Could co-living investments be the secret to rapid financial freedom? In this episode of the Infinite Financial Freedom Podcast, host Josh Mettle interviews Grant Shipman, founder of Living Smith, who achieved a $2 million net worth and financial freedom in just 15 months through the power of co-living.
Grant shares how he turned the traditional rental model on its head, transforming single-family homes into cash flow powerhouses with a 97% lifetime occupancy rate. From navigating tenant dynamics to creating sustainable housing solutions, Grant reveals the step-by-step strategies that make co-living a win for investors, renters, and communities alike.
Key Takeaways:
- How co-living can double your rental income while reducing vacancies.
- The best markets and properties for co-living investments.
- Proven systems for managing tenants and fostering community harmony.
- Why co-living is a solution to the housing crisis and a greener alternative.
Whether you’re a seasoned investor or just starting out, this episode is packed with insights to help you unlock the potential of co-living investments. Visit www.LivingSmithPro.com for exclusive resources and tools shared by Grant, and start your journey to financial freedom today!
Grant Shipman:
I was just like, okay, well I’ll get into this real estate thing, the get rich slow plan, this sounds good. And basically 15 months from when I got started, I had financial freedom in a $2 million worth net worth.
Josh Mettle:
Wow, that’s incredible.
Josh Mettle:
15 months, that’s not getting rich slow. Hello and welcome to the Infinite Financial Freedom Podcast, where we empower you with financial literacy and guide you on your journey to financial freedom. I’m Josh Metal and I’m very excited today to introduce you all to my friend Grant Shipman, a trailblazer, a true trailblazer in the co-living property management and investment space. I’m really excited to learn more about this. I know a little bit about this. We call it room rentals, usually happens around universities, but Grant has really taken this, I’ll call it almost obscure part of the real estate market, and he’s mastered it. He’s in the middle of teaching a five day mastermind with a bunch of real estate investors on this topic. So we expect to get nothing but Grant’s best today.
Grant, lemme just give you folks a little bit more about your background here really quickly. I think there’s some really interesting things here. So you were the founder of Living Smith, which is renowned for its industry leading 97% lifetime occupancy rate. Now, if you’re a real estate investor, 97% lifetime occupancy rate is pretty awesome. So we’re going to find out more about that really innovative approaches to housing and climate changes. He’s an educator, he’s an author, he’s a mentor. He created the first ever co-living course in 2019. And in this conversation we’re going to talk about how you can five to 10 x your real estate investment return. So Grant, with that introduction, how you doing,
Grant Shipman:
Man? I want to listen to this guy that you’re having on. No, that was a great introduction. It’s been such a ride. Right before the show, we were talking about Robert Kiyosaki and I got into real estate and I was driving a shitty Prius delivering Domino’s Pizza, listening to all the audio books on real estate that I could get my hands on, which weren’t many back then. Now it’s like they just fall out of the sky. But I was doing that and I wasn’t aware that this new trend of co-living was happening. I was just like, okay, well, I’ll get into this real estate thing, the get rich slow plan, this sounds good. And I basically, 15 months from when I got started, I had financial freedom and a $2 million net worth.
Josh Mettle:
Wow, that’s incredible. 15 months. That’s not get rich slow.
Grant Shipman:
No, no. And this is what shocked. Yeah, because I had done all the math, I had learned about everything and hey, if you’re going to do single family, you’re going to get about this much per door if you do multifamily this much per door. So I did the math and I was like, this will take me 10 years,
Which was daunting. But my goal, everything, I mean from when I was a kindergartner, I grew up just being like, I want to get married. I want to be a dad, and I want to have this come home from work and have my kids run around my legs and say, where’s my beautiful bride? This is so much what I wanted. And so I thought, man, okay, 10 years. Okay, that’s a long time. And then it happened in 15 months. And little did I know then what was going on is there’s been this trend and it actually is, and I’d love to get into it if want to, but different from this room rental, these kind of things that have been happening forever and ever and ever. This co-living trend I fell into and it was like a surfer, right? I’m riding a wave, but it’s providing all the power I just had to get in front of it. So it was, it’s quite exciting to say.
Josh Mettle:
Very cool. Well, some people who may not know what co-living is, let’s define that really quickly. And then if you could also, maybe on the tail end of that definition, how did you stumble? You kind of gave us a little bit of the background, but how did you stumble into this idea?
