Padsplit insights please
New to Real Estate · Orlando, FL · Member since 2023 · 13 posts · 8 votes
Padsplit insights please
Most Popular Reply
Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes
2yI'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
37 Replies
- New to Real Estate · Orlando, FL · Member since 2023 · 13 posts · 8 votes3y
oops, I see there have been more posts...just so new to BP I missed them. Sorry about that
- Member since 2020 · 18 posts · 16 votes3y
@Heidi Thompson, I've worked at PadSplit for 4 years and would be happy to talk with you as well as connect you with some of my clients! Please send me a message with your contact info.
- Realtor · Greater Tampa Bay · Member since 2014 · 218 posts · 130 votes3y
I'm an agent in Tampa who helps investors look for these opportunities. The service fees end up being around 20.75% if you hire a "host" or property manager to make the investment as passive as a long term rental. Even with a 25% fee, you're cash flowing better than a long term rental, so the fee should not deter anyone! There are a lot of nuances with this type of investment, but between Padsplit, your GC, and an agent, they can guide you through your first couple successes.
- 3yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
You also have to check local ordinances to make sure they have no Boarding House limitations.
Logical Property Management4.9445 Reviews - Member since 2023 · 11 posts · 2 votes3y
@Heidi Thompson PadSplit is an amazing product!! I've been able to contribute to some amazing returns here in the Orlando market. Let me know if you would like to connect.
- Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes2y
I'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
- Member since 2022 · 405 posts · 455 votes2y
A PadSplit can be very heavy in CF but be careful if you are renovating a house and adding extra rooms. This can make it difficult to finance the property.
- Member since 2020 · 18 posts · 16 votes2y
@ke n
@Ke Nan Wang thank you for the post! I'm the most senior AE at PadSplit (joined in 2019) - I want to thank you for your interest and we would love to see you in our Host Community.
To hit on a few points you made - the first around "how long will this last until regulations catch on?" - We've been operating in Atlanta for over 5 years. We know working with policy makers is an important part of our growth and we actively are. We even had a seat at the table with former HUD Secretary Carson who issued a statement about the importance of co-living, please feel free to ask your AE for that declaration. We do have a long term strategy, we are ready for the uphill fight for common sense and justice.
Respectfully I'm going to disagree that a lot of homes look rough on the exterior, again your AE can provide you photos and Matterports with plenty of nice looking homes. The exterior appearance is incredibly important at PadSplit, we want our homes to look the best on the street.
On eviction - our rate is 3% which beats the national class C average by 50%. Additionally for hosts who opt for enhanced screening, the eviction rate is under 2%.
On refinancing and financing in general - we do have lenders that understand our model, again your AE can connect you.
Agree on getting host feedback - please join our Facebook group!
Thanks again, we are so excited for you to be a part of the Community, Doing Good and Doing Well.
- Member since 2020 · 18 posts · 16 votes2y
Quote from @Zachary Ware:
A PadSplit can be very heavy in CF but be careful if you are renovating a house and adding extra rooms. This can make it difficult to finance the property.
@Zachary Ware thanks for chiming in! We have worked with one of your teammates at Easy Street- he's a great guy! I do understand ESC isn't working with us currently, we hope to restart soon. That said, we do have several other lenders that we can connect interested parties with.
- Realtor · Melbourne, FL · Member since 2021 · 111 posts · 51 votes2y
@Oscar Guzman should be able to help you! He operates with padsplit also in the Orlando market!
- Member since 2023 · 3 posts · 3 votes2y
I'm a Padsplit host in Tampa with 2 properties on the platform. Their 14.75% fee seems high however considering they fill the property for you, manage the members and collect payments it's justifiable and you still cash flow over traditional renting. If your property is up to par you won't really have many maintenance calls except minor stuff such as plumbing clogs which is more likely to happen and requests to turn the AC up or down which you can do on your phone but other than that pretty hands off.
Vacancy depends on location and your Padsplit property score the more comfortable you make your property (mini fridges, tv's, outdoor area) the lower your vacancy rate but you can expect about 10% vacancy factor in a Padsplit friendly area (centrally located, easy access to public transportation). All rooms get punchcode locks, no key locks anywhere on site so members don't have access to lose keys or prevent anyone access.
