\n<\/p>\n
Three years ago, Andres Martinez<\/strong> was waiting tables. Today, he owns 10 <\/strong>rental properties<\/strong><\/a>, manages another four, and has a rental portfolio that brings in over $13,000 in monthly <\/strong>cash flow<\/strong><\/a>. He\u2019s even been able to quit his job and focus on his rentals full-time<\/strong>. But how did he pull all of this off\u2014and in such little time?<\/p>\n Early on, Andres had one goal: maximize the cash flow on every property he bought<\/strong>. This led him to co-living<\/strong><\/a>, an investing strategy<\/strong><\/a> where you have multiple tenants under the same roof<\/strong>. The cash flow was so<\/em> strong that he has deployed this strategy across his entire portfolio.<\/p>\n But the journey hasn\u2019t been easy. In today\u2019s episode, Andres shares all the growing pains\u2014from making 200 cold calls a day to find off-market deals<\/strong> to working with shady contractors and navigating difficult tenant disputes.<\/p>\n Through it all, his pure hustle and grit have paid off. Whether you\u2019re looking for creative ways to scale your real estate portfolio<\/strong><\/a> or create enough cash flow to replace your salary<\/strong>, Andres has a blueprint that works\u2014even here in 2026!<\/p>\n Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Andres: Henry: Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n
Three years ago, Andres Martinez was waiting tables. Today, he owns 10 rental properties, manages another four, and has a rental portfolio that brings in over $13,000 in monthly cashflow. He\u2019s even been able to quit his job and focus on his rentals full-time. So how\u2019d he pull all this off starting in 2024? Early on, Andres had one goal, maximize the cashflow on every property he bought. This led him to co-living, a strategy where you have multiple tenants living under the same roof. The cashflow was so strong that he deployed this strategy across his entire portfolio, but the journey hasn\u2019t been easy. In today\u2019s episode, Andres shares all the growing pains from making 200 cold calls a day to find off-market deals, to working with shady contractors and navigating difficult tenant disputes. Through it all, his pure hustle and grit have paid off. Whether you\u2019re looking for creative ways to scale your portfolio or create enough cashflow to replace your salary, Andres has the blueprint that works even here in 2026.
What\u2019s going on everybody? I am Henry Washington. And today on the BiggerPockets Podcast, we\u2019re bringing you an investor story with Andres Martinez from Dallas, Texas. Let\u2019s jump right in. Mr. Andres Martinez, welcome to the BiggerPockets Podcast. How you<\/p>\n
Doing, Henry? Thanks so much for having me.<\/p>\n
Glad to have you, man. Excited for you to be here. Now, I understand you\u2019ve been on the rookie podcast before, but for those who haven\u2019t heard your story, why don\u2019t you give us a little bit of your background and how you first got into real estate?<\/p>\n
I\u2019ve been doing real estate since January 2023. I was working full-time as a waiter. I went to college for music. I studied jazz, as you can tell from my<\/p>\n
Albums<\/p>\n
Here. That did not go well. I realized a starving artist. I was working as a full-time in a restaurant business. And then I started making pretty good money as a waiter, honestly. I was very close to the six figures on the years. And then I got married and my wife is like, \u201cYou need to buy a house.\u201d Perfect. We need to buy a house. And then even though I was reporting all my income because it was cash, we couldn\u2019t really qualify for the house that we wanted. This is the time where the interest rates are just starting to go high. So we missed the three or 4%, but now there are seven<\/p>\n
And a half. Oh, so this was like 2023, late 2023. Late<\/p>\n
2023, exactly. November, December. And we missed it because we couldn\u2019t find the right lender. So now when we find the lender in December, he\u2019s like, \u201cWell, sorry, now it\u2019s 7%.\u201d<\/p>\n
Oh, wow. So<\/p>\n
I was like, \u201cOkay, how do you buy a house without a mortgage?\u201d So I fell into the rabbit hole of creative finance. I jump into there. I didn\u2019t know what wholesaling was back then. I just started making calls. I found my first deal in two weeks, take my wife to see the house. She\u2019s like, \u201cAbsolutely not.\u201d So I was like, \u201cOkay.\u201d So I told her agent, \u201cLook, it didn\u2019t work for us. Thank you.\u201d So now I was part of a real estate mastermind. So I go to our local meetup and I told the guys like, \u201cYeah, I found this deal. I just didn\u2019t know what to do with it.\u201d And this guy\u2019s like, \u201cWhy don\u2019t you wholesale it?\u201d I said, \u201cWhat do you mean?\u201d He was like, \u201cYou can make money just by flipping the contract.\u201d And I was like, \u201cTeach me.\u201d So we call the agent again on that same meetup, called the agent.
