 bedroom, 3 bath. We don't

Speaker:

go larger than 11 bedrooms. There are big

Speaker:

houses out there, some old Victorians, some fantastic, beautiful houses

Speaker:

that have plenty of bathrooms, plenty of all that stuff. When you go

Speaker:

more than 11 bedrooms, when you get to 12, there

Speaker:

starts to be 2 households, like 2 groups in the

Speaker:

house. And it's not bad. It's just a little confusing to manage.

Speaker:

At the same time, when you go lower than 7 bedrooms, this

Speaker:

might seem like a lot to people, but if you go lower than 7, it's

Speaker:

actually kind of challenging because responsible adults are

Speaker:

not home very often. They're at work, they're at the gym, they're out with

Speaker:

friends. And so, when you have less than 7 people, like I have a

Speaker:

6 bedroom and a 4 bedroom that our property management company manages,

Speaker:

Those have the toughest time because renters

Speaker:

prefer to see each other. And if you have 7 people, then usually at least

Speaker:

one other person has a schedule like yours. You know, these people

Speaker:

moved into a house because they want to see others and they just feel like

Speaker:

they live in a big empty house by themselves. So, yeah, normal house and

Speaker:

normal neighborhood, no more than 3 bedrooms per

Speaker:

one bathroom. And beside that, I bought everything

Speaker:

rent ready off the MLS with a realtor,

Speaker:

with conventional financing, or sometimes I've done VSCR,

Speaker:

but it's a really cool setup. And I would say one of the

Speaker:

coolest things is anybody who's into house

Speaker:

hacking, CoLiving puts house hacking on

Speaker:

steroids. So, I mean, holy cow. You can get I do a

Speaker:

DSCR loan. It takes me $80,000 to get the same house I could get

Speaker:

with 16 or $20,000 And then I just

Speaker:

partner with somebody and then it costs me no money. So, yeah, that's it's now

Speaker:

with buy box. Is there anything else that you think would be helpful or did

Speaker:

I cover the main points? No, I think you covered the main points

Speaker:

there. You mentioned that you're in Colorado. Is that your primary

Speaker:

market? Yeah. We're we're Colorado and in

Speaker:

Texas. And then we just got into Jacksonville, Florida as well.

Speaker:

But Colorado is where I, where I started. Okay.

Speaker:

So, and we're gonna later half of this show. I'm I'm gonna

Speaker:

put you on the spot, and we're gonna kinda go through the numbers here a

Speaker:

little bit so we can have an idea as to how how this

Speaker:

works. But before we get into it, I wanna remind everybody again,

Speaker:

you could learn more about this in detail by going to livingsmithpro.com/mastermind.

Speaker:

Livingsmithpro.com/mastermind. I'm gonna have that

Speaker:

as a clickable link in the show. If you found some value in what

Speaker:

we're talking about so far, do us a quick favor, share this with one of

Speaker:

your investor friends. And if you're watching us on

Speaker:

YouTube, give us a quick like and subscribe.

Speaker:

So, Brad, we can we can go in a number of

Speaker:

directions here. Now I'd like you to kind of run

Speaker:

through the numbers if you wouldn't mind. Like, let's

Speaker:

let's say, and, you know, I hate to give this typical, but since you're

Speaker:

in 3 different markets, I'm sure the numbers are kind of all over the place

Speaker:

on some of this, but you you're mentioning, you know,

Speaker:

$23100 rent versus I think you

Speaker:

were even in the $56100 rent in some

Speaker:

situations. Could you talk a little bit about how you price

Speaker:

these rooms and how some of these numbers kind of flush out?

Speaker:

Yeah. Yeah. And, in the room, the room rental

Speaker:

rate is very, is actually a really independent thing

Speaker:

from, normal just single family residence

Speaker:

market rate or for that matter, apartments, anything. So to say pretty

Speaker:

much any market you're in. So say Jacksonville, you

Speaker:

know, is a lower cost market where I'm going to buy that same house

Speaker:

in Denver, Colorado area. So, Jacksonville houses, I've got one

Speaker:

under contract right now for 420,000. I was to buy

Speaker:

that in the front range, Denver, Colorado, all of that area, that would cost

Speaker:

me around 750 thousand. So if I I'm going

Speaker:

to get a lot more cash flow in one than the other, but that

Speaker:

being said, room rates are going to be about the

Speaker:

same. They're always going to be between 700

Speaker:

and a $1,000 even if you're downtown Boulder

Speaker:

or Austin. But usually, they're going to

Speaker:

be 750, 800, or 850.