I'm also a Padsplit financing vendor and I'm only mentioning this because this is what led me to being a host. I have refi'd some Padsplit hosts and I saw their platform was real and the expected cash flow. You should either buy with a DSCR up front if the property is eligible and self fund your rehab or hard money for acquisition, do most rehab to common areas with the exception of additional walls prior to refinancing into a long term DSCR loan. There is also a Florida property manager who will fund the reno for you if you buy using DSCR upfront with no additional property liens as long as he manages the property.- San Antonio, TX · Member since 2016 · 13 posts · 3 votes1yHey Christopher,
Quote from @Christopher White:
I'm a Padsplit host in Tampa with 2 properties on the platform. Their 14.75% fee seems high however considering they fill the property for you, manage the members and collect payments it's justifiable and you still cash flow over traditional renting. If your property is up to par you won't really have many maintenance calls except minor stuff such as plumbing clogs which is more likely to happen and requests to turn the AC up or down which you can do on your phone but other than that pretty hands off.
Vacancy depends on location and your Padsplit property score the more comfortable you make your property (mini fridges, tv's, outdoor area) the lower your vacancy rate but you can expect about 10% vacancy factor in a Padsplit friendly area (centrally located, easy access to public transportation). All rooms get punchcode locks, no key locks anywhere on site so members don't have access to lose keys or prevent anyone access.
I'm also a Padsplit financing vendor and I'm only mentioning this because this is what led me to being a host. I have refi'd some Padsplit hosts and I saw their platform was real and the expected cash flow. You should either buy with a DSCR up front if the property is eligible and self fund your rehab or hard money for acquisition, do most rehab to common areas with the exception of additional walls prior to refinancing into a long term DSCR loan. There is also a Florida property manager who will fund the reno for you if you buy using DSCR upfront with no additional property liens as long as he manages the property.
Why is buying with a DCSR up front a better idea? What are the advantages? Considering an investment in Austin...
- NH · Member since 2021 · 17 posts · 11 votes2y
@Ke Nan Wang - I would love more info on your development!
- Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes2y
Quote from @Martha M.:
@Ke Nan Wang - I would love more info on your development!
Let's connect and I'll keep you posted on the progress.
- Investor · Orange Park, FL · Member since 2019 · 171 posts · 108 votes2yGood heads up, Zachary!
Quote from @Zachary Ware:
A PadSplit can be very heavy in CF but be careful if you are renovating a house and adding extra rooms. This can make it difficult to finance the property.
Adding extra rooms for cash flow might seem like a no-brainer, but navigating the financing waters can indeed get choppy. It's like you're building a money-making machine with PadSplit, but the fine print in the financing realm can throw in a curveball.
Have you run into any specific challenges or surprises when it comes to financing after making these renovations? It'd be great to hear some real-world insights to help this group avoid potential pitfalls. What is the main hang-up with financing, when it comes to adding bedrooms?
Balancing the cash flow and the financing puzzle can be a tricky dance, but the more we share these experiences, the better we can navigate the twists and turns of real estate ventures. - Member since 2022 · 405 posts · 455 votes2y
Quote from @KC Pake:
Good heads up, Zachary!Quote from @Zachary Ware:
A PadSplit can be very heavy in CF but be careful if you are renovating a house and adding extra rooms. This can make it difficult to finance the property.
Adding extra rooms for cash flow might seem like a no-brainer, but navigating the financing waters can indeed get choppy. It's like you're building a money-making machine with PadSplit, but the fine print in the financing realm can throw in a curveball.
Have you run into any specific challenges or surprises when it comes to financing after making these renovations? It'd be great to hear some real-world insights to help this group avoid potential pitfalls. What is the main hang-up with financing, when it comes to adding bedrooms?
Balancing the cash flow and the financing puzzle can be a tricky dance, but the more we share these experiences, the better we can navigate the twists and turns of real estate ventures.Hi KC! I agree that they can be money-making machines. I worked on a property that made great cash flow but there were 6 bedrooms and 2 bathrooms. It was originally a 3/2 and had 3 additional bathrooms added. The appraiser determined the property had functional obsolesce, making it something that not many lenders would want to finance. It creates a problem when selling the property as no one who wanted to live in the house would buy it, and your buyer pool for this property would be majority investors.
