- 3:35: Johnny Wolf introduces Homeroom and its revolutionary concept for real estate investing.
- 5:26: Johnny shares his personal journey and how he got started in this innovative field.
- 8:58: The discussion focuses on pricing rooms based on factors like master bathrooms and room size.
- 12:37: Johnny explains the intake process for potential investors interested in the Homeroom model.
- 15:29: Learn about the common area furniture provided and the benefits of tenants furnishing their own rooms.
- 16:26: Johnny discusses the typical pitfalls for both tenants and property owners in this model.
- 18:04: Discover how to reach out to Johnny and the Homeroom team to explore this unique real estate investment opportunity.
- Website: https://livehomeroom.com/
- Email Address: johnny@livehomeroom.com
- Linkedin: https://www.linkedin.com/in/johnnywolff/
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of them, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative for you. Exit Realty’s revolutionary compensation model, training, and technology provide you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry group today at 843-619-3005. That is 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
Good morning, and welcome to another episode of Exit Strategies Radio Show. I am your host Corwyn J. Melette. Broker and owner of Realty Lowcountry Group in beautiful, North Charleston, South Carolina. If this is your first time listening to this show, you sir or ma’am are in for a treat. Because our mission here is very simple. That is to empower our community with financial literacy, and real estate education. We’re legacy building, that is what we do. So if you’re out there making things happen with your family, for the generations yet to come, and our world teaches us to leave a legacy, to leave an inheritance for our children, our children’s children, and so forth and so on. We want you to put a hashtag on that thing that says that you are legacy building because that is what you are doing. You can find us on Facebook, YouTube, AnchorFM. You can also find us on Instagram, and at our website, exitstrategiesradioshow.com. You can catch us in several different places on your favorite podcast applications. We appreciate you listening, please share this content with your friends, your family, your co-workers, even those in your groups, your church groups, etc., guys, but sometimes the message in the word that we are speaking here today is for you. Sometimes it is for someone else that you know. Again, we appreciate you listening. Let’s get started.
Good morning. Good morning. And great morning guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host yes that is me. Corwyn J Melette, broker and owner of Exit Realty Lowcountry group in beautiful, beautiful North Charleston, South Carolina. Hey, If this is your first time listening to this show, then you sir or ma’am are in for a treat. Because our mission here is very simple. That is to empower our community in financial literacy, and real estate education guys, we are legacy building. That is what we do. So guys, look today, we have done it yet again. I’ve told you we have been in the highest mountains. We’ve been in the lowest valleys. We have been over here and we have been over yonder. And we’ve been searching for the best guest to bring here to grace, if you will, this show with incredible information, life experiences, and most importantly insight and how to get us from where we are to not only where we want to be but where we are called to let go. So with that, today is no different we have with us none other than Mr. Johnny Wolff. The CEO of Homeroom. Johnny, how are you doing today, man?
JOHNNY:
Doing well Corwyn. That was the best intro that I’ve experienced for myself and probably on a radio show in memory. So thank you so much for having me. I’m excited to be here. And yeah, I’m excited to talk to your listeners about what we’re doing at Homeroom and about the real estate market today.
CORWYN:
Well, great, great look. Just so you know, Johnny, I’m always available. I’ll record one and you can use it way up there. Let me know what you want to update it. I’m excited about your story. So if you don’t mind, tell our listeners who you are and what you do.
JOHNNY:
Sure. So I’m Johnny Wolff. I’m the CEO of Homeroom. We help investors purchase homes remotely and rent out each room separately. And that allows up to 50% more rental income for the same house. So that’s our core offering to real estate investors.
CORWYN:
So for our listeners, I just want you all to experience it and see if you can get it like I got it. So when Johnny and I were connecting, I was taking a look reading his bio and all that stuff. And I’m in my head. I’m like, people have talked to me about what it is that you’re doing like I want to do this particular thing. So I’m super duper excited to share that on air. So, Johnny, how did you get started with all of this?