I was like, \u201cWe\u2019ll see the property again tomorrow.\u201d We go, he runs the numbers and he\u2019s like, \u201cThis is a good deal, man. We can make some money here.\u201d He get under contract and he showed me how to flip that paper. And I was like, \u201cWe just make $10,000 in a few phone calls?\u201d
At that time when I was doing the waiter stuff, I was flipping furniture online. I was trying to start any type of side hustle, flipping phones, washers, dryers, clothing on eBay, anything I could get my hands off, make money. But I never really thought I could make money on real estate because I don\u2019t come from a family with money. I\u2019m an immigrant. I\u2019ve been here since I was 18 only. So when that happened and I was like, okay, this is it. I saw Dr. Strange and the Marvel movies.This is the one. And I went straight ahead, started calling nonstop.<\/p>\n
Okay. So you said you found that first deal in two weeks that you ended up eventually wholesaling. How\u2019d you find that deal? Just calling agents on the MLS? Calling<\/p>\n
Agents on the MLS. Wow. Imagine three days into real estate. Yeah, do you want to do seller finance or sub two? No, I getting 500 calls every day. I was like, okay. And then eventually this girl\u2019s like, \u201cYeah, we had this property on a contract with somebody else, but they couldn\u2019t perform. Do you want to come see it?\u201d And she sends me the terms, she sends me the mortgage sheet. I got lucky. After<\/p>\n
500,<\/p>\n
600 calls, somebody say yes.<\/p>\n
You called 500 to 600 people?<\/p>\n
Every single listing on Zillow.<\/p>\n
Folks, if you are listening right now, that is absolutely not luck. That is hard work paying off. Yes, that seems like a long shot. Sure. But if you sit down and you put effort in and you call 600 people determined to get a deal, you\u2019re probably going to get a deal. And that goes for almost anyone. If you are in a market and you call the right list and you have that much dedication, you\u2019re going to stumble across a deal. So no, that\u2019s not luck. I call that positioning. You put yourself in the position to be ready to capitalize on a deal. You got paid to get an education in how to do a wholesale deal. So how long did it take you to land your<\/p>\n
Next one? Nine<\/p>\n
Months. Nine months. I didn\u2019t<\/p>\n
Know that you can pull lists of low equity or seller finance. I was just calling every single listing.<\/p>\n
So<\/p>\n
Now I\u2019m pulling lists. I\u2019m making calls. I\u2019m getting better at sales. I\u2019m getting better at my pitch. Nothing, nothing, nothing, nothing, nothing, nothing. Nine months later, it was a very humbling lesson because I was about to give up. Actually, I had given up two weeks prior to that because we went to the doctor with my wife and we found out she was having some health leisure. So I need a lot of money. I was about to sell the house. All my savings were about to go there. No more wholesaling. Because at this point, these nine months, I got fired from my job twice because every time a seller calls me back on a Friday night, instead of having fajitas on my hand, I have my phone.<\/p>\n
And a<\/p>\n
Manager\u2019s yelling at me. I was like, \u201cHold on. If this is the 10K call, I\u2019m about to walk out. This is my real proof of concept.\u201d It never happened. So we\u2019re driving back from the doctor\u2019s appointment and I\u2019m just like, \u201cOkay.\u201d I tried. I tried. I made two, 300 calls every day manually and somebody pick up the phone. It didn\u2019t work. I really did my best. I didn\u2019t take days off Monday to Sunday. It\u2019s not for me. And then on that drive home, I get a text message back. \u201cHey, Andres, this is Andre. You called me a few months ago. You explained to me about the seller financing and you were right. The person who got me in their contract for this price, they couldn\u2019t close. Can you help me out? Because now I already moved out of the house and I am behind one month of the payments.
