How Co-Living Can Turn Pain Into Purpose and Fulfillment with Sam Wegert

[0:00] Welcome back to the REI Agent. Our guest today is Sam Wegart, a co-living real estate investor, podcast host, and entrepreneur who achieved financial independence alongside his wife at just 23 years old. Before real estate, Sam built and operated six martial arts schools locations serving 1,500 students. He has since channeled that same systems-driven mindset into building a portfolio of 150 plus co-living beds and eight short-term rentals. Generating two to four times the cashflow of a traditional rental strategy, Sam is the host of Scale Your Co-Living real estate podcast and has been featured on BiggerPockets. Sam, welcome to the REI Agent podcast. Thanks, brother. Appreciate you having me. Really excited to be on. Thanks for the opportunity.

[0:45] Well, I’m glad we’re not in person in case I offend you because I feel like you could probably beat me up pretty easily. I’ve got a torn ACL right now, so your chances are much better. Does that mean you have surgery in your future anytime soon? Actually, yes. In your neck of the woods in Charlottesville. I have my appointment next month. That’s one of the reasons I’m coming back, actually. No way. You know, so I had meniscus surgery last year. I had a torn meniscus. So if you happen to have Dr. Bombush, he’s amazing. He’s out of Charlottesville. He’s in Martha Jefferson Hospital. Okay. Okay. I’m doing UVA. I think Dr. D. Oh, well, he’ll take good care of you. Wait, do you know him? No. No, I just know of UVA.

[1:27] Yeah. It’s a great place. And we have some friends of ours are physical therapists that work with the surgeons over there and they just talk really highly of them. Nice. Yeah. Yeah. I’m not looking forward to the six to 12 month recovery time. I mean, it’s probably the three of us that would be pretty intense, but they say it’s actually worse than like a knee replacement, which is crazy to me. Like in terms of recovery time, because I have both meniscuses and the ACL. So yeah. Ouch. Ouch. Ouch. Ouch. My gosh. How did that happen? Martial arts. Oh. Yeah. I was in Nepal. I was performing. I was in Nepal. My wife and I support some orphanages out there. We were performing for like 300 of these orphan kids at the orphanage. And I did this kick and landed on one leg. It was like two seconds into my performance. And I just immediately hear it pop, crash, fall on the ground. And these kids go wild. They go crazy. They think it like me falling is like part of the performance.

[2:17] They love it. I just look up at my mentor and I’m like, I’m done, dude. I’m done, dude. He comes and finishes out for me. It hurts so bad. Oh, that’s awful. I’m so sorry. Wow. That, yeah, it’s, it’s a, it’s a process. So, you know, definitely give yourself the grace to get through it and all. Luckily, it sounds like you, you are, you’ve positioned yourself well that you’re not needing to, you know, be hustling on your feet as much. So you can, you can maybe take some R and R there. You mentioned off air that you’re actually in Columbia now, right? That you spend half your time in Columbia. I am. Yes. I love it here. It’s a, it’s a great life. It’s a good lifestyle. And I, I just made the decision, I guess a few months ago, I’m actually going through separation right now. It’s not super public, but I’m starting to talk about a little bit more. And so that was kind of the decision to, I’ve always wanted to live overseas. I’ve always wanted to live Spanish. I like the slower, slower pace. I think a lot of people are doing that. Honestly, it’s like being in America, I go back to America and it’s interesting how hustle, hustle,

[3:16] hustle, grind, grind, have three jobs, make money, you know, keep up with the Joneses. Like I kind of feel. And then here it’s more about like, are we hanging out? Are we having fun community? What are we doing this week? It’s, it’s, it’s a little different than I’ve lived the first 15, 20 years of my like kind of career life. Yeah. And, uh, I enjoy it. I enjoy the slower pace and it’s a nice, um, juxtaposition to use that, to use that word to the United States. I really enjoyed it. Really enjoyed it. Yeah. You had mentioned that you have a good community there. And I was curious if those are people that you knew in the States that have also relocated, or are these like locals that you’ve gotten to know? Really both. But, but a bunch of my friends here are people who have kind of had that same like mindset of like, okay, they go through some big life transition and then they make the move. They realize you can live on a lot less here. They realize like life is really good and the culture is really nice. And so, yeah, a bunch of my friends that like live here permanently were the ones that kind of dropped, drew me down here, but now I’ve

[4:08] met a bunch of locals too, uh, which are fun. Espanol muy mal still, but I’m working on it. I was, I was born in Mexico and my dad is a Spanish professor. Uh, my lovely wife here speaks, uh, Spanish well. And, uh, my sister and brother-in-law lived in, uh, Nicaragua for three years and are fluent and I know German. That’s awesome. That’s amazing. I wish I could, I wish I could speak Spanish as well, but that, that, um, that is a dream, man. Like I, I’ve, I’ve definitely had that dream, not necessarily specifically to Columbia, but like just to have that, you know, that next phase or whatever to, to, to, to slow down, uh, to take the kids into a new culture. Um, we’ve talked about Spain, you know, a lot as, as a possibility for that, trying to get that Spanish, um, language. Uh, but then Columbia would have the, the time zone. If you are doing anything, you know, related to business and you have like a similar time zone to, to, um, yeah, the United States. But yeah, we, we do, we, we hustle too much. And I don’t know if you’re familiar with that, uh, the Mexican fisherman proverb or story or whatever is that, I don’t know if that’s a Tim Ferriss thing, but I love,