Speaker:

So, the easy way to know if you just look at a house

Speaker:

that, anybody listening, if you have a house for reds, or if

Speaker:

you're underwriting the house or analyzing the house to see if you want to buy

Speaker:

it, just take the number of 4 bedrooms and

Speaker:

multiply it by $750 And if

Speaker:

that amount of income because your expenses are going to be

Speaker:

virtually the same, same mortgage, more or less, same

Speaker:

utilities, same taxes, etcetera. But if that's

Speaker:

compelling enough to dig into co living, then

Speaker:

boom. A great thing to do is just to do it traditional. Right. But if

Speaker:

you get one of these houses that can crush it for you in co living,

Speaker:

I mean, we're talking 5 to 10 X, the, the

Speaker:

profits, right? Because revenue might be 2 to 3 X, but the profit

Speaker:

is. Well, one of the things

Speaker:

that's interesting me here is that in a traditional, at least in my market,

Speaker:

the traditional single family home as a rental,

Speaker:

you know, I'm talking about maybe on the high side,

Speaker:

$300 a month in net cash flow that could get

Speaker:

wiped out if the AC goes out. Or is So you're you're kind of in

Speaker:

a more of a unique situation here when you're renting by the room and and

Speaker:

the dollar amounts here are actually pretty striking. Can

Speaker:

you talk a little bit about the difference there as to what

Speaker:

do you provide as the landlord and what is on the

Speaker:

residence? Because I would have to think that there's some shared expenses or

Speaker:

something going on here. Yeah. What are great questions.

Speaker:

There's going to be about $50 of expenses a month, not at

Speaker:

max, I should say, $50 a month. So, what we do when we

Speaker:

set up a house and a house setup is very important because

Speaker:

we set up these houses. So, they mostly run themselves. The kind

Speaker:

of quality renter that is going to move in and turn that

Speaker:

home into a cherished place they love and don't want to leave.

Speaker:

That's the kind of person who really does want to run their own

Speaker:

household, right? This group of people living together, they want to make it

Speaker:

easy on. They don't want you micromanaging. They don't want somebody who's

Speaker:

running an Airbnb house that's stopping by and dropping off chocolates. It's like,

Speaker:

no, this is their house. But as far as the setup goes and

Speaker:

what works the best is all of the common areas. So,

Speaker:

everywhere besides the private bedrooms are furnished. Just

Speaker:

think with common, pretty normal stuff. I usually get used

Speaker:

furniture, used kitchen tables, that kind of stuff. It's easy to pick up. It's usually

Speaker:

closer than going to the store. And then there's going to be storage shelves that

Speaker:

get put in the garage because you don't want to have everybody have to keep

Speaker:

all their stuff in the room. And then, you know, anything that's in the

Speaker:

common areas. So for instance, toilet paper or

Speaker:

kitchen utensils, that kind of stuff is going to be

Speaker:

provided by the investor, the homeowner, or

Speaker:

the property management company. So they're going to provide those. They're

Speaker:

going to keep an eye on them, but really the house members are going

Speaker:

to take care of the stuff. They're going to clean the house. They're going to

Speaker:

use the lawnmower. They're going to do all of this stuff because that's

Speaker:

part of the joy of them getting to be in a house. When you're at

Speaker:

your house, maybe not everybody wants to mow the lawn, but 1 or 2 people

Speaker:

in the house are probably going to be fighting about mowing the lawn. And that's

Speaker:

why if you drive by one of these co living houses, the only thing,

Speaker:

ah, you would notice is it's probably the best lawn in the neighborhood. Right? Because

Speaker:

when you have 7, 8 responsible adults, that house is clean.

Speaker:

That house is a great yard and they might be the ones throwing a little

Speaker:

block party for the neighbors. Right? This is something that where neighbors either don't know

Speaker:

about it. They don't notice it, or they particularly enjoy

Speaker:

it. You mentioned that it's kind of a utopia

Speaker:

situation with these tenants, but with that many people too, you're going to run

Speaker:

into some conflict. How do you handle that?

Speaker:

And I'm sure there's going to be some complaints about so and

Speaker:

so is not holding their end up with a bargain here.