And I\u2019m a human person and we got under contract and that was my first wholesale assignment fee of $10,000. A week later, I got another message back. Hey, do you still want to buy this house? And then the cycle of wholesaling, you need to build a pipeline. The pilot came back to me. So<\/p>\n
I<\/p>\n
Started making money now.<\/p>\n
This is how direct-to-seller marketing typically works for anything, whether you\u2019re going to wholesale it, whether you\u2019re going to keep them for yourself. When you\u2019re doing direct-to-seller marketing, sometimes what you\u2019re doing is you\u2019re starting to roll that snowball, right? Because you\u2019re putting in effort and people are saying no, but you\u2019re also giving them the idea that working with you or your creative strategy or even the idea to think about selling is just now popped in their head because they weren\u2019t thinking about it before until you called. And so they said no, maybe because they didn\u2019t understand it, maybe because it wasn\u2019t the right time. But once you plant that seed, it starts to grow. And then at some point they may decide, oh, let me call Andreas. He called. He said he could do this. Now I\u2019m in the right space. So you got to get the snowball started.
And where people fail with direct to sell and marketing is they quit before their snowball gets big enough to start producing results for them. And so they say it doesn\u2019t work and they\u2019re done. And then they miss their opportunity because maybe somebody else starts marketing in the meantime to that same list. And then those leads that they started to foster end up going to somebody else, man. So that\u2019s super cool. So you\u2019re wholesaling, your proof of concept worked, then you start popping off $10,000 checks, $7,000 checks, $9,000 checks. So it\u2019s working. What did you move into after that?<\/p>\n
When I got it started, even before real estate, the reason I was doing the side hustles is because I\u2019ve always wanted to achieve the point that I achieve now where I have enough cash flow. I don\u2019t have to leave my house. I leave my house right now once or twice a month. I don\u2019t pick up the phone for anybody except if it\u2019s an emergency for my tenants because now I have AI running everything. That level of freedom for somebody like me who had to start working at 14, who has always, depending on somebody else, I wanted to flavor that. And once I did, I realized I really like it and I don\u2019t want to go back to being on the hustle. A lot of people think because I hustle hard, it\u2019s because I have the alpha type. I want to be the big CEO. I want to make the billion dollars.