[5:23] I love that. Cause, uh, there, there is a friend of mine. If people aren’t familiar with it, it’s a, you know, it’s a guy goes out and fishes for like, you know, a couple hours, just catches what he needs. And when he’s done, he comes back and then he goes out and plays guitar and drinks wine on the bike, you know, in the streets or whatever, it’s their place. Um, and then a local, uh, us business person comes and is like, you need to do more. If you would just would spend a few more hours, you could then, you know, you get a bigger net, get a bigger boat, get a fleet, you know, make this whole corporation, all this stuff. And, and, and then he’s like, yeah, but then what? And he’s like, well, then you could, you know, do whatever you want. You can go play guitar and drink some wine. It’s so true, man. What a beautiful, yeah. I think, I think there’s a big growing movement. I mean, there’s so many expats now are people that get to a place in their life and they realize I want something a little bit different. And, uh, I think that’s also where I got to. And I really, I really resonate. I don’t have kids right now,

[6:18] but I really resonate with the idea of wanting them to understand and experience both cultures. Like I love the Hispanic culture. It’s, it is more family based. It is a little slower paced. Um, and I, but I, there’s still pieces of me that love like hustle and grind culture from America. I’m like, Hey, build something American dream and do that. Um, it’s just a little different, you know, a hundred percent. Um, let’s, let’s, uh, we normally start with like, how’d you get into real estate? We’ve had an amazing conversation. I feel like we’d have a whole podcast on this topic, but I do want to hear, I mean, you, you, uh, were able to become financially independent by 23. Um, and that you were, had, you know, what was it? 15 schools, uh, six, sorry, six martial arts schools. We got up to eight at the max. Some of those numbers are a little outdated. We have more doors than that too, but it’s, uh, but yeah, the martial arts was kind of my first business I got into when my mom put me in for confidence and building discipline. And I was the, I was the homeschooled kid who needed a little bit of a little bit of encouraging to get out of his shell.

[7:15] And so my mom was like discipline and confidence for this guy. And I really am a huge fan of martial arts. I don’t know if you, you guys have participated in it too much yourselves, your kids, but I mean, it really took me, gave me just that thing to excel at. That was like my thing, right? It’s not, it’s a team sport in some ways, but really it’s a very individual journey. So huge fan of that, but getting started into real estate. I mean, I, I really just started a, started a business when I was very young. And, uh, when I bought my first house, I’m homeschooled, eight kids, uh, actually not too far right in Lynchburg. I was raised in Lynchburg, Amherst areas. We’re not too far from, from, from you guys. My dad’s worked at Liberty university for 40, 45 years or so. And so, um, we, we, you know, we grew up in this three bedroom log cabin, four kids to a room, 1900 square feet, four kids to a room. There’s 10 of us in this house.

[7:59] Right. And so when I bought my first house at first, I was so excited and buying my house, I was making good money. I was building my martial arts company. I was, I was doing all of this, you know, being an entrepreneur from a really young age, just kind of setting out to prove to the world that I could do it and I could be somebody and I could be successful. But, uh, when I bought my first house at first, I was really excited because I thought, well, I’ll just have my own space. I want to have my annoying siblings everywhere. Like, it’s going to be awesome. And I get in and I really, immediately realized like, it’s too quiet and like, I’m used to commotion. I just grown used to living with people. And, you know, and so, and so I started renting out rooms, not for money, not because I needed, I, not, not because I needed anything just because I was like, I need friends around me as I build my martial arts company. So I had a guy move in that was a foreign exchange student. Actually he was from Mexico and I became best friends. He was my housemate for a couple of years. I had a guy, a local guy that just needed like a

[8:44] cheap room. And I took half my living room, rented out a third room, which like threw up a wall. And I rented out a fourth room to this guy who just was a local construction worker in Charlotte. This was in Charlotte, North Carolina. Okay. And so I kind of wake up one day and I realized I’ve got three housemates and I realized like I’m providing like housing at like half the cost of what these guys could rent a studio apartment for. So they’re like pumped, they’re excited. I realized that like, I’m living for cheap. Like they’re basically, I’m making a few hundred dollars a month to live in my house. Right. Which is like pretty cool for a young guy that’s trying to make it. Um, and I’m not lonely anymore. I’m like having fun and enjoying my housemates. And that was kind of the aha moment for me of being like, well, I’ll just do this room rental thing. Like, it’s kind of like I was raised.

[9:21] And so that was how this thing was born. And I just went on this journey again, not to like be the main thing in my life and ended up becoming the main thing in my life. But I kind of went on this journey where I would just buy a house a year. And I was like, stretch myself and be like, okay, I did it with four housemates and like, none of us killed each other. What if I do it with five? Then I’m like six, right? I’m like testing the limits of my family upbringing. Right. I can, how close can I get to 10? But my wife at the time, I had like six roommates and she’s like, what is going on in this house? We’re out there and things are happening. And I’ve converted a couple of dining room to a bedroom and a living room to a bedroom, you know, and it just became this thing.

[9:57] And, and so we can take that any direction you want to go, but that’s kind of my initial start. I really wasn’t trying to be a real estate investor. I ended up being this like massive house hacker. And then I just, you know, I never sold a home. I mean, I have now, but the time I was just like, okay, keep that one, set that one up, move to the next one, move to the next one, move to the next one. So it was my life experience. Yeah. I mean, that’s like literally what I like preach about. If there’s an agent that wants to, you know, kind of get started in both their sales business, but also, you know, and investing like what better way than house hacking. And you’re just, you’re just turning that dial up even further by creating extra rooms and, and all that. So, I mean, it’s, it, there is a huge need for like workforce housing and, you know, I mean, can you, can you combine or have you combined like the midterm rental kind of market plan with, with the co-housing as well?