JOHNNY:
Yeah, you know, I started my career in the San Francisco Bay Area, and I live in roommate housing because no one in the Bay can afford to live in their apartment. So I lived in roommate housing for several years and had done some remote real estate investing. And then in 2015, decided to move to Austin, Texas, and invest in real estate full-time. And so for the next three years, I bought homes in Austin and rented out each home by the room. And so that worked out pretty well. And then I had a few friends who asked me how could they invest. So I was investing and so the idea for Homeroom was born.
CORWYN:
So let me ask this, and I’m sorry, for fumbling over it, because I can just see all this stuff. So if you don’t mind, I’m gonna start my fake, I don’t want to start on the far end, where it gets lucky and stuff like renting out the rooms individually, how does that work? I mean, what does that look like from a consumer base, and then also from the investor standpoint?
JOHNNY:
So the approach is that if you cut space down into smaller pieces, or for shorter periods, you can get more rent, right, so you’re kind of on a continuum, or you have single-family homes on one side, and the other side has short term rentals, and we’re kind of right in between those two. We have a pretty good-sized team that focuses on finding roommates and pairing them with homes and that team is working 24/7 to get our homes fold during the summer especially busy. And so we’re filling up each one of the houses, making sure the roommates fit with the other roommates, and making sure that they’re really good background credit eviction history, kind of the standard rental things. From the investor side, it’s very similar to single-family properties, you receive your rental check from us every month, the difference is that you don’t have any $0 months, because we always have at least a few roommates in there, instead of have one personally, you end up having kind of like a multifamily income stream.
CORWYN:
Okay, I can see that. So you may have a month where I mean it’s occasional where you could have, if you got a four bedroom, let’s just say or so you may have maybe one or two of the bedrooms that this particular month may not be occupied. So you’ll catch up in a subsequent month with someone moving in. So I would imagine in this type of augmented setting, we got common space, we got a common kitchen, we got a common living room, we got shared baths, all those things. How does that work? How do you get the roommates to work together in those common spaces?
JOHNNY:
Yeah, one of the things that we started with the theory was that most people will get along by default, as the average roommates would, maybe they wouldn’t become best friends, although some people do become best friends, but they would be able to coexist. And that’s the case for a vast majority of our roommates, they have a quick Meet and Greet via the phone, they move in, and they coexist well. Most of our homes will have some sort of issues over time. And so we have an excellent customer success team that works with the roommates all the time. And there’s a mediation process, if there are issues, and then we have we’ll find you for behavioral issues as well. So there’s kind of like a carrot and a stick, we’re kind of giving you the playbook to how to run a roommate house well as a roommate. And then we’re also saying, you know, if you do things that are detrimental to the real estate investors returns or to the other roommates, then you’re gonna get in trouble. You have to pay some money potentially, or we may eventually ask you to leave. So it’s kind of like just both sides and you manage it just like any other kind of complicated ecosystem.
CORWYN:
That is interesting. That gets my interest. I mean, real talk, John, we see so many are his many roommate stories gone wrong, right? And this is completely probably off-topic, so to speak. But you know, I just happened to read Glimpse or read this article recently, where someone was passing through, Ben was a roommate in the property for a few months, long enough for someone who came with him. It was a couple that came and one of them picked a romantic interest up with another roommate that was in the particular house.
JOHNNY:
You know, that’s the ultimate trauma.
CORWYN:
So you hear so much about, quote, unquote, what can go wrong? But y’all got it right. If you don’t mind, take me back to where this brainchild came from. What was the experience that brought you hey this is what we need to do.
JOHNNY:
Yeah, it’s sort of just an accumulation of experience that I had personally over time mixed with being in the business for a bit right when I lived with roommates in San Francisco. We would always have someone weed out people who leave. And I think we had 50 roommates from that house over the time I was there. If people leave, we put up Craigslist ads, we had rules that we all kind of agreed to. And then that worked well. Right. We met a lot of friends from that and had a lot it was a cool way to live affordably. And then as I tried to scale kind of that concept in Austin. I started to realize like, if I’m managing this, we have to have a bit more because I’m not in the house anymore, we have to have a bit more oversight and a few more kind of rules and incentives. And so we’ve taken kind of those core themes, and we have made service and all homes because we find that the biggest point of tension between roommates is cleanliness, we have yard care, because roommates won’t do the yard and that causes problems with the city or other things, we handle that, then we have like a guide and that escalation process, right. And so all these things were sort of pieces that I had lived through personally and had done at a really small level in Austin. And then as we’ve grown bigger those themes, our teams have built out each thread and made it better and better over time so that the roommates are coexisting on a more happy basis on an ongoing basis.
