Experience or thoughts on Homeroom?

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Experience or thoughts on Homeroom?

Eric Inigo
Member since 2020 · 9 posts · 6 votes

Hello Everyone,

New to BP and real estate investing. Wondering if anyone has had any experience with https://livehomeroom.com ? If so, what was your experience like?  They bring co-living to the Midwest and currently focused on Dallas, Austin, and Kansas City. They find homes, sell it to the investors, set up a lease with them with a set cash flow, and then lease rooms on behalf of their investors (100% turnkey during the lease, and free property management. Of course, repairs would come out of my pocket. It's an interesting model and considering it. Would love to hear your thoughts and experience, if any, with them. Thanks in advance!

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Account Closed
Member since 2018 · 1 post · 8 votes
5y

Hi all, I'm a recent HomeRoom investor and want to chime in here to share my experience. I was interested in investing in the Austin area but obviously the market is really competitive and rents haven't gone up in line with the skyrocketing purchase prices so the numbers just weren't working. I was beginning to lose hope but then I connected with Johnny at HomeRoom and was immediately impressed. Although, to be honest, at first I thought it sounded a little too good to be true... totally passive investing? Guaranteed rent? I figured I would give it a shot and I'm really glad I did! The agent they connected me to was one of the best I've worked with - he knew exactly what HomeRoom was looking for and quickly found me a property that worked for them and for me. The house needed some work which normally would have been a pain for me but after close HomeRoom did everything. They acted so quickly the house was fixed up and I had tenants within 30 days of closing without ever having to talk to a contractor. Amazing! If you're considering HomeRoom I recommend you just reach out and have a call with them to see if it meets your needs. I'll definitely use them again in the future and I've recommended them to several friends. Good luck!

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  • Toks Akindele
    Member since 2019 · 25 posts · 18 votes
    5y

    I don't think this is a strategically good investment for the Landlord (Investor). Looks like this Company is generating cashflow from the margin on the leases and it is doing that with hardly any Capital investment and no risk on Repairs. The landlord makes the Capital investment and owns the repair risk but gets lower rent than if he had done it alone. The only benefit a landlord gets is guaranteed rent based on lease term....but note the landlord can create that too by signing the lease directly with renter. Not a good deal...you retain too much risk and CAPEX for little benefit

    4Reply
  • Richard Helppie-SchmiederPro Member
    Flipper/Rehabber · DFW · Member since 2020 · 374 posts · 208 votes
    5y

    @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.

    4Reply
  • Kim Tucker
    Flipper/Rehabber · Kansas City, MO · Member since 2011 · 2k+ posts · 712 votes
    5y

    @Eric Inigo

    Seems an interesting way to set up a rental. Multiple "roommate" tenants all on separate leases that average out to a higher rent than market rate.

    If one renter goes, you have the rest of the renters still paying.

    And at least here in KC, he says that his tenants are young professionals with good jobs. That he has very little vacancy or non paying TENANTS

    So a good rental model it seems.

    But I can't speak to hiring someone to buy and manage the property for you.

    1Reply
  • Kim Tucker
    Flipper/Rehabber · Kansas City, MO · Member since 2011 · 2k+ posts · 712 votes
    5y

    @Kim Tucker

    Follow up. My son rented rooms in properties like this a lot when he lived in LA and Vegas. He was new in town, culd not afford nice all on his own, needed a roommate and this type of real pairs people up.

    And when I was a new young professional myself in Colorado, there was an entire apartment community built around this concept that was all brand new top of the line with all the amenities, something I could not afford on my own.

    More properties using this concept would help in areas wit out a lot of affordable rentals.

    2Reply
  • Ryan Fox
    Member since 2019 · 27 posts · 7 votes
    5y

    They are basically using rental arbitrage and the investor is the landlord

    Article here on BP discusses how this is a win-win for everyone. Obviously it's a bigger win for them but it depends on what your goals are. If you are an OOS investor who sees the value in buy-and-hold this could be very much worth it.

    Here's the link to the article Rental Arbitrage

    2Reply
  • Jeffrey Donis
    Investor · Durham, NC · Member since 2020 · 1k+ posts · 691 votes
    5y

    @Eric Inigo I haven't heard of them. I agree with. @Ryan Fox it's important to make sure you understand the pros and cons of rental arbitrage to see if it meets your personal investment and financial goals. 

    I'd ask to speak with previous investors and see what their experience was like. 

    Good luck!

    2Reply
  • Stephen Brown
    Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    5y

    Hello Eric. There are many teams across the midwest that do this business. I would ask the company to provide you with their buyer's contact information and see what they say. You also don't need to start off with straight turnkey companies, there are companies that will help you find properties on the MLS, fix them up and rent them out.