Speaker:

Yeah. I call what you just asked the $256,000,000

Speaker:

question, or I should say $226,000,000 Basically, how

Speaker:

do you get people who get along? There was back when I was managing my

Speaker:

own properties. Now I have a property management company that does it,

Speaker:

but in 2018, when I was still the one going to the

Speaker:

houses, get everything set up, there was this guy

Speaker:

who called up and he said that he regrets to inform

Speaker:

us that he lives with Satan and in

Speaker:

Satan's name is Tim. And so, right. This Tim was an,

Speaker:

another house member, right? A co renter. And,

Speaker:

this guy's name was John and he just like, you gotta get Tim out of

Speaker:

here. He's an awful guy and all of this stuff. Right. And then it wasn't

Speaker:

surprising that I also got an email a day or 2 later from

Speaker:

Tim. Tim said he also lived with the antichrist and

Speaker:

that guy's name is John. Well, that following Tuesday,

Speaker:

and this was in Longmont, Colorado for anybody familiar there, the kind

Speaker:

of the good tacos there, but they went to Taco Tuesday together, and they've been

Speaker:

going to Chalky Tuesday. As far as I know to this date,

Speaker:

they are like best buds. And do you know what

Speaker:

happened between taco Tuesday and, you

Speaker:

know, when they were messaging the property management about, you

Speaker:

know, the other being, being like Lucifer?

Speaker:

Somebody took the other person's hot sauce.

Speaker:

Well, I have no clue what happened. And this is a really important

Speaker:

thing to anybody who wants to manage co living

Speaker:

properties is that these guys,

Speaker:

just like every human everywhere, when a

Speaker:

relationship is forming, it doesn't matter how superficial, whether it's

Speaker:

a coworker, but somebody you're regularly around enough,

Speaker:

there has to be a little bit of friction. Otherwise, you will never

Speaker:

have trust or mutual appreciation. That's almost without fail.

Speaker:

And so, conflict is actually not a problem. It

Speaker:

means that good things are happening in the house. But if the

Speaker:

property manager steps in and tries to help,

Speaker:

1, they need to butt out. It's not their business. 2, it's

Speaker:

taking the property managers like time. That's

Speaker:

exhausting. But the third thing and the most important thing is

Speaker:

the property manager is robbing these guys

Speaker:

from the ability to work it out themselves when

Speaker:

conflict happens and you work it out yourself, it not only builds

Speaker:

that relationship, but like individually, you just

Speaker:

feel fantastic. You're like, I thought that was the end of the world.

Speaker:

And in regards to that circumstance, the $226,000,000

Speaker:

question is there's as far as all of this co living

Speaker:

hedge fund investing is there's been, I think, 7 companies that

Speaker:

have totaled 226,000,000 that have failed because

Speaker:

they keep trying to solve tenant conflict with software

Speaker:

or they set up this one company set up a 24 hour a day

Speaker:

hotline, where if you are in a conflict with the person you're renting

Speaker:

with, you can call them. Could you imagine getting a call at 2

Speaker:

am from strangers you've never heard of that are in a fight because they

Speaker:

rent a house together. Like, cool. Right. But, yeah, so just

Speaker:

to say the I get that I should answer real, like how do

Speaker:

I do this? It's not because I, you know, have a magic, you know, conflict

Speaker:

resolution wand. It's when I lived with the hippies for 20 years, the

Speaker:

intentional living community, the hippies, communes, co op world,

Speaker:

they have ways to resolve conflict. I adopted a thing called the 5

Speaker:

15 process. It's a 10 minute conversation that people have

Speaker:

between themselves and the household handles that the property

Speaker:

management company doesn't. So do our houses have

Speaker:

conflict in them? Well, of course you need conflict,

Speaker:

but does it, is that conflict become a problem? No, because the

Speaker:

households figure it out. And if there's a person who's not willing

Speaker:

to do their part and they kind of become a bad apple, then that

Speaker:

household will remove that person. So, Hey, it keeps the

Speaker:

household safe and the property manager doesn't have to pour their time down

Speaker:

the drain. You kind of led me into what I

Speaker:

was gonna ask you next. Were you just mentioned the household

Speaker:

can remove that individual. What type of power or

Speaker:

authority do you give the tenants to actually make

Speaker:

these type of decisions on finding their next roommate or in

Speaker:

this case, actually removing somebody who may be a consistent problem?

Speaker:

Yeah. So, well, there's this one gal, her

Speaker:

name's Lori. She's been in that. I think she moved in like 8

Speaker:

years ago. And when she moved in,

Speaker:

what did she most want to? Was it the property? Well, yeah, but she

Speaker:

wanted to see who she was going to live with. So what we have is

Speaker:

we always have a house member give the tours. This saves us time.