I am very okay making my 20, 30K a month passive income, working maybe 20, 30 hours a month. Not having to talk to anybody on the phone. I don\u2019t have to talk to sellers. I don\u2019t have to talk to agents. But the transition was, it\u2019s very interesting. So going back to the beginning, on that deal with the real estate investor, we went to the home and he\u2019s like, \u201cOkay, I will make this work, but I need to put 10 rooms.\u201d I was like, \u201cAbsolutely not. You\u2019re not going to raise money for that. You\u2019re going to borrow from somebody money. You\u2019re going to steal it. Then you\u2019re going to walk away.\u201d<\/p>\n
No,<\/p>\n
I pass on that deal, but I got me thinking, hold on, maybe there\u2019s something here I don\u2019t know about room rentals. And I\u2019m already part of a mastermind, so I start talking with people, \u201cHave you heard of this?\u201d I was like, \u201cOh yeah, I\u2019ve heard about this. I have that. Yeah. This, this and that.\u201d I was like, \u201cHoly shit, look, okay, that\u2019s it. That\u2019s the end goal, cashflow.\u201d<\/p>\n
So I have several more questions about how you transitioned from this, but I want to get into those right after this break. All right, we are back on the BiggerPockets podcast with investor Andreas Martinez. Andres started off wholesaling, did several wholesale deals, made good money, and then decided, you know what? I\u2019m not going to do that anymore because I want to try this co-living thing. So you started to research, you learned about co-living. Did that deal that you were trying to wholesale become your first co-living property or did you end up wholesaling that?<\/p>\n
No. That same meetup that I went where I made my first wholesale deal for $500, it happens every Saturday of the first month. I was on the way there and I got a call from my boss because I\u2019m still working at the restaurant. I was like, \u201cI need you.\u201d And I was like, it was like January 2nd, brand new year. I woke up early, I shave a workout. I was like, \u201cI\u2019m going to go meet a lot of people. This is my year. And I miss a meetup.\u201d And I get a text message from another guy that I was kind of coaching, teaching how to do wholesale. He was like, \u201cHey, this agent was walking around the meetup.\u201d And this is a creative finance meetup, full of creative finance investors. He was describing this property, these five rooms, three bedrooms, and the seller is in pre-foreclosure and he doesn\u2019t really want to make a lot of money.
He just wants to help the seller. But nobody else pay attention to it. And I automatically, nobody pay attention because they don\u2019t know co-living. Text the agent, I was like, \u201cI\u2019ll call you as soon as I get out of work.\u201d I was supposed to get out at four. I didn\u2019t get out until 110. I gave him a call. He was like, \u201cI was waiting for your call.\u201d I was like, \u201cCan we jump on a Zoom?\u201d Saturday at 11:30 at night, we\u2019re on a call for an hour. The next morning, we\u2019re meeting at the property with the seller before I go to work. Property under contract. $3,000 down. I got a 2019 house, corner lot, five bedrooms, three bathrooms, ready to go for co-living.<\/p>\n
And so you essentially take over payments on this property and you convert it to co-living. Did you have to add any bedrooms or did you just do it co-living as it sat?<\/p>\n
So I bring the deal to my mastermind to make sure that, even though I already knew it was a good deal, I just needed. I was about to put a lot of money in the conversion. It was about $40,000 to add three more rooms. We needed to redo the flooring because it was carpet. I needed to put now LVP paint. I don\u2019t know anything about construction yet. And the guy who\u2019s hosting the mastermind, he\u2019s like, \u201cAndres, do you want to sell me this?\u201d And I was like, \u201cOh, I really got a deal. I really got a deal.\u201d And he was like, \u201cThis works long-term rental, section eight, meantime rental, Airbnb, and you\u2019re going to go for the world strategical living.\u201d I was like, \u201cThat\u2019s what I want to try because it\u2019s in a great area. It has already five rooms, but I need to put three more to make maximum profit.\u201d And on that call, I was like, \u201cIt\u2019s going to be a lot of money, but I wish I could partner with somebody.
