All Forum Posts by: Johnny Wolff

Quote from @Frank Salgado:

Johnny I would like to thank you for your response, just knowing that complaints get addressed and try to get resolved make me feel better about my investment.

Hi @Frank Salgado

Appreciate the kind feedback. The team and I are working around the clock to continuously improve the experience for both our tenants and our owners. When you've housed thousands of people things do go wrong, but looking at those challenging occurrences, learning from them, and improving, is something we're committed to.

Thanks again, and if you have any questions or issues please feel free to reach out directly.

This is Johnny, I'm the CEO and Founder of HomeRoom. I'm happy to hear that you're interested in purchasing a second property!

I look at every single review on here to make sure our owners feel like we are living up to the expectations we set in the beginning.

In general, HomeRoom owners are happy owners. I know that from the dozens of positive posts on here and from talking to owners regularly. When someone is less than satisfied, my team and I use it as a learning opportunity in order to improve the experience of all owners.

For example, we no longer offer used refrigerators, because we are now able to provide quality new refrigerators with a year-warranty for a similar price. Some of this is just due to scale and the fact that we can now demand better pricing from our vendors.

I've reached out several times and would love the opportunity to connect and learn more about how we can improve your experience and that of other owners.

 -Johnny

Hi @Rodolfo Scarborough,

I'm Johnny, CEO of HomeRoom. I just recently saw this post and wanted to say that on behalf of HomeRoom, we're sorry you didn't have a better experience during your stay with us. As the founder of HomeRoom, I can't even tell you how many days and nights I've spent trying to develop the optimal experience for our roommates. HomeRoom roommates are the people who allow me and my team to show up to work every day and without our roommates, we wouldn't be able to keep the lights on.

Indeed, keeping the lights on is a big job, given that we are responsible for the well-being of over 1,600 roommates on a daily basis!

We get this right far, far more than we fall short.

In regards to your review, I dug into particulars and of course, there are three sides to every story. It seems like there were missed opportunities where we could have done better here. Without diminishing your experience, perhaps we all could have been more solution-oriented. Roommate living is exponentially more complex than living alone, and for it to be a success, everyone needs to be on the same team.

One thing I've learned from doing this roommate living thing for over 6 years is that not everyone is right for this type of living experience. That's no one's fault. But the sooner we recognize that the better it is for everyone involved. It's why I empower the HomeRoom team to offer a cash-for-keys program (at no cost to owners) that helps roommates who are not fit for roommate living to transition to an alternative living arrangement that's better for them.

I'd like to make it known here that in this instance we offered cash-for-keys three different times, and the offer was repeatedly turned down.

I wish you had a better experience at HomeRoom and I truly wish you the best of luck in the future.

-Johnny

Hi @Drew Sygit

Sounds like a tough situation for both you and your investor.

Over the last few years, HomeRoom has housed thousands of roommates in our homes and used that time/experience to fine-tune our approach when dealing with cities and neighbors.

City interactions are quite rare and we are typically able to work through them. That being said each city has different approaches to this type of thing - so, yes, we are aware of cities that are not as friendly to roommate housing and avoid them for that reason. Same with HOAs. We avoid HOA neighborhoods for our properties.

Happy to discuss more specifics of our approach there if helpful. It took a while to get right - but we've had consistent success using a mix of research, mindfulness towards our neighbors/neighborhoods, conversations with cities, legal discussions, and as a worse case fallback is converting the home back to a single-family property and where we offer to manage it for a discounted price since it is a tough situation for all involved (this is very rare).

Hope that answers your questions/concerns - let me know if I can provide any additional info as well.

Quote from @Drew Sygit:

@Johnny Wolff how does your company confirm that local zoning ordinances allow boarding houses?

 Hi Drew!  Roommate properties are not boarding houses so those zoning ordinances don't apply here.  Let me know if you have any additional questions.

Quote from @Brad Helmink:

Quote from @Brad Helmink:

Oh, also, I used the BP projected rent calculators on a few new properties they've sent me, and their estimate was quite a bit higher so be careful there. I don't know where they get their numbers and I asked my rep and he said they do their own data analysis...so make sure and do your own research on the numbers they provide.

I should have clarified on this part that I was referring to the SFH's they sent me not the room rental model. The SFH that I checked on the calculator was about $500 off IIRC.

Thanks @Johnny Wolff any help you can provide to get the place rented would be awesome. We have had zero interest so far.

Yes - I've engaged with the team on solutions for your property.  We have dozens of leads, but none of them match the quality we're looking for, for your home.  Rest assured we're working actively to get this taken care of.

We're still just a few weeks in - patience is the name of the game in rent by the room.  We'll find a solution that gets you above market rents.

Quote from @Osazee Edebiri:

I think the constant discussion of California vs anywhere else is intriguing. So I pose a question. Hypothetical, if a person had a  2 million dollars to invest, they purchased property with 1 million in California and 1 million in any other state, which would perform better after 15 years and why? 

This assumes anything and everything will happen, which is the real life case anyway.  I am not automatically assuming California will perform better just because I live here in the Bay Area. I think someone may have interesting incite to why another state could out perform California property in the next 15 years.

 A very interesting question that I've been wrestling with recently.  I'm currently living in San Diego and deciding whether to buy here or buy elsewhere.

From a total ROI standpoint - I agree that CA wins (and I don't think its that close). Challenge is the cashflow won't be break even until the rents rise sufficiently - so you'll be getting hit consistently there. If you're cash rich and want to deploy capital and yield doesn't matter CA is the clear winner based on my modeling. But...who is so cash rich that they don't care about yield at all. Most people care at least a little bit.