    0Reply
  • Mina Shirey
    Member since 2021 · 4 posts · 2 votes
    5y

    Just found this thread on a BP search, as I am also evaluating Homeroom. @Eric Inigo did you end up going through with a deal with them? Curious to hear your thoughts. 

    1Reply
  • Josiah Jenison
    New to Real Estate · Valencia, CA · Member since 2016 · 11 posts · 15 votes
    5y

    Some good points on here. While it's true that you could do what HomeRoom does yourself, it would take a lot of time, effort and a moderate level of market by market expertise, especially if you're an out of state investor like me. I live in California so buying investment property here is pretty much out of the question right now. I have researched HomeRoom and talked with the founder Johnny a lot. The reason I am planning to invest with HomeRoom is the upside / value for the OOS investor like me. From what I can tell, they have the same/similar returns as turnkey, with a higher tenant class in better neighborhoods and almost no stresses of management. They can pay you market rents because of the co-living (renting room by room) approach. This yields upwards of 70% more than market. Of course, it may not make sense for all investors, but for an OOS investor like me who's looking for truly passive investments (or close to it) it seems like a win-win. Just my 2 cents. I'll be happy to share more from my actual experience once I get my first property with them.

    6Reply
  • Matt Silk
    Member since 2021 · 1 post · 1 vote
    5y

    I am in a similar scenario as @Josiah Jenison as an SFH investor in the Austin area. I stopped buying in March 2020 as we didn't know how the pandemic would play out. Since then I can't pencil out any entry level SFH investments as rents are going to take a few years to catch up with the insane appreciation. Great problem for my existing portfolio, horrible problem for my chosen strategy.

    I love SFH and was looking for ways to still play as the "easy answer" of moving to a new city where I have zero competitive advantage or scale feels like a much larger undertaking. Thus, I started looking into vacation rental and co-living platforms to see if I could get the same level of comfort building a portfolio of properties in various cities. I am looking at vacation homes and co-living as just different flavors of SFH. So, a company like HomeRoom will replace my agent and property mgmt solution that I use today and allow me to more comfortably expand into various cities without building the infrastructure on my own dime.

    So far I have been very impressed with Johnny and HomeRoom and actively trying to figure out where/when I will pull the trigger. Anyone tried their competitors?

    1Reply
  • Vikram Singh
    Investor · Sacramento, CA · Member since 2017 · 58 posts · 27 votes
    5y

    Also looking into HomeRoom and other people's experience. Very interested in their model primarily for the "guaranteed rent" and 3 year lease too.. Seems to eliminate the risk in trying to find tenants yourself and making sure they all pay. Especially now with the eviction moratoriums and less hope of being able to collect or evict tenants when you are relying on 1 family to pay the rent or not in your property. Their model of having 5-6 tenants and even if one or 2 of the rooms is vacant or behind you still get most of the rent seems safer..

    1Reply
  • Sujith Bhaskaran
    Member since 2021 · 2 posts · 2 votes
    5y

    A novice question ... will the value of the property decrease if Homeroom do the modifications to accommodate more bedrooms and convert living area to bedroom? 

    Any first hand experience with Home Room? 

    @Josiah Jenison did you end up investing with them? 

    0Reply
  • David Park
    Member since 2018 · 3 posts · 5 votes
    5y

    I invested with Home Room recently and purchased a property in the Kansas City, MO area. I think this is a strategic way for people who live in expensive markets to enter into better cash-flowing markets with stronger guarantees and property management than most. Johnny Wolff, the CEO is very hands on and his team provide a lot of great support. One great strength is that their contractor is in-house and has been doing the same work across various homes so they have their construction well together.

    My experience with them has been great and I am considering shifting some of my weaker performing investments over to them. If you are in an expensive market and looking to leverage better markets, increase revenue and trustworthy property management with additional benefits (regular house cleaner, counselor to manage relationships among tenants, etc) then this is a great option for you.

    5Reply
  • Josiah Jenison
    New to Real Estate · Valencia, CA · Member since 2016 · 11 posts · 15 votes
    5y

    @Sujith Bhaskaran - I have not invested yet with HomeRoom so I can't specifically speak to their renovation process but with my general experience in real estate, adding a bedroom almost always increases your property value, not decreases it.

    @David Park - thanks for sharing. It's good to hear a positive first hand experience. 