Grant Shipman:
Yeah, so there is, you take a normal neighborhood house and you can rent this out by just put one lease on it. That’s the traditional long-term. You could put a 30 day rented out less than 30 days. That’s short term. And now there’s a midterm, a few months there, that kind of thing. But what this is, is that exact same neighborhood house is rented out when there’s a lease on each room. And so it’s selling pizza by the slice. So a house that would make maybe $2,900 on a long-term, one traditional rental would make $6,300 with co-living, property management and rental strategy. So to say, that kind of draws the picture. And now what’s important is this distinction because there’s been rent by the room. And actually, yeah, to say how came upon it was I was driving this Prius and the book said, you got to build your team, build your team. So I got a lender and the lender laughed at me. They’re like, you can’t get approved for a house. That’s absurd. And I was like, I don’t care. I’m going for it, right? I’m going for it. And then the realtor, she’s wondering, she’s being real nice, but is this guy ever going to be able to buy a house? But I went to this house, it was in Loveland, Colorado, and when I got there, it surprised me because in the backyard there was a second house
And I thought, Ooh, I’ve been learning to run my numbers. I thought, okay, how do I lease this out? I could put one lease on both houses, I could put one lease on each house. So there’s two leases. And then it dawned on me, wait, wait, wait. I could actually put one lease on each room. That would be another way to do it. So I ran some dummy ads on Craigslist, and in 24 hours I had over 10 times the response to the lease on each room. So I got all excited. I was like, Ooh, ooh, and this will make a lot of money.
Josh Mettle:
And just out of curiosity, what were the, lemme try that again in English. What were the per room rental rates that you were advertising on Craigslist?
Grant Shipman:
Oh man. So room rentals, this is a great question. They don’t follow the normal rental market, but they’re always going to be, it doesn’t matter where you’re at, they’re going to be 700 to a thousand dollars per room if you’re downtown Denver, Austin, a thousand bucks, but a lot of places they’re going to be seven 50 to $800.
So I was a big time on mentors. I just didn’t want to suffer in my own learning curve. Well avoid it as much as possible. So I went to this real estate network and these mentors that they’re just proud that this kid who’s a pizza driver is doing stuff or trying to, and I said, Hey, I’ve got this exciting idea, check it out. And they’re like, grant, we get it. We get it. But Rent by the room is notorious for high revenues, but by the end of the month, your profits are gone. You’ve got all kinds of management headaches and there’s tenant conflict, there’s property damage, high turnover, and unless you’re called to it, it sucks. And
Josh Mettle:
That sounds like my conversation with my mother, who’s my real estate investor partner. So she’s listening right now. I’m glad we got that out early in the podcast. So how’d you get through that grant?
Grant Shipman:
Well, this is what this real estate, there’s a couple guys, I mean, they’ve been doing this for 30 years. There’s a couple guys that they were really well intentioned and they were right, but what they didn’t know was had actually spent 20 years in the intentional living community. This is like housing co-ops, hippies, communes, house shares. These people are the OGs at strangers sharing a house, not because they have to, but because they want to.
And so I just took everything that they had. I mean, these people have not been around. I lived in a house that was around for, it got started for 50 years, but this tradition has been building up this kind of wisdom of how this works for centuries. And so I just took all of their stuff and I translated it into the property manager renter paradigm. And that’s why these houses, I mean, our average renter stays about 26 months, and this is on leases that are month to month renewing leases. We don’t have the risk profile that a normal single family investor has. So we don’t need to have locked people in for long leases and people love it and they stay there. So yeah, that was what I knew. This kind of angel had a little epiphany in my brain and I was like, I know how to do this. I can do it. And it just took off. We have a waiting list. It’s fantastic. So yeah,
Josh Mettle:
Great job. Well, very cool that you pressed through the initial fear that you may have had when your mentors pushed back and said, that’ll never work. Let’s dive into that issue. I can see strangers sharing the same kitchen, the same communal bathrooms, perhaps in the living room areas, the same backyard. I can see a lot of opportunity for conflict there. So how do you navigate that and how do you keep it so it’s a positive environment when somebody might be lazy and not do the dishes and then somebody has OCD? How do you navigate that space?
Grant Shipman:
Yeah, there is, so I call this question the 226 million question, how
Josh Mettle:
That’s got a ring to it.