[10:48] Yeah. I want to say one quick thing to what you said about agents, like starting this way when they’re starting to invest. And it’s so true. And the biggest kickback I get against people doing is like, well, I have a kid or I have a, I have a, I have a significant other and a kid. And I don’t want to like live with people. So I devised this strategy after like 25 people told me that this is why they couldn’t do this house hacking thing. I said, well, here’s what I want you to do. I’m going to give you the buy box for the perfect co-living. And that’s what you’re going to go buy and live in with your family for a year. Don’t live with anybody, but you bought it with co-living in mind. Yeah. You can use a primary residence loan. You can get zero, three, 5% down, whatever.

[11:21] When one year and one day gets up, you move into another home. That’s going to be a great co-living home. And that one you’re going to convert it. So I call it like advanced house. You actually never live with someone. Cause they’re always like one house ahead of them. No, I got to do a little faster. Cause I got to like move into it. I didn’t care. I just lived in the master bedroom and rented all the other rooms, right? And that and convert it. But I, but I’ve had a lot of students that have kids and families be like, okay, well I’d have to move my family, but okay, if I could get this house to cashflow of 1500 or two grand, which are a great co-living home can. And like most like, okay, that’s two to three. Well, it’s five, six grand a month after three. Okay. I’ll take the three year hit. Cause really you can do it in three years. So I do, I say that cause I want to inspire people.

[11:54] Like you can do this even if you have a family and you don’t have to like even make the sacrifice of living with someone. So I just wanted to say something to that. Yeah. Yeah. Yeah. Totally. Um, maybe, um, let’s, let’s, let’s kind of, I know there’s been, uh, the, some, uh, products now. I mean, what’s, what’s the, what’s the co-living one that we, we, we, we, we, as split. Yeah. Um, are you using platforms like that then as well? Or, I mean, honestly, when I saw co-living, it’s kind of like become a trend thing, but you just kind of invented it yourself alongside, I guess. Yeah. Yeah. Before co-living was a word. Yeah. I bought my first, it was my first house was 15 years ago. Yeah. Um, so pad split, what people have to realize about pad split is pad split. When they first started, they said, okay, we’re going to like manage the property. We’re going to market it. We’re going to fill it.

[12:37] We’re going to kind of be this full service to help people fill co-living homes and what they, what they’ve become. And I’m a big fan of pads, but I’m friends with all the executives and their legal teams helped me set up on the legal side of things a lot. So I have to give them huge props and huge shout outs and they’re leading the industry and they want to solve affordable houses. The mission is pure. What pads, but basically is, is it is a marketing company. It’s like Airbnb for every means it is the marketing company that helps you fill the home, but they’re not going to manage the home for you. They’re not going to manage the members for you. There’s so, so just to understand what it does, it’s a marketing company that feels strong. And I had, I was doing this well before pads, but even got on the scene. And so I had already built a property management company at that point. That was a full service, you know, room rental co-living property management company. Now we manage about 500 doors here in Charlotte, but like, so, so yes, I put my first one on pads, but mainly because a lot of my students that I’m

[13:22] coaching either want to use it or have used it or are interested in using it. And so I was like, well, let me, I need to like understand this platform. And so I wanted to have my own one on. And so as long as people understand what it is, it’s fine. And the things I love about pad split is they can fill your rooms fast. They put literally millions of dollars into marketing this concept. And they are, I would say responsible for growing this concept in the States. What I don’t like about it is that it’s week by week. And so you are going to get, you asked that question, Mateus a little earlier, like this is more of a midterm rental or long-term rental in my co-living homes that I manage with my company. You signed a 12 month agreement from the date from day one. And the other thing is I don’t furnish the rooms. It’s just like a little nuance, but like people can make their decision whether you want to furnish rooms or not furnish rooms.

[14:00] Pad split makes you furnish the rooms, but now it has a little bit of a short term, or maybe like you said, a midterm rental feel. Yeah. For me, I want, I call it, I call it the, the room is the new apartment. Like it’s not the American dream, but it’s just what people are resorting to when they want to save money. And frankly, they want to live a bigger life. So they want, they want to spend more money on life, not on housing. And so they’ll, they’re willing to spend $700 on a room, $800 on a room that utilities are included and they want to bring their own stuff in. And when their own stuff are in, they’re going to stay longer. So you’re getting a little bit of my philosophy of kind of like, I like the longer term kind of play with this model. And there are people out there that are renting week by week and furnishing rooms. So it’s got that feel. And it’s not, not my preferred model, but it accomplishes some of these same outcomes of solving affordable housing and bringing people together around this housing model. Yeah. Okay. That’s interesting. I did have a really quick question and then we can jump back to what you’re going to say. When I was curious,

[14:50] when you moved out of your family home, which was loud and full and you moved into your own apartment, I was just curious if it was a surprise to you that you ended up missing some of that, that you were so eager to get away from. Good question. I, was it a surprise to me that I missed them or that I missed the commotion aspect of it? Yeah. That you ended up feeling more lonely or it was too quiet or you’re craving noise or you needed the fullness of a house around you. Yeah. I think I’ve got like two deep sides to my personality that I know about now that I probably didn’t know about when I was going through this is that I do have, I call it the monk side of me that does really enjoy like silence and aloneness and quietness. And I go to the mountains, you know, every weekend I can, but I, but I’ve come to acknowledge and learn that I do love having people around me. It just is good for my soul and it keeps me out of my head too much. And so I think in the moment, in that moment, when I first walked into my first house, yeah, I would say I was surprised. I was like, wait, I thought I was going to enjoy all this alone time. And it’s not what it ended up being.