    2Reply
  • Account Closed
    Member since 2018 · 1 post · 8 votes
    5y

    Hi all, I'm a recent HomeRoom investor and want to chime in here to share my experience. I was interested in investing in the Austin area but obviously the market is really competitive and rents haven't gone up in line with the skyrocketing purchase prices so the numbers just weren't working. I was beginning to lose hope but then I connected with Johnny at HomeRoom and was immediately impressed. Although, to be honest, at first I thought it sounded a little too good to be true... totally passive investing? Guaranteed rent? I figured I would give it a shot and I'm really glad I did! The agent they connected me to was one of the best I've worked with - he knew exactly what HomeRoom was looking for and quickly found me a property that worked for them and for me. The house needed some work which normally would have been a pain for me but after close HomeRoom did everything. They acted so quickly the house was fixed up and I had tenants within 30 days of closing without ever having to talk to a contractor. Amazing! If you're considering HomeRoom I recommend you just reach out and have a call with them to see if it meets your needs. I'll definitely use them again in the future and I've recommended them to several friends. Good luck!

    8Reply
  • Stephen Stokes
    Rental Property Investor · Austin, TX · Member since 2016 · 317 posts · 257 votes
    5y

    @Tye Ripma can you post some figures so we can see?

    2Reply
  • Jessica Ponder
    Member since 2021 · 29 posts · 10 votes
    5y

    @Stephen Brown Hi you mentioned that many teams and companies can help find the properties, fix them up and rent them out. Do you have any names of companies or suggestions on how to go about searching for one? Thank you

    1Reply
  • Jourdan Hoapili
    Member since 2021 · 1 post · 0 votes
    5y

    Following for answers to the above two questions. 

    0Reply
  • Stone Zhou
    Member since 2021 · 3 posts · 1 vote
    5y

    Curious to hear more about livehomeroom and who its competitors are (I couldn't find any). Thank you.

    1Reply
  • Jason G.Pro Member
    Rental Property Investor · Long Island, NY · Member since 2015 · 434 posts · 495 votes
    5y

    I had just seen an ad for them pop up on Instagram. It sounds like a very interesting way of investing and I would love to see someone that has used them do a detailed post on their entire experience with them, especially someone that has been using them for a long period of time. My biggest concern looking at their website is that their example results on their website show properties from Kansas City, Forth Worth, and Austin with purchase prices of 236k-411k. I currently have five properties in the Atlanta metro area and I'm picking up one in Cleveland. The reason I shifted out of Atlanta to begin with was because the properties are now moving above 200k and the numbers are beginning not to work. I couldn't imagine spending 411k on a SFH at this point unless I was living in it. I want properties to be worth that and higher years after buying them under 200k, not as an initial starting point.

    1Reply
  • Monica Lee
    Los Angeles, CA · Member since 2016 · 4 posts · 2 votes
    4y

    I just talked to Homeroom and was a little concerned that they want 75% of renovation/rehab costs up front.  Does anyone have any opinions about this?  Are they trustworthy?

    2Reply
  • Fred Bowie
    Member since 2021 · 2 posts · 0 votes
    4y

    I just seen an ad for this company. So I reached out to this company. Anybody here used them before.
    They want 100K dollars up front. Are they trustworthy? 

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    @Eric Inigo,welcome to BiggerPockets, you are definitely in the right place. Just make sure to consume contents here as much as possible and feel free to ask any questions you may have. We are here to help each other grow.

    Goodluck

    [email protected]832-776-9582Podcast Guest on Show #469
    NETWORTH BUILDERS5236 Reviews
    WebsiteView Page
    0Reply
  • Johnny Wolff
    Investor · Kansas City, MO · Member since 2019 · 130 posts · 118 votes
    4y

    Hi folks,

    I'm Johnny the CEO of HomeRoom.  Wanted to chime in and answer some questions from this thread in one place

    1. @Fred Bowie - we don't ask for $100K upfront (we actually don't ask for any $ upfront).  The $100K is the amount we ask investors to be prepared to pay out of pocket for downpayment + rehab + coliving upgrades.  The dollars for the light renovations would be the only money you'd pay to us directly.
    2. @Monica Lee - we transitioned to 75% upfront because when we did 50% (more standard) we realized that HomeRoom was fronting money for a portion of repairs and labor on behalf of the owners.  After talking to our advisors we agreed 75% was a good compromise.  We deliver premium work to our owners.  The properties look gorgeous  - and we have yet to have an owner that was dissatisfied with the final product.
          6Reply
        1. D Lenser
          Member since 2021 · 4 posts · 7 votes
          4y

          @Eric Inigo we've been investing in Homeroom for a few years now. We bought our first house with them in 2019. It's been a very good experience. We don't have to hassle with collecting rent or scheduling repairs etc. All that is done for us and we get to collect the check! Because they rent by the room, it grows the rental pie vs if we rented it out as a single family home. They take a piece of the extra rental income and we get a piece. It's a win-win. Even through COVID we've not had vacancy. 

          hope our experience helps you evaluate

          2Reply
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