Grant Shipman:
Yeah. The reason is so co-living really, and it really got going strong around 2011 with the rest of the share economy. So that’s when Airbnb was taken off, Uber, et cetera. People didn’t hear about it. But in 2012, Ali got founded as a $30 million startup. Then it turned into a $50 million startup scarcity, another $30 million startup common, 113,000 million dollars startup. But these companies were saying, how do we not have tenant conflict? How do we get people to get along? And all of those companies have gone bankrupt. Actually this in June, the common Incorporated filed for bankruptcy, that’s $113 million. And so your question though is such a key one, and this is what I mean, as much as I want to say, Hey, co-living is amazing and you can do this, and it’s not like a personality thing. All my property managers, I have a property management company that runs this, blah, blah, blah, like this.
How do you set up a house? How do you manage a house? How does it do it? But the big thing that we do, and this is what I learned from the hippies, and I say that in a very positive way, is we set up a house. So it has a 40 point household system. So whenever there’s a group of people living together, it doesn’t matter if they’re related or unrelated, they create what’s called a household. How do we live together? Some of these rules are great, and so it just takes about a day before you rent the house out max three days depending on the house, but you set up the house. So the renters mostly run it themselves, and then what you do is you give them this thing called, it’s the tenant. It’s the conflict resolution process. So you want to hear a story about when some
Josh Mettle:
People,
Grant Shipman:
Yeah,
Josh Mettle:
Yeah, yeah.
Grant Shipman:
There’s so many good stories. So there was a guy, I’m going to change names, but there’s a guy named Ted, and this was my second house, so I was managing, this was before my property management company took over, a guy named Ted. He texts and he’s like, John is the devil. I was like, what? And he’s like, yeah, John’s the devil. That guy, you rented out this other room. He’s the devil and he does this and this and this. I was like, listen, just use your conflict resolution process. It’s called the five on five. And funny enough, the next date, John called up and he said, I have surprising news for you. He goes, I live with Lucifer and his name is Ted. And I was like, oh, okay. And then this was maybe Saturday, Sunday, something like this. Then on Tuesday, Todd and John went to Taco Tuesday. This is a really big deal in Longmont, Colorado, taco Tuesday, and they have been going, they’re like best friends, and they’ve gone to Taco Tuesday every week since then. As far as my knowledge goes. Do you know what happened between when they thought each other were the devil and now they’re like, taco Tuesday buds,
Josh Mettle:
I’m guessing tacos and tequila.
Grant Shipman:
This is what happened is I have no clue because conflict, you can do three things with it. If you’re a co-living investor, you can go bankrupt, which plenty of people have. You can run from it. You can try to basically minimize conflict, so avoid it.
Yeah. Some people will say, well, don’t put a TV in the living room if people don’t talk, they don’t have conflict or not as much. Or there’s a $30 million startup, the one big, big multimillion dollar startup that hasn’t failed yet. They just haven’t quite had enough time yet pad split. They recommend not having a living room because then you don’t have interaction. But here’s the third thing. Yeah, the third thing you can do with conflict is what the intentional living community says. They say, listen, conflict is a good thing. Conflict is it shows that people are building relationship. So conflict is a good thing. Conflict can be resolved when conflict is resolved. It’s super empowering and it bonds people together. But the last part is the people who are in the conflict have to resolve it themselves.
If two brothers are in a fight and the mom yells at them to get along, it didn’t resolve that, right? So what’s amazing is there’s these investors or property managers, they’re trying to solve people’s conflicts for them, and it’s a mess. But when you give people tools to have their own household resolve their own conflicts, then amazing things happen. And so that’s why I have no clue, none of my business, they have a conflict to give them an easy tool and then great things happen. Now, these houses, just like traditional households, people, you’re related with all of that stuff. These people are not necessarily best buds, but there’s a shared respect and appreciation. And when you go to sleep each night and you have other people who respect and appreciate you under the same roof, there is a superpower that’s in your life that you can go out and work and do things that’s not there otherwise. So yeah, as far as conflict problems, do our households have them? Thankfully, yes, because there’s actually real co-living households. But do our property managers have any problem with them? No, not at all because it’s not our business.
Josh Mettle:
There’s so much wisdom in there, and you bring up the idea of you just got to get in front of this conflict. It reminds me of a saying that one of my mentors taught me, which is predict, preempt, and prevent. In other words, you predict the conflict, you preempt it with a set of house rules and these things that you’ve learned. I think you referred to it as the intentional living community. Yeah, that’s such a great frame. And that’s the hippies that you affectionately referred to that are creating these co-living spaces and had done for 50 years, right? That’s the community you’re referring to. That’s great. So you’ve taken those lessons, you’ve transferred it over to what you’re doing. So it’s predict the problem, preempt it with what you’ve done with those house rules, and then you prevent it from blowing up and causing you failure in your investment. There’s a gentleman by the name of Jesse Ray out of Arizona. He has a company called Growth House. Have you ever heard of him? Have you ever met him?