I don\u2019t have to use my money.\u201d<\/p>\n
So the money you were raising was the money for the renovation because you bought it sub two, but when you buy it sub two, that just gives you the money to buy it. If you\u2019re going to renovate it, that\u2019s got to come out of your pocket. You<\/p>\n
Need the renovation, you need the furniture, you need the refrigerators and stuff, holding costs.<\/p>\n
So about how much were you trying to raise to get all this done?<\/p>\n
58,000. And on that Zoom chat, somebody text me. He was like, \u201cHey, Andres, we have money. Can we partner?\u201d I was like, \u201cOkay, let\u2019s talk about it. You bring all the money. I\u2019ll bring everything else. I\u2019ll manage it and then we\u2019ll go from there.\u201d We go under contract, we close, we start renovations. My contractors end up stealing a lot of money, no performing. I lost at that point because it was my responsibility, $40,000 out of my pocket to rebuy all the flooring. Oh, boy. The guys who were doing the work at the house, she never paid them. So they were trying to come back and to destroy the bathrooms that they had built. I had to stay at the property. Oh<\/p>\n
My goodness.<\/p>\n
Heart attack after heart attack. I was going to Home Depot in the morning, doing the renovation myself at the end, going back to work all day, double shift because now I needed money. Everything that I went from home selling was kind of gone.<\/p>\n
Going<\/p>\n
Back at night. Anyways, we went live on March 1st. I was fooled in two weeks.<\/p>\n
Oh my goodness. And how much were you renting each bedroom for? At<\/p>\n
The beginning, it was between eight and 850. The private bathroom was for $1,000. So the total income was somewhere around 6,500.<\/p>\n
$6,500 a month. And what was your mortgage taxes insurance?<\/p>\n
2,100.<\/p>\n
Oh my goodness. After<\/p>\n
Expenses and everything, the net was at the beginning, somewhere around 27, 2,800.<\/p>\n
Yeah, man, that\u2019s a phenomenal cash flowing deal. What area of the country or what city are these deals being done in?<\/p>\n
Mainly Fort Worth, Texas. Now I\u2019m in DFW, but at that point I started mainly in Fort Worth, Texas.<\/p>\n
So what did the next deal look like and how long did it take you to get that? Well,<\/p>\n
I was finished the renovation. I contacted everybody that I knew. I need help. I end to meet this investor who already had another property coming up. And he was like, \u201cHey, since you know how to operate, you can get the properties, you can find the tenants, let\u2019s partner up.\u201d Because I\u2019m already partners with a contractor. And I was like, \u201cOkay, perfect. That\u2019s the second property.\u201d We jump into it. Turns out the contractor ends up scamming him and scamming me. Boy.<\/p>\n
Oh for two on contractors. The<\/p>\n
Main guy who was working for the contractor ends up renting a room in the second house.
So I\u2019m walking through the house. I was like, \u201cHey bro, you\u2019re still missing trim here and there and there.\u201d Eventually three days later, I was like, \u201cHey, rent is due.\u201d And then he explodes like, \u201cYou haven\u2019t paid my boss. She says you haven\u2019t paid her for a month.That\u2019s why she doesn\u2019t have money, blah, blah, blah.\u201d And I showed him the receipts like, \u201cWe already pay her.\u201d She was gone. So he was like, \u201cI don\u2019t have money.\u201d And I was like, \u201cOkay, let\u2019s get to work.\u201d And then I started just asking people, \u201cDo you need a contractor?\u201d He did a good job. And he\u2019s the main guy.<\/p>\n
Find<\/p>\n
Him a job, find a second one. I was like, \u201cOkay, can you find bigger houses?\u201d I was like, \u201cYeah, let me keep buying them.\u201d So now I was doing my food renovation. I learned a lot of construction there because he\u2019s been doing construction for 20 years. So we started doing more co-living for me, co-living for other investors, working with code enforcement, learning how to do permits. Now I had an already under contract that was a fix and flip. We did the flip, we did another flip. I bought another co-living. So now instead of doing the wholesaling, now the contractor gig took up. And if you ask me between being a contractor and a wholesaler, I would say being the contractor.<\/p>\n
So that first co-living deal, you had a partner because the partner gave you the money for the renovation, the furniture, and then you guys were fifty fifty. Second deal was a different investor than who you were partnered with before? Yes,<\/p>\n
It was a different investor. He already wanted to invest in co-living, but he was missing the operations because operations is very heavy in co-living. So it was the same deal, fifty fifty. But he was like, since you are messing up on the contractor stuff, let me bring my partner because she\u2019s the contractor and then the whole thing. Got it.<\/p>\n
So that ended up being a debacle from the contractor side. But it sounds like you were still able to get the house fixed up. And then were you able to get that one rented out? And how many bedrooms were in that one?<\/p>\n