Speaker:

A house member met Laurie, showed her around. Laurie saw

Speaker:

the chore board hanging on the dining room wall. Okay. We all do 20 to

Speaker:

60 minutes chores a week. And Laurie's like, holy smokes. That's why this

Speaker:

place seems so clean. And then it also blew Laurie's mind because

Speaker:

the house was quiet. It was great, and there was 10 people living

Speaker:

in the house. Like, holy smokes. And so you're asking

Speaker:

about how do housemates have a do do they have a

Speaker:

a say in who moves in basically this person that gives the

Speaker:

tour, they then text back to the property manager, just

Speaker:

a thumbs up or a thumbs down. Right? So the property manager is

Speaker:

not discriminating. They're they're, they're not violating any rules. They're

Speaker:

doing the exact same thing with every person. And if this person who

Speaker:

does the tour gets a thumbs up, it says that person fits, you know, and

Speaker:

as long as they pass the background checks and just our normal best

Speaker:

practices and in screening residents, then they get offered a lease. And

Speaker:

then as far as, you know, with Lori, right? She had a great experience

Speaker:

because she had to meet somebody in the house. She saw the house. She loved

Speaker:

that there was chores. She didn't want to have to do all the cleaning. Right?

Speaker:

And so she moved in there and she now become that person who

Speaker:

gives tours. They're just a volunteer because then they, they kind

Speaker:

of, they kind of, the house trust that person to,

Speaker:

you know, to, to pick out good people. This person doesn't, they're not a manager.

Speaker:

They don't have extra responsibilities or authority, but they do have, you

Speaker:

know, they represent the house's interest. If a person would be a

Speaker:

good fit or not. You know, early on, we talked about the

Speaker:

regulations that are kind of, strangling the short term rental

Speaker:

market a bit. Do you see Thing like

Speaker:

that coming your way regarding this, or is there anything

Speaker:

that we should be aware of before we attempt this in

Speaker:

our local markets? Oh, it is. So here's, what's

Speaker:

amazing. Like the power of

Speaker:

legislation trends, which is just working terrible

Speaker:

against Airbnb. It's actually the

Speaker:

opposite in regard to co living is now there's a

Speaker:

legislation trend that is absolutely

Speaker:

protecting co living. So, for example, in Colorado,

Speaker:

before I would have said, hey, you know, make sure and we have a chat

Speaker:

GPT cheat code that you can find out how many unrelated

Speaker:

adults can be in place because when you do your due diligence, you know, this

Speaker:

is one extra step to find out, make sure you're being legal,

Speaker:

but effective July 1st this year,

Speaker:

every law that could limit co living has been

Speaker:

banned in Colorado. This has happened in Oregon and Washington and

Speaker:

Iowa and New York and California

Speaker:

cities like in Austin. Let me see. I think

Speaker:

Madison. But just to say this legislation trend is

Speaker:

so it's perfect for co living because people

Speaker:

realize, holy moly, like we have

Speaker:

housing inventory shortage and co living doesn't

Speaker:

just talk about eventually building something, eventually

Speaker:

fixing something. It immediately is a

Speaker:

solution. So, yeah, as Airbnb is getting beat over the head by

Speaker:

legislation, for us co living investors, We're just

Speaker:

riding this wave. We're like, and this kind of legislation is

Speaker:

happening in city councils and up to the state level, all over

Speaker:

the place. I can't help, but notice that a lot of the states that

Speaker:

you listed there are in obvious issues

Speaker:

around housing shortages, as well as let's

Speaker:

face fact, the economy isn't the best right now with buying a

Speaker:

house yourself or even rental prices in an apartment.

Speaker:

They're probably people are looking for cheaper

Speaker:

ways to live. Yeah. So there's 2 things I've noticed

Speaker:

with people who rent in co living. Some

Speaker:

are looking for cheaper places to live because they themselves

Speaker:

are having financial problems. And this is what's rad

Speaker:

about co living is you can provide

Speaker:

lower cost housing without

Speaker:

making it affordable housing or making it like housing for the

Speaker:

poor. We have people who this one gal actually who I mentioned, Lori,

Speaker:

nobody knew it, but us as property managers knew it. She was

Speaker:

homeless the 2 years before she lived in a car with her 2 cats.

