Co-Living (rent by the room) BRRRR

[Jake Baker]

I recently purchased a property in Jacksonville, FL, and plan to execute a BRRRR strategy with a coliving model (renting by the room). The property is in a B-class neighborhood, and while I'm comfortable managing coliving setups, I'm curious about any potential nuances around refinancing and insurance for this type of property.

Are there specific loan types or lending policies I should know when refinancing a rent-by-the-room property?

Do lenders or appraisers treat properties with coliving setups differently?

Are there any insurance policies or providers you recommend for this unique use case?

I would love to hear from anyone with experience navigating these aspects of a coliving BRRRR strategy!

[Max Ferguson]

@Miller McSwain is a great resource for the topic, he would be happy to talk to you! I know he has gotten creative on the lending side for products used to get the properties. 

I have no clue on insurance, but appraisers should treat the property different if you plan to add a few more rooms. As you know bedrooms are worth more to appraisers than an extra living room. Calling the appraiser to see what you can do to push it up a "C-Level" would be smart before doing any reno also, might only need a few things to make it far more valuable in the eyes of the bank.

I've heard of a tactic for figuring out demand, which is to put up a dummy or coming soon listing on facebook marketplace and see the amount of activity you get on it. 

Good luck and keep us updated!