CORWYN:
So you learned yourself forward is what I just heard. Let’s come back around, Johnny, from the other side, I’m an investor, let’s say, I have an interest in this particular model. What are some of the first things you’re going to tell?
JOHNNY:
Yeah, the first thing I’m going to tell you is what are you looking for as an investor from your next real estate investment, because I think that a lot of times we follow network connections or people we know. And I think the first step is typically to select your market and make sure that that and that can be a sub-market within a certain metro or that can be a different city and Metro altogether because some cities are going to do well and cashflow some are going to have the potential for a lot stronger appreciation. So it’s important to understand which of those is more important to you as an investor. Secondly, we’re gonna get you with our team. And we’re going to start to create actual pro formas of homes that are in that city. And some of our investors want to do some more advanced rehabs. And so they get that instant equity, sometimes people are trying to keep as little out of pocket as possible. So that will be part of how we work. And then we have a pretty simplified process, we connect you to a real estate agent in the city that you’ve chosen to find a home, that is your preference, we also have all the vendors you’re gonna need to get the home set up. And then once it’s done, our hub will take care of everything, and you’ll start to get checks every month. So it’s the first thing is like in your market and what you want kind of once your home is fully set up.
CORWYN:
Okay. Fascinating ideas, man, I’m telling you, because ultimately, it sounds or seems rather simple. So let’s say that you have a three bedroom, two bath, which means in that situation, one room possibly has its private bath. My question to you is whether the rooms rented, vary in price based upon access to the bathroom. Proximity to the kitchen? To the living room? How do you price it?
JOHNNY:
Yeah, that’s a good question. That’s one of the more challenging puzzles of the whole industry. How do you price it now we price a premium for master bathrooms will price larger rooms get a premium, we have an analytics team that sort of looks through as an ongoing exercise where we look through the current listings, and we look at the lead volume. And we’re looking at kind of different, we have a data scientists on staff as well, to do that. So creating your pricing. And making sure it’s at a price where if you lose a roommate you can get another roommate quickly is important. And it’s something that we take very seriously. But it’s not particularly intuitive. It takes some analysis of size, location, and all these different varying factors. But we’ve gotten good at it.
CORWYN:
So I imagine you probably have– I’m gonna hit two questions in here, as a backup to this one, that your terms vary, I would imagine. So, do you do a lot of month-to-month on these rooms? Or do you require a certain amount– do you advise people to
require a certain amount of time?
JOHNNY:
Yeah, so we don’t do month to month the goal is to get your leases, right? So we have staggered pricing. For shorter leases, you’re gonna pay more, and then for longer leases, you’ll pay the list price. And so we think that owners should get those longer-term leases. It’s the best for the roommates. So it’s all of our incentives to our leasing team and the price of the roommates is all pushing people towards a 12-month lease. That’s the goal. If you’re with us and you get to a 12-month-a-month option will increase the price until you sign a new long-term lease but we want to control the term because we want to push that occupancy and the total rent receipt up and we don’t want people leaving during the winter time because that’s problematic in real estate.
CORWYN:
Yeah, it typically is more difficult. And a gentleman probably wouldn’t move into the cold man.
JOHNNY:
Nobody, nobody, nobody wants to snowshoe in to take a tour of a property right?
CORWYN:
Exactly, exactly. I don’t want to move in the devil to some either but, you’re in Austin. So look, that’s 100-degree weather day, man, that some man that’s Oh, that’s awful man.
JOHNNY:
It’s cold for you too right?
CORWYN:
We’re all super low here man. Y’all are just an oven, We’re a soup bowl, we have a crock pot. That’s what I tell people. We’re hot and we’re humid, but you’ll are just hot for no reason. Johnny, I’m so fascinated by this man. Because like I’ve said before, you guys have gotten this right? You you learned yourself forward? What are the typical pitfalls, then I’m gonna come back around because I do want to kind of double down on when you guys do this, you’re expanding in other markets. But you also telling people Hey, if you want to invest with us, we can help you and we can help you build a portfolio. But what are those big pitfalls, if you don’t mind sharing, not only do renters run into, but also what do the property owners run into in this entire process? And that’s scary.