Speaker:

And that's not because she was unskilled or irresponsible

Speaker:

person. The number one cause for homelessness is housing prices. And she

Speaker:

lives in a house where there's a civil engineer and a college

Speaker:

professor on the HVAC technician. I haven't checked up on the house

Speaker:

since then, but to say is that is the case. But the other thing that's

Speaker:

happening as well is people are realizing,

Speaker:

man, I could spend this money on housing and I could

Speaker:

afford it. They could even live by themselves and even live in a

Speaker:

nicer house, but they would rather spend money

Speaker:

on travel or not have to work as much overtime

Speaker:

or all of these things. Like basically they're choosing to spend their

Speaker:

money elsewhere. And that's a thing that I think has happened because of the

Speaker:

economy, even those of us with more money are

Speaker:

valuing things different ways. Just to remind everybody one more

Speaker:

time, head over to living smithpro.com/mastermind.

Speaker:

That's living smithpro.com/mastermind.

Speaker:

There is a lot to unravel here. In fact, you're going

Speaker:

to be putting on something on December 9th this year to help people with

Speaker:

this. Can you talk a little briefly about that? Yeah. Thanks for

Speaker:

having me do that is so co living just

Speaker:

like anything that's powerful. It can make

Speaker:

people a ton of money and provide massive service,

Speaker:

but just like with real estate, leverage is so powerful in real

Speaker:

estate, but if people don't understand it, they can really get

Speaker:

themselves in trouble. And I would say that same thing with co living. Co

Speaker:

living is not, it doesn't work with traditional property

Speaker:

management. It doesn't work with say short term or mid term property

Speaker:

management. This is a new type of thing. It is managing a

Speaker:

household of individuals. And so we're putting

Speaker:

on a a free training. It's 5 days. It's 1 hour a

Speaker:

day in the evening and me and my teaching team, we're just

Speaker:

going to bring the absolute most. We're going to show you show

Speaker:

people how to that chat CPG code, as far as like, does this work with

Speaker:

their regulations and you know, how I bought my first seven properties with

Speaker:

not a penny of my own. And, and in what systems do

Speaker:

you put in place and what furniture and how does the mail work and what

Speaker:

about overnight guests or what about cameras or watch all of

Speaker:

these questions that come up. How do you set up a house? So it really

Speaker:

runs itself and people thrive. The other cool thing in that link

Speaker:

is there's a book in there. It's normally $28 on Amazon, but you can

Speaker:

download it. Anybody who's listening to this and it's written by our

Speaker:

renters because the best thing you can do if you want to make money

Speaker:

is get to know your target market and people love this book.

Speaker:

So yeah, we've got this free buy big training and I'm always having to like,

Speaker:

people are keeping asking questions once the hour has passed. And I'm always

Speaker:

like, hi, I've got to, you know, take off to put my 2 boys to

Speaker:

bed, but it's so exciting. It's just a really fun time

Speaker:

for co living. Everybody wants it and it kind of absorbs a lot

Speaker:

of the learning curve in the beginning because there's such a high cash flow.

Speaker:

Yeah. You can learn more of that again at livingsmithpro.com/mastermind.

Speaker:

Grant, Is there a question or concept you wish we would have covered

Speaker:

before we jump into the rapid fire? Wow. I think, you

Speaker:

know, Tony Robbins says that the quality of a person's life depends on

Speaker:

the quality of the questions they ask and be great, ask great questions. So now

Speaker:

that we cover stuff a long time, but like you said, we could keep talking,

Speaker:

you know, all this stuff's fun. Yeah, this is especially interesting.

Speaker:

So I I'm probably going to have to, check out your event

Speaker:

myself to that endless a little bit more.

Speaker:

But if you're ready, we'll jump into the rapid fire questions and close out this

Speaker:

episode. I'm ready. Let's do it.

Speaker:

What lie do real estate investors sometimes tell themselves?

Speaker:

That buying a house is not worth it right

Speaker:

now. If you could go back in time and give your younger self

Speaker:

one piece of advice, what would that be? Biden, the urge

Speaker:

to say, check out real estate earlier. I think my

Speaker:

younger self, would have been

Speaker:

to chill out and chill out. It's going to work out.

Speaker:

What book would you recommend? This is my all

Speaker:

time favorite real estate book. It is called loopholes in real

Speaker:

estate by Garrett Sutton. And what I learned from him

Speaker:

just all across the board, I think has made it where for

Speaker:

me, my assets are safe and my real estate investing.

Speaker:

He really got me caught up on best practices. Yeah. And

Speaker:

Garrett was just on the show. So just go a couple episodes back and you'll

Speaker:

see him and his son, has a great conversation.