That one was eight bedrooms with an ADU in the back. And<\/p>\n
You were renting the rooms in that one for about how much? A little<\/p>\n
Bit less, between 750 and 800.<\/p>\n
So give us the breakdown on that. What was your mortgage, taxes, insurance, and what were you bringing in a month?<\/p>\n
Gross income was around 64, 6,500 as well. Pretty similar because we didn\u2019t have the ADU fully functional yet. That would\u2019ve been an extra thousand.<\/p>\n
Wow. We<\/p>\n
Would kill it. PITI on that one was like 2,300, but we had a HELOC that we also took on second position because the star had a HILOC. So it was like an extra 300. But the net was still around the same, 22, 2300 at that time.<\/p>\n
Yes. That\u2019s super cool. You were finding the people who either have the deals or can find the deals, and you bring the operations and the experience. And then you\u2019re typically fifty fifty in those deals. So either somebody brings the money or the deal, you bring the operations, the experience, and then you fifty fifty. But it sounds like you realized after two failed renovation projects with contractors running off with some money that you were like, \u201cThis is a gap that I need to fill.\u201d So tell me about that. Did you go out and hire guys that you keep in-house or do you have just other GCs that you work with that mainly only work for you? What does that structure look like?<\/p>\n
So what I realized at that point was this contractor, she didn\u2019t know anything about a contractor. She just happened to find her main guy and his team was doing the stuff. So I was like, \u201cI can do the same. I can find the deals, I can find the houses. With the difference, I can work because I already finished my house. I did the flooring, I did the tile, I did drywall.\u201d I have a better understanding of that. So I was like, \u201cLook, if you help me learn this more, I can get you jobs.\u201d Because as a wholesaler, if I come with a contractor, at that point I was still thinking about wholesaling. It\u2019s a double win. So we started doing that.<\/p>\n
So this was the guy who was living in the place. You said he did good work. So you said, \u201cI\u2019ll be your new GC if you start working for me.\u201d And so you kept him busy. So now you\u2019re able to manage the renovation and then manage operating the property. So that\u2019s the value that you bring to the deal. And then somebody else either brings the deal or brings the money and then you fifty fifty on the co-living.<\/p>\n
Yes. So we did that one a month after I did one more because I still had the leads coming from wholesaling. So I bought one more house, I raised the money, I did my own construction. Usually contractors are telling six to eight weeks. I was able to do it in two weeks. And I started realizing, okay, all these people are just talking bullshit because they need to split their teams here and need to split their damn. If you keep a group in one house, framing takes one or two days. Drywall takes two more. Then you put the texture, it dries, it paints. That\u2019s done.Because the electrician can come in the morning, can come at nine, the AC. So it doesn\u2019t take unless you\u2019re doing plumbing, electrical course, all of that. So I started keeping the guys busy. I started making money there. Slowly fade away from wholesaling.<\/p>\n
So you\u2019re GCing for other investors either on flips or other co-living properties? Mainly<\/p>\n
Co-living. I\u2019ve done 29 now.<\/p>\n
That\u2019s really cool, man. I love to see that transition. So that\u2019s on the GC side. Would you mind just giving us a total breakdown of your portfolio as a whole to get an idea of what your business looks like?<\/p>\n
Yes. So I have right now 14 properties. I own 10 of them and I have four under management. On average, each one nets 1,900, 2,000 right now. All<\/p>\n
Right. So across that portfolio, Andreas, what is the net cashflow? What do you put in your pocket every month?<\/p>\n
So all the properties net around 26, 28,000 a month, depending on the vacancies and all of that. And I take 50% of that. So I take home myself 12 to $14,000 a month. Man,<\/p>\n
That\u2019s super cool. Congrats on building that. I do have some more questions because I know there\u2019s people listening who are very curious about co-living. So I\u2019d love to get some of your thoughts around best practices, things people should avoid if they\u2019re getting into this business. And also just thoughts around the management because it is a very management heavy business. Leases are a big thing and making sure all that\u2019s sorted out. And so I\u2019d like to dive into that, but first I want to take a quick break. All right, we are back on the BiggerPockets Podcast with investor Andreas Martinez, who started off in this business wholesaling, but transitioned into a niche called co-living. Now, co-living has been a buzzword for the past couple of years. It\u2019s really started to pick up steam. More people are getting into this space mostly because affordability of housing is tough, especially in larger metro areas where real estate prices are higher.