[15:46] Yeah. Yeah. When you were starting to say you were going to, you know, when you bought your own house, I was, I was curious whether that ended up feeling like a relief. You know, I can finally breathe. I have my own space. I have my own bed, my own room. And maybe it was a little bit of both too. Yeah. It was probably a little bit of both. Our middle child, our middle child is forced to share a room and is, is very not happy about it. But you know, we, we, we have a five bedroom house, but it’s three bedrooms upstairs, you know, and how many kids do you have? We got three. So we’re all upstairs and two of them are sharing a room. And that’s just, you know, the, the end of the world. And, and, you know, none of the kids are, you know, old enough or feel brave enough to be downstairs. So like, that’s not a thing.

[16:31] Yeah. It’s just funny how like, you know, perspective, right? Like, you know, I think my parents would have been a very similar boat growing up than that you were. And that’s just what the reality was. Like you just deal with it. Yeah. But you, you know, you’re one of two and you’re, you had a sister. I’m one of five. And so I also, there’s a loud, loud house, lots of sharing. No, it’s beautiful. I wouldn’t trade it for anything in the world though. I really like it. I mean, being homeschooled, we were home all the time. Wow. Wow. Well, it was like, you’re, you’re on top, you know, you’re on top of each other all the time. So even that it wasn’t like, okay, go to school and come back and see my siblings. Like they’re the only people I know. We were, we were a little, we were a little out there. We were in the country. We were in Amherst. We’re out of it.

[17:12] A lot of patients. Oh my gosh. Yes. Indeed. Or my mom, especially. Happy Mother’s Day by the way. But yes. Yeah. Yeah. Um, Sam, tell me, let’s get back into the co-living. Um, tell me about how you handle like screening tenants. Like how do you handle like multiple people living in the same place? Like, is it, I would imagine you’re not necessarily segregating it between men and women. Like, I mean, how does like, or other house rules. Um, yeah. Yeah. Yeah. There’s a lot to unpack there. I’ll see if we can put this in a bite-sized chunk for people to kind of have some actionable things to take away. Uh, there’s three things you got to do with co-living to make it successful. Although if you don’t do these three things, you lose and you’re going to hate your life. Number one, it has to be consistently clean. Two, it has to be consistently quiet and three, it has to be safe.

[18:02] And the fourth bonus one that we throw in there a lot for our students is just community. Like if there’s something you can do to try to facilitate the home, which is really six, seven, eight, nine, 10 random people coming together. If you can try to facilitate community, then you’ve like won the game. Right? So the things you can do for community, or you can throw pizza nights. We do different contexts on decorating the room for Christmas. I mean, Thanksgiving million things you can do. It’s not my superpower, but I’ve got some people on my team that really love to get creative with how they can do community things. Um, and, and, and, and also we, we launched this thing where when we hear about something that happens in the home, if something’s like going into a difficult time, we’ll send little gift cards and things like that is, is really great. Uh, we also put like board games and things in the common area. We do not do any TVs in the common area. We don’t want people fighting over what to watch. We’ll just, um, try to give them some ways to connect, which is really cool.

[18:48] So that’s, that’s one big piece of this puzzle. Uh, the clean is that there’s, there’s a mixture of like people taking care of the home and different responsibilities that they need to have. We, that we give them this checklist that they have to fill out once a week. Uh, well, it has to be filled out once a week, but it rotates between every person that’s in the home and they can opt out of this for a fee. They can say, I don’t want to do the common area cleaning. I’m not a teenager or whatever. It’s like, no problem. We’ll get the cleaners to do it. Like just, you get to pay the fee if you’re not going to be do it. So there’s, there’s a little bit of like systems. You’re talking about house rules, the things that are in place. Uh, this is, I’m laughing cause this is a lot like running out a homeschool family of eight. Now that I think about it, it’s like my mom had all these systems in place, right? You’ve monetized this. Yeah, exactly. Dang. I never thought about that before. I really should thank my mom for this business that I get to do. That’s crazy. I never, that does never cross my mind. Um, yeah. So there’s the cleaning

[19:37] aspect. We send in professional cleaners at once or twice a month to, to do different things like that. And then there’s just different, different house rules you got to have, you know, no, no comment, no, no personal items in the common space is a big one we talk about. And our cleaners will even take calm. If there’s someone leaves a personal item out, laptop, whatever they’ll stick it in a box. And then if it’s there, the next time they come to clean, like we take it, we’re like, Hey, like super serious about this. Cause the home needs to feel clean and fresh every time you walk in, just for showing it to a new person. So clean is a big one. Quiet is just like having different house rules, uh, like quiet hours, or we call them headphones hours.

[20:05] It’s like, look, you can do whatever you want at any time of the hour at the time of the day. But after 11 o’clock, everything goes to headphones. You Bluetooth, your TV, you do it, whatever you got to do in your room, um, to make sure that there’s quiet hours. So that’s something that we’ve done. And then just not having the TVs in the common space. We used to like deck out the TV, common spaces, TVs, and this really cool feel. And it’s like, realized everything was just super noisy. Um, and then safe, safe is something as we’ve scaled, uh, and in our community now, I think we just hit like 3000 rooms around the United States. I know it’s not a lot in like traditional real estate sense, but for us as a small niche, we’re really proud of that.

[20:34] Yeah. And it’s like, these are affordable rooms, right? So one of the things that we’ve learned as we scaled is like, you know, those keyless entry door locks are really important on every door. We put cameras and we kind of just now do cameras everywhere. We do cameras on the outside for safety. We do cameras in the common areas. And again, it’s in their agreement. They initial it. They know that it’s there. It’s not in any place where there’s an expectation of privacy, but think of like the common area of an apartment building. That’s basically what the common area of a code is. It’s a mini apartment building is what you’ve kind of turned it into. Um, and so, uh, that has become really, really important. And then like just no weapons, like all these like different things that you’re just gonna, you’re gonna make them all initial off on so that they understand aside from all the rules. And I’ll kind of just put a ball on it with this. The number one thing is just setting clear expectations and finding the right people that fit this model. So we have a, we have like literally like we interview them process. Like we’ve lived in a co-living home before.