Quote from @Brad Helmink:

Oh, also, I used the BP projected rent calculators on a few new properties they've sent me, and their estimate was quite a bit higher so be careful there. I don't know where they get their numbers and I asked my rep and he said they do their own data analysis...so make sure and do your own research on the numbers they provide.

 Hi Brad,

Johnny, HomeRoom CEO here. Yes - your rep was correct. We have built a database based on room prices from various roommate leasing sites. That database is quite large - and its ability to predict pricing is getting more fine-tuned and accurate every day. We also work internally to manually check the numbers we get from the model. That being said - this is a newer model - so it's definitely less predictable than standard SFR.

I'll ping my team to get adding marketing done for your house so we can get your property full for you ASAP.

Appreciate you buying with HomeRoom - we'll continue to work hard and creatively to provide you with the best returns possible, for your property.

Quote from @Richard Helppie-Schmieder:

Quote from @Jacky Lei:

Quote from @Richard Helppie-Schmieder:

@Eric Inigo I think their concept can be effective if there are enough people to fill their vacancy. As long as you are getting market rent or better and have great options to terminate contracts as needed in case they fill with bad tenants, poor management of your property, etc. it seems like a viable option for passive investing. You can most definitely make more by doing on your own, but their model of getting room mates together in a house who don't know each other seems like a management horror story to me. Do you have a specific property in mind that you own and are referring to for their services? Maybe I can add some insight if you do on the specific area and my investment strategy.

 Richard how I'm curious how you would do better as I have a hard time beating their rental rates since it seems renting out to 5 small parties brings in more cash than 1 party. Are you saying if you rehab and manage the property yourself and did what they did? To me as OOS investor, it's been hard to find properties that cash flow well

 Short-term rental would increase cash-flow for instance without the headaches. I have had the opportunity to manage properties with 5 random individuals that do no know each other, and it typically leads to disagreements in the house and people moving out early. Alot of times, the price point is at a point where the tenant pool is less than desierable. For me, I value my time and stress over a few hundred dollars a month in cash flow, because then I can focus on buying more rentals. I am sure it could work well in a student setting where everyone is attending a nearby university, but other than that, I don't think the juice is worth the squeeze.

Hi @Richard Helppie-Schmieder

Definitely agree - doing your own property management and renting by the room isn't for the faint of heart.  I did it myself for a number of years - good rents for sure but never easy.

We have found if you buy in the right areas you can have really high-quality people renting by the room though (our average credit score was >700 for a long time).

Do think short-term rentals are equally (or more) challenging in my experience.

Regardless of the model, I think it's a great call to offload the thinking and stress by partnering with an operator who does the heavy lifting.  I nearly always regret doing my own property management...its annoying to pay that $, but it's even more annoying when an AC goes out and you're using your lunch break to call every vendor in town with no luck.

-Johnny

Quote from @Brian Siu:

As an investor in HomeRoom, it has been a poor experience. Overall, I regret my decision to invest with them as there is too much risk to the investor (down payment, rehab costs, repairs, vacancy etc.)

Their model is based on taking single family homes and rehabbing them to expand the amount of bedrooms, from say 4 to 7, then renting each bedroom out separately, thereby increasing the available rent.

You pay for the construction costs, labor, and repairs.  In my example there were repairs needed and walls to be put in, smart tech, new locks etc.

Rehab cost = 45k

My PITI is $2000 @3.75% interest and estimated rental projection for 7 rooms was $3600 (~$520 per room). Homeroom has 2 payout models, on their revenue share model (85/15) takes 15%, so they estimated I would make $3000 or $1000 net gross per month. In addition, they charge each roommate $140 for utilities, maid service etc. Their guaranteed model was a 65/15 split with guaranteed payments of $2300 total per month.

As what happened with user JosephSpear, HomeRoom reduced the rents without telling me. Their projected is now $3385 gross and they have only been able to fill 5/7 rooms in 3 months, meaning I am barely breaking even, since 85% of 5 rooms (some rooms are lower rent) nets me around $2012.

Worse yet, they continue to on board new houses, currently there are 20+ houses in the Dallas market with open rooms. They have zero incentive to fill every room in a house.  To them 100 houses with 1 renter each is the same as 14 full houses in terms of profit.  In fact, it spreads out their risk to have more renters spread between multiple houses than concentrated in less houses.  Remember, HomeRoom profits off the individual renters, construction and fees.  Therefore it is in their best interest to grow as fast as possible at the detriment on investors.

 Even worse, if I want to back out, I now need to pay a contractor to remove 3 walls that homeroom installed along with the fees in breaking their lease. I am essentially stuck with this company with the hope that the rooms start to fill up.
So far, I'm down the rehab cost and barely breaking even on PITI. It may be several more months before it starts to turn a profit, with full rental room estimates ($3385 - 2000 PITI) it will take 3-4 years to break even on the rehab cost.

Hi @Brian Siu

This is Johnny Wolff, CEO and founder of HomeRoom. Thank you for your honest review. I am so sorry to hear that you are having a negative experience, and I really appreciate you bringing this to my attention. Your experience with HomeRoom is something that I (and the entire team) do not take lightly, and we are extremely disappointed to have let you down. Your feedback helps us do better. We are pushing hard to make this right for you, and are actively working to improve the situation promptly and accurately. I’ve messaged you directly to set up a 1-1 conversation so that I can address all of your concerns and let you know exactly what our team is doing right now to turn your experience into a positive one. Investor and tenant satisfaction is our number one priority, and we won’t stop till you’re a happy HomeRoom investor.

Sincerely,

Johnny