And so for people who are interested, what are some of the most important things they need to be thinking about when operating a co-living business? This<\/p>\n
Is not a passive strategy at all.<\/p>\n
You\u2019re<\/p>\n
Having the complexity of having multiple personalities living under one building. So everything that you\u2019re thinking right on your head that is a red flag, it is a red flag. But there are ways to go around it. There are ways to fix it. There are ways to manage it. So you need to develop a lot of systems to be able to run this because for people who are starting it out, if you\u2019ve never run a side hustle, if you\u2019ve never run a business on the side, if you\u2019ve never had that mentality, it could be overwhelming for you if you start growing your portfolio a lot. So just to start with one, start with two, give it a few months, see if you like it, and then decide to move forward.<\/p>\n
Okay. Let\u2019s play a game of myth busters because there\u2019s a lot of assumptions that people make with co-living. Myth number one or truth is that co-living\u2019s going to have high turnover. So you\u2019re going to have people moving in and out all the time, short leases. It<\/p>\n
Depends what type of business you want to run. If you allow somebody to come for three months in your house because they are on an internship or just because they\u2019re getting divorced, then yes, you\u2019re going to have turnovers. And this is what I try to explain to people when they come to my groups and want to learn about co-living. I am focused on co-living because of the affordability issue. I don\u2019t want to have people out of state coming here for a month or two. I am targeting the guy that works at the gas station, the lady that works down at the McDonald\u2019s. They don\u2019t make enough to rent their own studio, but they have a job here. They have their family here, and they want to be independent. So they come to my house. I always start on a month-to-month lease because in Texas, if I don\u2019t like them, I can let them go.
If they don\u2019t like me, we can just part ways amicably. And I always tell them that, look, it\u2019s a month, maybe two months, make sure you like it. And at that point, either you sign a 12-month lease or you\u2019re out.
So once you stabilize the property, you don\u2019t have turnovers. And it\u2019s 107 rooms that I have. It will be impossible for me to run all of these by myself with no BAs if I had high turnover. The problem of the weekly rental and all of that, imagine you have to move so many people<\/p>\n
Weekly.<\/p>\n
You need a big team. And every time you bring a personality into the house, like, oh my God, who\u2019s coming now? It\u2019s a big gamble.<\/p>\n
Given this method, do you find that you usually have people that stay there entire term and then re-lease up with you? I have<\/p>\n
Five people that I\u2019ve had since my first house. Actually, three of them on my first house just signed in January an order one-year lease.<\/p>\n
Oh man, that\u2019s really cool. You<\/p>\n
Have to think about it. And that\u2019s what I tell people. Why would they leave? They have the same job. They haven\u2019t gotten a pay raise. They are not going to college. They\u2019re not going to get a higher paying job. And they have not found a partner yet. And this is people between 25 and 35. We\u2019re not talking about elderly or any people disabled. The house runs well, the house is clean, the house is safe. They know that management is on top of everything. Why would they leave?<\/p>\n
All right. Myth number two or truth is that there\u2019s too many people issues and my phone is going to be going off all day long with tenants complaining about their housemates. Yes,<\/p>\n
If you don\u2019t know what you\u2019re doing. For example, a lot of people don\u2019t want to talk to them upfront. They want to have a message and auto approval ratings, like no background checks. If you allow that type of people in your house and then you get mad because they didn\u2019t wash the dishes, that\u2019s on you. You\u2019re a terrible operator, you\u2019re a terrible manager because you have to realize everybody comes from a different background. For this person, that means clean. If you rent the same house and you have somebody else who comes from a different background who they know what clean is and they come in and they see dishes all the time, I\u2019m out of here, bro. The model that we run is we are very upfront. Before they even come to see the house, there\u2019s eight people here. You\u2019re going to have to be extremely clean, especially in the bathrooms.