JOHNNY:
I mean, I think the pitfalls on the tenant side are we talked about him before, which is simply that some of the time roommates don’t get along, I think your roommate and who you live with is a huge amenity. And so one of the things that homeroom does is we allow you to transfer to another house, kind of as part of the program. So you hit a button, you request a transfer, and you go somewhere else. So we find that that’s the best for the investor, even though you lose a tenant kind of the happiness of the house matters for your return. So it’s something that we’re going to kind of initiate on your behalf and find someone new, that fits with the culture of the house. on the investor side, I would say the biggest challenge is sort of the market challenges today we have the interest rates are high. And we have kind of some pricing stagnation, and there’s still a lot of competition. So it’s a very difficult time to buy, I think generally. I’m not sure if that’s a pitfall though, is that? Can I answer the question? Or do you want me to go kind of more deeply into the process?
CORWYN:
No, it does answer the question, because that makes perfect sense. So people aren’t your hurdle. I don’t want to call it necessarily an obstacle, but your hurdle for people to get over is no different than with any other real estate investor in today’s market financing, which is how much money I’m going bar gonna cost me. What does that look like? And what are my projections going forward? So that makes perfect sense. Johnny, Somebody says, Hey, this is what I want to do. I think I want to do it. What is that intake process for you? And that particular consumer?
JOHNNY:
Yeah, they’ll come in though, and they’ll schedule a meeting with our investments team all these guys have done hundreds of deals and have a lot of experience in financial planning, more generally, as well. So which we think is nice plus until you meet with them. And we’ll kind of select the type of home and the location for you. At which point, we’ll start to, have an underwriting team who looks at all the homes and all of our markets every day and will start to share homes with you that provide returns that match what you’re looking for. From there, once you say I like this one, we’ll connect you with the agent, and you can start to make offers. So that’s the process at the very beginning of it. Once you get a property under contract, our team will review the inspection report with you to make sure it’s a good deal. And we’ll also do a re-underwriting on the room pricing. As we get more information, we want to make sure that we have a better idea of like, okay, or is the rent going to be what we initially thought when we did the initial review, right? And so all this, you still have a chance to kind of like pull the plug and go to another property. And then we’ll do construction on the home and set up we will add furniture to the common areas. And then the home will be ready to rent. And so you’ll get a nice 3D tour that you can like, look and see your home. Or you’ll start to get conversations from our investor success team. And they’ll start supporting you and answering your questions and you’ll start getting checks. So that’s pretty much the kind of play-by-play of a process.
CORWYN:
So thank you for that because you touched on a question that I had about furniture so you guys provide common area furniture, but you allow the tenant to bring their furniture in and furnish their rooms.
JOHNNY:
Correct. We found that people stay longer if that’s the way that it’s set up. And we want like I said longer stays to be expensive and roommate rentals or single-family homes or any kind of real estate you want to you want your tenants to stay as long as you can.
CORWYN:
Yeah, that is very true. So you guys fully equipped the kitchen. All the dishes and pots and pans and everything and so forth and so on.
JOHNNY:
It’s a pretty basic package, it costs a grand or two, right? Just some basic utensils so people when they move in on day one, they could like cook dinner, and eat dinner together in the living room or at a kitchen table. So that’s the goal. We try to keep it pretty basic because we know that’s an expense to the investor. And also we want to make sure that the tenants feel like they have a responsibility to provide things for them.
CORWYN:
I see that I love that. Johnny, looky I’m feeling and digging this concept, man because you again, for the umpteenth time you got it right, because so many times I’ve seen witness people try to do these roommate situations, they’re not in a house and try and do his roommate situations. And it just goes wrong. It’s a terrible experience for them and the tenants. And it’s very difficult and challenging to pull this off effectively and efficiently. And you guys have the system to do that man. So kudos to you for a quote-unquote, failing forward, so to speak to get here. So Johnny, for our listeners, where can people get in contact with you? How can they reach you for more information?