[21:24] Of course, we’re going to do all the traditional things, the background checks and things, but you just want to make sure this person is a community oriented person. And honestly, you’re looking for like a type B person that just needs like in a perfect world, you’re looking for a type B person that just needs a quiet, clean, safe place to work and is quiet and is going to just do their thing and is looking to spend less on housing. Um, so that’s, there’s a lot we can unpack there. If you want to take that any direction we can, but those are a few thoughts just to get people’s brains turning. No, it’s really, really fascinating. It’s one of the things I thought about, um, the most is, is the safety thing I think is where, what, um, has come up in my brain. So that, that makes a ton of sense. And it sounds like then you would also be furnishing like the common areas.

[22:05] Like I would imagine then you’d have the kitchens, um, have like utensils and plates and that kind of stuff as well. Yeah. The only area we do furnish is the common area. Yes. Yeah. Okay. It sounds, it sounds also very relational and very personal. Like you said, if you hear somebody’s going through something, you’ll send them something. And I, I was curious how you, how do you keep tabs on it? Having that many doors? Is there somebody who’s, that’s their job to kind of build relationships and keep relationships going? Yeah. Yeah. We have a full-time for my property management company, we have a full-time like member support person. Um, the one thing we don’t ever worry about is knowing what’s happening in the homes because people will tell us, right? People will tell us or we’ll find out or we’ll see it on the camera or whatever, you know, we kind of like can understand, but I mean, there’s a, it’s back and forth. Uh, but it is, we do have a member support person and part of their job is we launched an initiative last quarter just to try something where we were going to do these like

[23:00] coffees with Caleb. So Caleb’s our member support person. He’s just going to like get plopped down in a home in the common area and, uh, open his laptop. And like, we all work remote anyway. So like you’re working from the wifi of, you know, stone, the stone crest on this week or, or this day, and then you’re going to rotate around, you know, and, and there’s more, some of these things are more or less successful. But, but the idea is we are, we are trying to just, yeah, we’re trying to bring people together and make this something where it’s not just everybody’s isolated in their room and they rarely come out to the kitchen in the common area. And there’s all kinds of little techniques we’ve tried, but I think that’s one, that’s one thing that we’ve done that was somewhat successful.

[23:32] Um, there’s a good, healthy communication. We just started creating like group chats with every home too, so we can introduce the members to the entire home, you know? And so we just do that on telegram. We’ll just introduce them. Hey, there’s a new member. And now they’ll start chart chatting. Within those telegram groups. And so we can kind of, we monitor them. We still own the group, obviously we kind of understand what’s going on. Little things like that. Yeah. Interesting. You kept mentioning students. Is this usually around university college towns or, or is it like teleworking people? Yeah, believe it or not, out of 500, out of, of all the rooms we have in Charlotte, we probably have like one or two students. It’s just not student.

[24:10] It’s not our niche. Like I would, I would call student housing is like a niche within our niche. Okay. It, you know, right. You need to be close to campuses because cause there’s all kinds of different, like just a, just little nuances to student housing. And there’s whole companies like big companies that only focus on student housing and apartments for students and all. So for us, it’s just think about anybody that’s think about anybody. You guys are in Harrisonburg. So think about anybody that’s makes 15 to $30 an hour. I mean, in Harrisonburg is not a super expensive city, but like Charlotte, your tier two cities, your Charlotte’s or Dallas’s and your tier one cities too. Your San Francisco’s or your New York cities, your Chicago’s. I mean, those are insanely expensive, right? So you’re talking, it’s very common there, but even your two tier cities now have kind of started to outpace the expensive, the expenses, the cost for living as it started to outpace what an average wage would be. So you’re, you’re talking airports, Amazon warehouses, Walmart distribution centers. You know, any, anything, their call centers, a lot of big call

[25:05] centers. A lot of times our students, you know, they’ll come in or whatever. So, you know, that’s 15 to $30 an hour car repair workshops, like that’s who needs this housing and that’s where it’s desperately needed. So it’s really working professionals that just are outpriced. And that, that kind of brings me into the second question here about, you know, where, where these properties work well. The thing that comes into my mind, knowing my area is, is zoning restraints for a number of unrelated people living together. So I’m curious about what, yeah, where, where do you, if you, if you are exploring a new market, if you’re teaching somebody to look at markets, what are you looking for? And, and are there any strategies for zoning or what are your recommendations when you consider a house to buy and make into one of these?

[25:48] Those JMU party houses really, really got the city cracking down. Is that what’s going on over No, I feel it. It’s very college, very common in college towns. There’s, there’s three things to making co-living legal. I’ll cover them all real fast. The first one is probably what one you wouldn’t think of. We call it trash cans and grass. The biggest, the biggest way that our homes will get into trouble is if the owner just does not have the right systems to take care of it. The trash cans are left out too long. The grass is not taking care of the house. So like your home needs to be just as nice as it is, not nice. Cause you are, you’re doing something kind of, I want to say experimental. You’re doing something that’s probably a little out of the norm for that neighborhood, right?