- Real Estate Agent · Alpharetta, GA · Member since 2017 · 85 posts · 30 votes2y
Quote from @Blake Lewis:
@Heidi Thompson, I've worked at PadSplit for 4 years and would be happy to talk with you as well as connect you with some of my clients! Please send me a message with your contact info.
Blake is awesome, priceless resource in the PadSplit world.
- 2yMark MunsonBusiness MemberLender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
We are vendors with PadSplit and in Orlando, so happy to help if I can. @Blake Lewis can help you out and give you some options. I know many successful investors that utilize it and some have higher-end properties in areas like Maitland. I'd suggest attending any local PadSplit events if you can. Feel free to reach out if you need any advice.
- Property Manager · Kissimmee, FL · Member since 2019 · 445 posts · 266 votes2y
Quote from @Mark Munson:
We are vendors with PadSplit and in Orlando, so happy to help if I can. @Blake Lewis can help you out and give you some options. I know many successful investors that utilize it and some have higher-end properties in areas like Maitland. I'd suggest attending any local PadSplit events if you can. Feel free to reach out if you need any advice.
Following. Would love to learn about any local Orlando events.
- Member since 2023 · 35 posts · 0 votes2y
How’s this process going?
Quote from @Ke Nan Wang:
Quote from @Martha M.:
@Ke Nan Wang - I would love more info on your development!
Let's connect and I'll keep you posted on the progress.
- Developer · Miami, FL · Member since 2019 · 24 posts · 21 votes2y
Quote from @Michael Gangemi:
@Heidi Thompson PadSplit is an amazing product!! I've been able to contribute to some amazing returns here in the Orlando market. Let me know if you would like to connect.
Looking to venture into my first PadSplit, would like to pick your brain!
- Member since 2024 · 3 posts · 1 vote1yI though the benefit of having this membership structure was to cancel the subscription (eviction) without have the traditional lengthy process. Why do this instead of separate leases? If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?
Quote from @Ke Nan Wang:
I'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
- Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes1y
Quote from @Joshua Darville:
I though the benefit of having this membership structure was to cancel the subscription (eviction) without have the traditional lengthy process. Why do this instead of separate leases? If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?Quote from @Ke Nan Wang:
I'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
Each jurisdiction has its own laws but I know from a padsplit operator's testimony in Jacksonville Florida that she had to go through the eviction process.
In our county, boarding house limitation is for lease 1 week or longer and that's another reason why padsplit it's operating on a week by week lease.
- Member since 2024 · 3 posts · 1 vote1y
Quote from @Ke Nan Wang:
Quote from @Joshua Darville:
I though the benefit of having this membership structure was to cancel the subscription (eviction) without have the traditional lengthy process. Why do this instead of separate leases? If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?Quote from @Ke Nan Wang:
I'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
Each jurisdiction has its own laws but I know from a padsplit operator's testimony in Jacksonville Florida that she had to go through the eviction process.
In our county, boarding house limitation is for lease 1 week or longer and that's another reason why padsplit it's operating on a week by week lease.
Thanks for the fast response. I have also seen leases with weekly collection schedules. Does the monthly verbiage in a traditional lease need to be updated to reflect the weekly collection? (e.g., leaving notice becomes X and non-renewal notice becomes Y instead of 60 days)
- Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes1y
Quote from @Joshua Darville:
Quote from @Ke Nan Wang:
Quote from @Joshua Darville:
I though the benefit of having this membership structure was to cancel the subscription (eviction) without have the traditional lengthy process. Why do this instead of separate leases? If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?Quote from @Ke Nan Wang:
I'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
Each jurisdiction has its own laws but I know from a padsplit operator's testimony in Jacksonville Florida that she had to go through the eviction process.
In our county, boarding house limitation is for lease 1 week or longer and that's another reason why padsplit it's operating on a week by week lease.
Thanks for the fast response. I have also seen leases with weekly collection schedules. Does the monthly verbiage in a traditional lease need to be updated to reflect the weekly collection? (e.g., leaving notice becomes X and non-renewal notice becomes Y instead of 60 days)
I’m not qualified to give you any advise but that’s what we do. Lease automatically renew week to week and need 15 day notice to terminate.
haven’t running into issues. Oh btw we don’t use PadSplit. We place our own tenants and save 15%. Once the tenants are placed PadSplit aren’t really offer that much value to justify the 15% expenses.
