All Forum Posts by: Miller McSwain

Hey! I actually just wrote the book for BiggerPockets on the Co-Living (room rental) strategy. It comes out in April and you can sign up for it here: https://CoLivingBook.com
Also, I see you are in Fort Collins, I'm in Colorado Springs!

As for PMs in Birmingham, I don't know any. If you shoot me a DM, I do know of one investor that is doing Co-Living in Birmingham (I think). I could connect you two!

 Co-Living (renting by room) is definitely a great strategy in Colorado. We have 6 Co-Living properties that we purchased with partners in Colorado Springs.

In particular, Colorado recently removed occupancy limits, statewide, allowing many unrelated people to live together in a single family house. We usually see ~$2,000/month in cash flow (~16% cash on cash).

Feel free to reach out with any questions!

The 2 best ones I know of are:
- House Hacker Mafia (https://www.meetup.com/house-hacker-mafia-real-estate-invest...)
- Colorado Springs REIA (https://www.meetup.com/colorado-springs-real-estate-investor...)

Hope to see you at one of them!

Hey @John Friendas

I have purchased 4 of my Co-Living (rent by room) properties with DSCR, 1 of them within the last few months.

Not that I necessarily recommend this, but there are short-term-rental DSCR products. From my understanding, as long as you intend on doing a STR when you close, there are no rules against changing your strategy after closing, especially if you find that something else is more profitable.

So in our case, the lender determined an STR would bring in ~$3500/month (with all of their conservative factors), but now that we operate it as a huge 3300 sqft Co-Living property, it actually brings in $7000/month. MUCHHHH better and of course that leaves us with plenty of room to pay the mortgage payment so the lender is happy.

Btw, I just wrote the Co-Living book for BP that comes out in Spring, you can sign up for it here! CoLivingBook.com

@Sara Capra
If you you are considering rent by the room (like @Dan Guenther mentioned) and have questions, let me know! I just wrote the book on Co-Living for BP which comes out in the Spring. Always happy to chat about the strategy!

Long story short, it makes a lot of income (2-3x long-term rental income) when done right! Definitely a lot more management than a long-term rental though.

Also, I live in Colorado Springs 😉

 Thanks for the shoutout!

I have 6 Co-Living properties (41 rooms) in Colorado Springs.

Insurance:
I've been seeing insurance companies start to offer Co-Living specific products that are very expensive (2x-3x normal cost). If you have a good insurance broker, you should be able to use a more standard policy though. My broker shopped around and found 3 companies that allowed us to add Co-Living clauses (SafeCo, Auto Owners, and Travelers). So the premium is still the same cost as usual and we are covered.

Refinance:
I've only had 1 experience so far with an appraiser coming to the property after a Co-Living remodel. In that case, she comp'd it assuming it didn't have the extra bedrooms and then just gave us a $3k boost for each room we built (2). I don't think this is normal though. I've heard of either:
1. Taking the doors off of the rooms when the appraiser comes so that they aren't rooms. Instead they are "flex spaces" or "offices".
2. Tearing down any rooms that are a little wonky before the appraisal.

For example, I bought a HUGE (3300 sqft) 3 bed house. I turned it into a 7 bed house.
2 of the new rooms are super useful to an end buyer and would bring us to a total of 5 (which would comp very well). If we decide to refi in 3-5 years, though, we may time a couple of the leases to end at the same time and spend ~$6k to tear 2 rooms down and rebuild them. Totally not efficient, but its something we may have to do. If it allows us to pull $100k+ of equity out, then it was well worth it though.

Does anyone know of any active wholesalers in Colorado Springs? I'd love to get in touch with them!

🚀Thanks!!!

 Thanks for having me Chris! I always love providing value to the front range investors!!!!

Some rent-by-room managment tips we implemented that make things SO much easier:
1. Replace bedroom knobs and front door knob with electonic locks. This way we can easily set new pins for new tenants, don't have to call locksmiths, can create pins for handymen/cleaners, etc
2. Hire a house cleaner to clean shared spaces (we do this monthly). Although we have good tenants, some clean more than others. Having a cleaner just prevents some of potential issues from occuring between roommates.
3. Provide shared supplies. We supply anything that is shared (toilet paper for shared bathrooms, trash bags, dish soap, etc) so that tenants don't have to worry about whose turn it is to purchase supplies.

The best free skip trace service I've found is truepeoplesearch.com
You have to manually enter each address though, so if you are looking to gather data on a large list, then you probably want to use a paid service. The paid service I've used is leadsherpa.com

True People should get you started for free though!