[26:22] A little bit. So you want to make sure that you’re like absolutely doubling down on taking care of it. The second thing is it’s a, it’s a legal strategy and, and it’s not a get out of jail, free car in every situation. But when we first started developing this strategy, we reached out to some of the biggest companies, pad splits, some other companies that were doing this, that had 13 bedroom homes, 14, huge homes. I called the lawyer up and I said, how are you, how many times have you guys been shut down? It was like, we’ve never been shut down. I was like, that’s insane. How do you do it? And he walks me through the strategy and it’s, and again, I want to be very clear. I’m not a lawyer. I’m not like giving legal advice. I’ll just tell you what we do. So instead of leasing our home, so if you have your home in an LLC, you know, if you’re, if it’s an investment, it doesn’t matter who owns it, whoever owns it, you own it, or you put it in an LLC for, for liability protection, instead of leasing that home out to eight different individuals, you’re really just going to lease it to another company. So it’s technically a corporate rental. So it has one lease agreement on this home.

[27:10] Now in the United States, an LLC is considered one person. So if anybody were to ask me how many people I’m leasing my home to, I’d be like, oh, I’m leasing it to one person. And then that company that you lease it to is structured like, it’s structured like a club. It’s a member, it operates under, it’s like a membership based organization. And so it is, it’s maybe a fraternity club is a good example. Maybe a country club is a good example where people pay dues and they’re not actually technically permanent residents, but they get, they get all these benefits. Plus they get access to this house. And so this is called the membership agreement structure. And it is the kind of legal strategy we’ve used in a lot of areas to, to circumnavigate, so to speak, this like number of unrelated people that are permanent residents. And that’s kind of a key word to this too, that are permanent residents in this home. And so that’s worked, that’s worked very successfully. It’s what all the big companies are doing. It’s just a different strategy and how to do it. There’s been a bunch of lawsuits about it in Atlanta. That’s probably the place where it’s actually been

[28:06] tested the most and they’ve won every time. There’s a whole nother like bigger and pad splits totally leading the legal charge. I mean, they put tons of money into the, and the whole idea is like, is it really constitutional to let 50 cousins live in a house? But as soon as one, one person’s not related, that person can’t like, is that really constitutional to discriminate based on familial status? And that’s the whole argument they want to go to the Supreme Court with eventually to just like get rid of this. But the truth is, and the truth is this, it’s not heavily being enforced, except in certain cities. And we’re seeing widespread adoption of co-living once a city understands what it is. Great example of this is literally the governor of Colorado just came out and said, he just signed a bill into law, he signed a bill into law. He said, it is illegal for any local municipality to regulate the number of people at home. And so every municipality, every city, every, every county, he basically blew it out the window, created a state law that just made it completely may open the door wide open for co-living. So there’s still a little bit.

[29:05] So the third, the third key is like, you need to know the co-living friendliness of that city. And we, so we’ll call, we’ll do this on behalf of our students. We’ll call zoning and be like, look, are you guys actively following these rules? Are you shutting them down? What’s your appetite for co-living? What are you guys doing for affordable housing? And we’ll figure all of that out. There’s a few Sarasota has come out actively and declared war. Nashville, Tennessee of all places has like been like, we hate co-living. We don’t want it in here, but it’s, it’s starting. It’s trendy, but it’s trendy because it’s work. You’re, you’re, every city is trying to increase density. Every major city is trying to increase density because that provides more for about it. We’re doing that without anything else. We’re just snapping our fingers, increasing density. So it works and it’s without subsidies. So you got me on my high horse on that, but I get passionate about it. We’ve found some battles over it for sure.

[29:49] Makes a ton of sense. Um, and I never would have thought about familial status, um, and the number of people related people living together. Um, and that, that is obviously like, there’s a very good argument there. So that’s very fascinating. Um, as, as most agents know, that’s a fair housing law and can’t discriminate against people, uh, for their fair housing. I’m not, I can’t remember if that one is national. Is that a national one or is that, I know it’s definitely something we deal with in Virginia, but, um, I think it’s national. The, the, the non-discrimination for, for familial status. Yeah. Yeah. Specifically. Well, it, it all depends on how you, it’s not national. Uh, no, I mean, fair housing, fair housing does not exactly explicitly state what is a family. And so that’s also like part of what’s like under communication. We look at like the federal definition of what’s a family. It’s basically like, if you guys act like a family or a fan, like that’s literally how they define it so loosely, but then these states and these little cities, they define it much more.

[30:48] They’ve defined it based on unrelated people. Um, so there, there is some conflict between like the local laws and the federal laws and how it, how it goes about. It’s just, it’s, it’s a little, it’s a little wonky right now in terms of, so you got to kind of know how the city takes it. Sure. Um, but I’m pretty sure fair housing doesn’t specifically explicitly state for no status. No, that’s fascinating. Yeah. I mean that, yeah, that’s, I mean, there’s the, the, the housing affordability is such a big issue. Um, and I mean, that is obviously providing a need. Um, it is trying to provide that, uh, service to people. Obviously you’ve, you’ve, you set up a system that is, is, you know, trying to do that in the best possible way for people to give them an affordable place to, to stay. So, um, I would hope, you know, people more and more people would understand. Um, and, and then, and then on the flip side, you know, if, if, uh, to have, we, we can all talk about idealisms and, and think about like, you know, a pine in the sky, this is what would be great to have. But at the end of the day, like if there isn’t a financial model for it to make sense, um,

[31:47] it’s going to have to be government subsidized, right? Like, I mean, so like if we’re wanting to have more density, but it costs tons of money to develop and there’s tons of roadblocks to do so, um, it’s just, if it’s not viable financially, it’s not going to happen unless it’s subsidized by the government. And I think this is a, like you said, like, it’s a really good, um, way to, to, tap into that need. Um, and it’d be a win-win for, for everybody involved. And really that’s the way business works, right? It has to be a win-win for everybody. And I want the agents that are listening to this to understand that this is, it’s not destroying neighborhoods. I mean, you’re not putting this in a plus neighborhoods. You’re not putting a minus neighborhoods. You’re putting this in a neighborhood that you drive into and someone’s grass, literally we look for this, like someone’s grass a little bit long, good color of a neighborhood.