If you don\u2019t like it, just let me know, cancel the showing. And a lot of people do. And that\u2019s good. Go leave somewhere else. I want to have people here who need it in my houses. And when they come, they follow the rules. I really have almost no problems with dirty dishes or people fighting in the house or that they don\u2019t take the trash. It\u2019s all about pre-screening, man. It\u2019s every landlord\u2019s secret is pre-screening. We<\/p>\n
As landlords have to stop putting off our failures on our tenants. Our job as landlords, no matter what type of landlord, is to be great at tenant selection. The better we are at tenant selection, the more profitable that we\u2019re going to be. All right, here\u2019s one that you may not have had to experience yet, but it is one that people think about. When going to sell a property, do you have to un-renovate and put it back in its original condition? You<\/p>\n
Can sell it as a co-libian to another investor. But you heard me say, I bought a five bedroom house and I added three rooms. That\u2019s only two by fours on drywall that can be taken out in one day. Maybe going to cost me three to 4,000 to report a house and put it back to normal. Now I can resell my property to the normal world. I don\u2019t have to wait for a Collibian investor to come and buy this house because if you\u2019re buying a house that is already renovated, if the investment was so good, why are you selling? On top of that, an appraiser walks into the house and they don\u2019t see a living room. They\u2019re like, \u201cWhat is this? How do I compete?\u201d So there are very few lenders who will help you finance a ready converted co-libian. But as an investor, I want to keep my options open.
The<\/p>\n
Other myth slash truth is parking is going to be an issue. Everybody\u2019s going to fight over parking spots. The neighbors are going to complain because there\u2019s cars on the street.<\/p>\n
Yes, that\u2019s true.<\/p>\n
And how do we deal with it? My first<\/p>\n
House, my neighbor, he wanted to call the city on me. He was very mad that we were going to rent. And I was like, \u201cI have my own parking in my corner lot, bro. And all my houses are either corner lot. I have parking in my backyard. So there is absolutely no reason why my tenants would park against their houses. In fact, it is in my lease. If you own to any more houses, we have parking pictures there where they\u2019re supposed to park. I check the cameras once a week at the beginning. Once the tenants are on their behavior like, okay, we only park in our house. They stick to it. So I don\u2019t have parking issues after that. But it\u2019s true. If I didn\u2019t buy the right house with parking, I will be struggling. All right,<\/p>\n
Andreas, thank you so much for playing that game. I know a lot of people have similar questions. There\u2019s probably even more questions. So if you\u2019re listening and you\u2019ve got questions, drop a comment below and maybe we can help you get some answers to those questions. Or check out the BiggerPockets forums and make a post in there and there will be tons of investors who can help you with some of these ideas. Andreas, is there a way people can find you if they want to learn more about co-living or just learn more about you in general?<\/p>\n
Yes. My name is Andres Martinez, REI on YouTube and Instagram. I have a lot of free content on YouTube. So for people who are curious and want to hear more about the actual Colibean, you can go in there. If you want to message me, you can find me on Instagram, Andres Martinez REI. And also I have a school group now that is free to join. We meet once a week and I hold two or three hour calls for people to come ask me because my inbox is full of the same questions over and over and over. And it\u2019s not that I don\u2019t want to answer, but I don\u2019t have time. So if you want to get free game, I host a call once a week, come in, ask me. I\u2019m live for two or three hours. And then after that, go home.<\/p>\n
Awesome. Thank you so much, Andreas. Thank you for sharing your journey. Thank you for the lessons and being open and honest with us. And thank you so much to the BiggerPockets community for listening. We\u2019ll see everybody on the next episode of BiggerPockets. Thanks<\/p>\n<\/div>\n