JOHNNY:
So our website is www.livehomeroom.com. And that’s, why they’ll have an investor page, you can pretty quickly hit a couple of buttons and schedule a call with our team. You can also reach me personally at Johnny@livehomeroom.com. I’m happy to answer any questions people have about roommate living roommate kind of recruiting, or any of that stuff. That’s how I got my start. And I thought it was one of my favorite ways to invest and manage property. So I’m always happy to kind of provide recommendations or knowledge to people who are looking to do it themselves.
CORWYN:
Cool. Look, I greatly appreciate that. So Johnny will ask all of our guests, I call it the mic drop question. You know that thing that? Do you like that? So I call it the mic drop question. It is if you could go back, if you could encounter a younger Johnny, and could tell that younger Johnny, this particular thing that would have the younger Johnny accelerate to where the current Johnny is, which means that the current Johnny will be further along. What would that be?
JOHNNY:
Yeah, I think the thing that comes to mind right off the top of my head is sort of there needs to be a balance between hustling and working super hard. And also sort of reinvesting yourself in terms of like your energy, Stephen Covey and Seven Habits of Highly Effective People talks about your production, and then your production capacity. And I think it’s sort of a young man’s mistake to just go that I made to go all into production and not kind of refuel and take the right breaks and to spend the right time and thought and to be aggressively in action. So I think the balance there is, if you get it, right, I think you can sustain the marathon better. And you can get there actually faster, even though it feels like you’re kind of going a little bit more slowly because you’re recharging yourself as you go. So I think that would be the number one thing I’d tell younger Johnny, and hopefully, he would be even further along than me if we did that.
CORWYN:
Awesome. Awesome, Johnny, man, I greatly appreciate it. What I just read between the lines is take a vacation, take a break now and again. So you can recharge, re-energize, refocus, and then come back again. Yeah, and I’m guilty of that. Taking a break and taking a vacation kind of feels like I am just like okay, we stop it. No, this is okay. Let me pause so that when I come back when I hit the gas, I mean, it’s like stopping for fuel man. It’s like stopping and instead of putting at seven, we put some 93 in. And when you come off a vacation, man, you it’s like you got 93 octanes, or maybe look, maybe you got rid of that colon, and you go straight alcohol now, you know, straight gas. OhI’m guilty of that as well. So thank you so much for sharing that with our listeners. So Johnny from the bottom of my heart, man. But we’ve quickly reached the end of today’s show. But I want to say thank you again for taking time out of your busy schedule to be here with us and give our listeners an introduction to Lord Have Mercy Homeroom. I mean, I’m just, I’m still like, hot. So kudos to you, man for what you’ve done, what you’re doing, how you’re making a difference, and how you’re investing differently. Because most people don’t think beyond just the status quo. And you guys are on the fringe area, if you will, and doing an amazing job. So again, kudos to you, and thank you so much for being here on the show with us.
JOHNNY:
Yeah, Corwyn, thanks so much for having me and I enjoyed the conversation.
CORWYN:
Thank you. I think I need I need to share that with you first. For our listeners, guys, thank you all so much for tuning in today. Thank you all for getting and pulling the knowledge out of this conversation please reach out to Johnny, his team, and his group, and touch and find out ways that you can expand and most importantly, invest differently. Because that’s what we need to do. Everybody isn’t meant to do it the same way. And everybody won’t do it differently. They’ll figure out what your niche or your role what your path is. And let’s try but I think aggressively. Guys, y’all know how I feel. Y’all know what I say? Y’all know, I always like to put the two of those things together and say it to you this way. Which is I love you. I love you. I love you. And we’re gonna see you guys out there on those streets.
Guys, that was a great show today. And we thank you so much for taking the time to listen to Exit Strategies Radio Show. My name is Corwyn J. Melette. Yes, that is me. And I thank you from the bottom of my heart for tuning in. With today’s episode, exit strategies are my faith. It is how I give back to our community. It is how I foster goodwill. spread the good news, and trustfully help you get great results. Guys, as I always say to you, as I always say to you, I love you. I love you. I love you. And we gon’ see you guys out there in the streets.