[32:30] Like someone’s got a work truck in their front yard. Like someone, someone sent me a video the other day and they’re like, Sam, I think it’s a great color of a neighborhood. Some guy’s got goats in his front yard. I was like, okay, maybe we went too far the other way, but like we’re putting these in like B neighborhoods where it fits. And as long as you check the box of there is enough parking for this house. And if it doesn’t have that, then don’t do it. Cause now you are going to have neighbors. Yeah. But you know, parking around the back of the home or a place where you can add a little gravel pad or the homes are a little further apart, or there’s plenty of street parking. We teach everybody to check that box and we check the box. You can almost not know that this home is a cold. Like you really wouldn’t, they’re not party houses. They’re 10 times better than putting an Airbnb in any neighborhood. I’ll tell you that not only because they add more housing, but because like nobody throws parties in these homes, literally in 15 years of doing this, thousands of tenants members, we call them members, not tenants, thousands of members.

[33:18] I think I’ve had one party that we had to shut down one and it wasn’t even really a big party. It was just like the other people in the home were complaining to this guy, like four people over. That was like, that’s as worse as it gets. They’re not easy. They’re actually really good. Cause people are calling this home, you know? And so I think that’s a, it’s a difference. Uh, and why I think it’s easily, I’m not throwing these in and all of a sudden we’re ruining neighborhoods and all this stuff, which is, we get accused of that a ton. It’s like, no, this is a beautiful place for people to live. That is very, very nice and calm and quiet and safe. Yeah. Yeah. That’s cool. How many, how many couples run out a room? Sorry. I interrupted you. I’ll jump in then. How many, how many rooms rented out by couples? We only, we only started allowing that probably six months ago and we only allowed, if there’s like a private entrance, if it’s a room with a private entrance, a private bath and the home has the parking to handle it. But otherwise we don’t, we don’t, it’s only one person per room. Okay. Okay. Yeah. Yeah. No, I was actually going to jump

[34:09] back a little bit. Um, because, and this is back to you living in Columbia and I was, I wanted to hear your experience of working in kind of when you’re, how should I say this? When you’re kind of, um, in work mode and you’re doing more of like the hustle culture of the states and whatever that looks like for you, for your work, what is that like for you to sort of engage in that culture? And then once you’re done with work and you’re sort of hanging out and you’re doing the living personal part in Columbia, which you had described as much more laid back and low key. And I just, what that, if there is tension there with that or what that relationship is like for you? Yeah, that’s a good question. I’m still figuring it out. I’ll be honest because the hustle culture is still like ingrained in my soul. So even in Columbia, I have to like, if you see my office, I got my office, I got my sound patty. I got my monitor. You know, I’m, I’m looking like I’m, I’m going to, I’m going to, I’m a gringo, uh, working in Columbia, you know, it’s kind of what people say, but ultimately, yeah. You know what? I feel the biggest difference

[35:09] is it’s a beautiful question. And I feel the biggest difference is just like the expectations of the people around me here. Nobody asks me ever how much money, nobody asked me what car I drive. Nobody cares. Like I, you just can tell like here, nobody cares. They want to hang out and have fun. And so that might be hiking. That might be eating a, eating a meal with everybody on a Thursday night. Um, and that was just not my life in the States. It was just not. And part of that was me. I, you know, I’ve thought about it now. I’ve thought about, I probably could have created that in the States. For whatever reason, it was just harder for me to do. I didn’t have a ton of like really close. I didn’t have, I have more close friends here in six months than I have in like six years back in the States. And it surprises me. And I think it’s just a little bit more about that expectation of, of what people value here. So I think it comes down to what people value. And I think people value just different things in their life here. The other thing I’ve noticed is that people here have all, a lot of the, at least the foreigners that are here, they’ve kind of come here after a

[36:06] life transition. It’s just very common. You know, either they’re going through a separation, maybe a divorce, maybe some, maybe, maybe somebody died and they’re just like, I need to, I need to like, I’m gonna change my life. And that leads to a more open heart for people too. And so you can like connect with them on a deeper level. And it’s, so, you know, your first conversation could be something super deep, you know, less judgment, super deep. Yeah. Oh, please. That’s cool. I, I, you’re selling me. I’m like, we’re, I got three extra bedrooms. You guys can come back. Let’s do the co-living thing. Three months. We’re going to pack up. Hey, one, one little bonus is I, one little bonus is Medellin, Colombia has the fastest internet in the world. They have a startup here. They have a startup company that started that literally the fastest internet in the world. So we get some of the insane, we get the most fastest speeds of internet. If you do like online, you know, online stuff, you have to do broadcasting and stuff.

[36:56] So you need it. Yeah. Well, now you sold him. He’ll be there next week. We spread up the timeline. I am a nerd and I want to know the digits. Yeah, exactly. Exactly. Let’s do an internet speed test right now. Sam, while you pull that up,

[37:13] we can start transitioning into our, you know, our, our rapid fire questions, if you will. Yeah. I will. Yeah. Curious about what golden nuggets you have for our listeners. I think anybody interested in this space at all probably has gleaned a ton already from this episode, but curious what, uh, what you have for us. Yeah, man, I want to, I wanted to share, I have a few things here, but I can, I can share one or two or three of these, but the, the first one I want to share, and they’re all relating to co-living because I wanted to just kind of, that’s my message right now, what I’m trying to preach and share with the world. And, uh, I was super fortunate. I got to do a Ted talk two weeks ago and the whole Ted talk was not on like the money side, cause they didn’t really want me to talk about too much of the money side, but they said, talk about the social impact of co-living. And so one of the things I’m really trying to preach and I’m glad I had to do a lot of prep for the talk. And it really got me associated with a, the state of homelessness in our country, in America and, and, and the state of loneliness