I can see if you are someone doing this at a scale then let PadSplit handle the marketing. But we are only a handful properties and it’s completely doable to do your own tenant placement. - Member since 2022 · 3 posts · 0 votes1y
Quote from @Ke Nan Wang:
Quote from @Joshua Darville:
Quote from @Ke Nan Wang:
Quote from @Joshua Darville:
I though the benefit of having this membership structure was to cancel the subscription (eviction) without have the traditional lengthy process. Why do this instead of separate leases? If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?Quote from @Ke Nan Wang:
I'm new to Padsplit as well and I don't own one yet and looking into develop my own.
I have attended plenty Padsplit events and talked to my Account Executive (AE) and some veterans from Padsplit (the real expert, not newer sales person), and some Padsplit investors who own them and love them.
To answer your questions quickly first:
1. Padsplit is simply a technology platform. View it as Airbnb. So the 14.75% (15%) is just their cut. If you hire a PM, usually from what I'm hearing, Padsplit PM charges about 8% and some just charge a $800 per month flat fee because it's relatively easy I guess. Keep in mind it's still new so the industry is trying to figure it out.
2. Yes it's recommended you put keylocks on each bedroom.
3. Padsplit gather tons of data so you can ask your AE to provide the Orlando market data to you so you can make a relevant decision.
Now we got your questions out of the way, here are my thoughts so far:
1. Hearing from many testimonials by talking to real Padsplit owners in person, it seems to be a true cashflow machine coming from a single family residence. One of the concerns would be, how long would this last until regulations catch on? Padsplit's answer is that no politician will attach the affordable housing industry because this is the only private solution to solve the housing crisis now. Obviously they are running against the zoning policies, always feel like doing something in the gray. Is it a stable long term strategy? I'm skeptical but I'm willing to test the water to something small first. My thought would be, if the city is okay with letting owners doing padsplit, why not just letting them rezone the property to multifamilies and build a multifamily apartment, which is a more legitimate solution.
2. Most padsplit properties give me the opposite impression of what an airbnb properties give you. They look rough on the exterior and most of them are located in the class C neighborhood. Needs to be in a rental area because no homeowner neighborhood would like to have tons of renters going in and out of a property. So for sure it's a cashflow play, but don't expect much on the appreciation side. It's probably something that rides on top of the inflation but not very likely to double or triple your initial investment opportunities for sure. I think it's a great strategy to replace the BRRRR strategy for entry level investors who need number of cash flowing property to replace their 9 to 5s.
3. Eviction experience is still similar to your SFR experience. Still have to pay attorney and fight it through court. Padsplit people try to sell you that it's only a small portion of your income (1 out of the 6-8 members) vs if you do long term, you are losing 1 of 1 income.
4. Refinancing game is tricky. They recommend owners to refinance it as a normal house (4 bed 2 bath). After inspection/appraisal is done, then you do the Padsplit conversion.
5. Just be aware of there are many Padsplit salesperson or Padsplit affiliate businesses that would love to grow rich out of Padsplit owners. So owners should talk more to owners to get real feedback.
6. I'm piloting a new construction program that's building a generational style home 6 bedroom 4 bathroom, 2500 sq ft house in a class B/C area. Our goal is to design/build a house that can legitimately be a big SFR or a Padsplit property. Number makes sense on paper but let's see how we perform at the beginning of next year.
Each jurisdiction has its own laws but I know from a padsplit operator's testimony in Jacksonville Florida that she had to go through the eviction process.
In our county, boarding house limitation is for lease 1 week or longer and that's another reason why padsplit it's operating on a week by week lease.
Thanks for the fast response. I have also seen leases with weekly collection schedules. Does the monthly verbiage in a traditional lease need to be updated to reflect the weekly collection? (e.g., leaving notice becomes X and non-renewal notice becomes Y instead of 60 days)
I’m not qualified to give you any advise but that’s what we do. Lease automatically renew week to week and need 15 day notice to terminate.
haven’t running into issues. Oh btw we don’t use PadSplit. We place our own tenants and save 15%. Once the tenants are placed PadSplit aren’t really offer that much value to justify the 15% expenses.
I can see if you are someone doing this at a scale then let PadSplit handle the marketing. But we are only a handful properties and it’s completely doable to do your own tenant placement.
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