Speaker:

And then lastly, what single strategy process or tool

Speaker:

have you implemented that has had the biggest time saving impact to you

Speaker:

or your business? JD, I've gotta rise Garrett because

Speaker:

he's his Sutton Law is like my main attorney that I

Speaker:

use. And so anyway, that's really cool. I missed that episode. So that's really

Speaker:

rad. Shoot. Now I got so thrown off by that. What was the question you

Speaker:

asked again? What single strategy process or tool have you

Speaker:

implemented that has had the biggest time saving impact to you or your

Speaker:

business? So Asana or any kind of

Speaker:

project management software planning my week out ahead of time.

Speaker:

Ideally, I only work 3 days a week, 5 hours a day,

Speaker:

6 months a year. But I can actually do the things that I want

Speaker:

to. And at the end of the workday, I feel like that was

Speaker:

excellent. And if I didn't get to everything, that's fine because I have a

Speaker:

plan so I can change that plan. So anything Asana's free,

Speaker:

other things are free, but task management software for the win.

Speaker:

So one thing that I I gotta we gotta spend a couple minutes on there

Speaker:

is that you just said that you spend 5 hours a day, 3

Speaker:

days a week, and that's the financial

Speaker:

freedom that I actually think people are trying to find.

Speaker:

Could you talk a little, just spend a few minutes talking about the

Speaker:

perils and the work that it took to get to that point,

Speaker:

because I feel like there's a lot of people that run

Speaker:

ads and, make it sound like real estate is just mailbox

Speaker:

money. And it's the simplest thing in the world. But talk about

Speaker:

the heavy lifting that happened prior to that, to this point.

Speaker:

Yeah. I mean, I think the biggest heavy lifting for me

Speaker:

was really some mindset stuff. I didn't, I grew, when I grew up, my

Speaker:

parents were on boot stamps, that kind of thing, but just realizing

Speaker:

that I can do something, but then having the audacity to

Speaker:

do it. But in the beginning, when I was getting started, I

Speaker:

moved maybe 26 times in

Speaker:

2 years. And that had to do with a form of investing we do

Speaker:

called beyond house hacking with co living. But I didn't have a

Speaker:

truck. I told you, like I had the shitty Prius, so I had to get

Speaker:

furniture. So I had strapped stuff to the top of the Prius, right?

Speaker:

Like it's just making things work. But I would say the biggest

Speaker:

thing is that real estate has been done for so

Speaker:

long that it's easy to follow others

Speaker:

and putting in the work is not tough as long as

Speaker:

you're getting the results. And so, yeah, it took

Speaker:

me, what was it? So for me, it was 15 months to

Speaker:

get financial freedom. I kind of got lucky because of the whole living with hippies

Speaker:

and the living thing. But that was, I

Speaker:

mean, every hour I was on it. Right. I was a lonely single guy. I

Speaker:

was just working my guts out because at a certain point I wanted to have,

Speaker:

you know, what I have. And to emphasize, it's not just the 3 days a

Speaker:

week, 5 hours a day. That's only 6 months a year. And now it just

Speaker:

worked because I really enjoy it. And that's what, and when that

Speaker:

switches, because works great. Like if you get to do what you enjoy,

Speaker:

works great. In real estate, if whether it takes somebody 15 months or

Speaker:

10 years, that financial freedom is worth

Speaker:

whatever number of hours somebody puts into it, if that's what you

Speaker:

want. So that's my best on that. Well,

Speaker:

a great way to end this episode, Grant. I really appreciate it.

Speaker:

One last time living smithpro.com/mastermind.

Speaker:

And, really appreciate your time here. This was a great conversation. I hope you'll

Speaker:

consider coming back again sometime. I would absolutely love to be

Speaker:

invited back anytime. Thanks again for putting this quality show out here as this

Speaker:

program. If you learned at least one actionable step to

Speaker:

incorporate into your real estate investing? If so, please

Speaker:

consider returning some of that value by leaving a positive review,

Speaker:

subscribing to our YouTube channel, or joining our growing network on

Speaker:

Facebook and Twitter. You can find links to all of our social

Speaker:

media accounts in the show notes. See you next time.

Next Episode All Episodes Previous Episode

About the Podcast

Show artwork for Real Estate Investing with the REI Mastermind Network
Real Estate Investing with the REI Mastermind Network

Listen for free

About your host

Profile picture for Jack Hoss

Jack Hoss

We gather amazing stories from leaders in Real Estate Investing. In each episode, our guests will tell you what they are doing that works, what they tried that failed, and best of all you'll learn actionable steps to take your real estate investing to the next level.