[38:03] in our country. So just some quick stats. And I was kind of a golden nugget, but really it’s, it’s more of an inspirational golden nugget to get people to take action and why I want, why I want people investing. It’s like, forget the money for a second. Like, great. It’s, I believe it’s one of the highest cashflow things you can do in real estate right now for the average person. And at the end of the day, you know, the Harvard recently came out with a study and said, six out of 10 young adults suffer from what they call like technically serious loneliness. And you would never know what’s six, if there was 10 people on your church group or in your sports team, because they’re smiling, they’re saying I’m good, but they’re not good. You know, the, the, the effects, the surgeon general in America said that the effects of, of chronic loneliness is equal to smoking 15 cigarettes a day. That’s the health, mental, emotional effects.

[38:42] And so we have this society that we’re very connected through this, but we’re super disconnected. Another reason why I love Columbia to go back to your question, Erica, is like, there’s a little bit more of like in-person connection again, that call value system called culture, call it whatever, but it’s just more, it’s easier to have that in person. Everybody, it’s more expected. So, but in the States we have it very much connected on the phone. And so this co-living works because it’s solving two massive problems. You’re solving affordable housing. And in America, 750,000 people tonight will be homeless. That’s like one of the largest cities in America. If it was a city, like it’s huge, it’s crazy. And we’re solving loneliness. I just want people to know that that’s really my golden nugget is like, I think that more people should invest in cold living. Cause you can sleep your, you can put your head to bread. You can put your head to bed at rest every night and know, like I’m making a difference with my mind. And it’s not just about money. It’s great money, but it’s not just about money. I think that’s really cool. So that’d be one thing I’d want to share.

[39:33] I love it. Yeah, no, it’s a, it’s definitely awesome. And I, and we, we, I interviewed a person that was into the sober living houses that was their specific niche was, which is similar. Um, but you know, obviously there’s about extra things that go into running a facility like that. And, um, yeah, I mean, it is cool that you can, you can have a, a why, uh, above and beyond. And I think right now, if you’re just, just invented investing in the, uh, a regular rental market, you’re going to be faced with, um, the realities of, it’s just tough to cashflow. And you, you have like a hot water heater, go out or whatever. And then you wipe out a year plus of your, your cashflow. And like, you’re not trying to like, you know, extort anybody, but you do need to get a good amount of rent to make the numbers work. And otherwise what’s the point? So that’s right.

[40:24] It’s awesome how that is a great win-win. Um, what about a favorite book? One that you think is fundamental, uh, that everybody should read or one that you’re currently, uh, enjoying? Yeah, I’m going to go, I’m going to go more on, more on Erica’s expertise for the, for the book. Um, it was, uh, there’s a book that I read a few years back called loving. What is by a lady named Byron Katie. And it’s really not a real estate book. It’s not a money book. It’s not any of that at all. Um, it’s, it’s a book about just challenging, challenging, painful thoughts that you have in your mind. And it, it’s been, and so it’s really like a four question, little formula that you ask when you come up against the thought and it does apply to business. Cause when your staff member throws out a belief and says, Oh, we can’t do that because of this. It’s like four questions. Like, is it true?

[41:06] Can you absolutely know that it’s true? Are we still assuming at some level, what would happen if you just couldn’t have that thought anymore? Like, let’s just like, who would you be? What would happen? And then the fourth, the fourth part is, uh, to turn it around to something opposite. So you might say like, we can’t do this with you literally just flip it around to the opposite. Like we can do this like as simple as basic as that is. And so it’s been a book I read and I reread and I started applying it. And there’s like, she literally calls it the work and you do this thing. And it’s just been a really powerful, probably one of the most powerful tools that I’ve used in my life. I probably use it every single day. And now I’ve trained my brain on it so much, you know, all, all, whether it’s business or something, my personal be like, Oh, this, this can’t happen.

[41:44] I’ll be like immediately. My brain goes, is that really true? Is it really true? Like, ah, maybe it’s not. And then at least it gives me the opportunity to pause. Um, so, so I’m really, I’m really passionate about that work that I’ve done, which is highly recommended for people. I love it. I love that. I would argue that that is applicable to anybody. And most of the people that we talked to on this podcast are entrepreneurs who are going out there, at least in the very beginning, doing this on their own. And I’m, I know I would say almost everybody has had pretty challenging thoughts about like very similar to what you’re talking about too. Can I do this? Is this really worth it? Can I provide for my family? Am I crazy?

[42:22] Everyone else thinks I’m crazy. Yes. And then it works. Usually you have to grind for a while first, right? Before you see success. And even when you see success, there’s hard times. Yeah. Yeah. Well said. Well said. Sam, do you, do you have those internet speeds?

[42:38] I’m looking at, I’m looking at 300 megabyte. I, you know, now that I’m questioning it, I’m questioning if I have this, this, this startup’s internet, but I’m still at 300 megabytes per second upload. So I’m pretty good. That’s pretty good. I’m pretty fast. I’m at, I’m at, I’m at almost 500 download and 300 upload. Awesome. Yeah, that’s good. I’m pretty dang fast. Sam, thank you so much for being on, on that show. It’s been a lot of fun talking to you. It’s been a lot of fun getting real and talking about what you’re passionate about in business. So thank you so much. Yeah. Thank you. Great to meet you both. Thanks for listening to the REI agent. If you enjoyed this episode, hit subscribe to catch new shows every week, visit REI agent.com for more content until next time, keep building the life you want. All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.