Grant Shipman:
No. And I really would like to because I try to learn and meet everybody as possible in this space.
Josh Mettle:
I’m going to email you and him when we’re done with this. I did another podcast with him that we’ll link in this podcast, but he has a similar type vision and he’s been very successful at it. The only slant on it that I’ll offer you Grant that you might be interested in is he’s bringing people together to do room rentals, house hacking, as he kind of refers to it. But he’s bringing people together that have a business and entrepreneurial desire. And so the reason why they come together under what he calls the Growth House, which is the name of his company, is because he attracts people that help the other people in the house grow from a personal development, from a business development, from an entrepreneurial development. So they have these commonalities. And then I believe, as I recall from our interview, Jesse comes in and kind of helps them from an entrepreneurial standpoint.
Really interesting theme. So I’ll introduce you to via email when this is over, but I love what you’re doing, and lemme tell you one reason why I’m really excited about what you’re doing. And you may, I know you’re in the middle of a five day mastermind and course on this, so this might be interesting fodder for you to share with your mastermind group. This was October’s, Freddie Mac Real Estate and Home Report, I think they call it Economic and Home Report. I’ll send you the link, but this is what I found was really grant that you might find interesting. This is the number of renter households per homes for sale.
And what this tells us is that if we go back to 1982, so what are we looking at there? 42 years of data that typically if we kind of just drew a trend line here, let’s call the trend line somewhere between 15 to 20 renter households for every one home for sale. But right now we have almost 30 renter households per home for sale. So what does that mean? What does that tell us? Well, it tells us that there’s a lot of renters, almost a historic number of renters that are sitting on the sideline. And at some point in the future are likely to want to get into buying a home. And if you layer this data point on top of the data point that if you look at the demographics, lemme stop sharing my screen there. If you look at the demographics of the number of millennials and the number of Gen Z that are likely to enter the housing as buyers, not renters, but as buyers over the next 10 years, it’s estimated that there’ll be 27 million new home buyers from those two demographics alone.
That doesn’t include people moving into the United States, 27 million home buyers from those two cohorts. Well, we’re only building about 1.3 million homes per year net after you factor out that there’s about a hundred thousand homes that get destroyed or demolished or fire damage every year. So if you have 13 million new homes coming to market over the next decade, 27 million home buyers to buy those homes, and then you layer on top of that, that we’re at a 42 year near a 42 year high for the number of household renters per homes for sale. That tells me that there’s a massive amount of demand for single family residential homes over the next 10 years. And if you can get in front of that demand, let’s call that demand from 2025 to 2035 by using this co-living idea so you can cashflow even at these higher interest rates, there’s this massive amount of demand for housing coming that you get to get in front of. So I just wanted to, I’m very excited about the single family space because of demographics and because there’s so much pent up demand on the sidelines that we just illustrated with the renter households, you are showing people how they can enter the investment market and have less vacancy, higher returns, and hold on to those single family homes. So I’m excited to marry those two things together. Let me give you a minute to comment on that and any thoughts that you have about that.
Grant Shipman:
Yeah, well, I mean, data is how investors do it. We use our brains to make decisions, then our hearts get to enjoy ’em. And actually, so something that a lot of investors miss, there’s a big debate online backend, oh, I think it was 2017, but I had posted that, hey, the one person lease is the highest in demand lease and this pretty well known investor. He was like, no, you’re wrong. And posted Census Bureau and all this stuff. And then there was back and forth and people were involved. But what was big is he was absolutely right that the Census Bureau showed that it’s more like about three and a half people per lease. But the Census Bureau calls a household according to how it is financially or defined by insurance. So if a guy has two daughters at college, they’re not sharing a lease, they’re not living in the same household at all. But insurance wise and financially, they’re considered part of the same household.
Josh Mettle:
Interesting.
Grant Shipman:
And so Harvard though, has released data and this guy was like, oh, shoot. To his credit, he was like, oh, this is, I was information he didn’t
Josh Mettle:
Have. Yeah, that’s great.
Grant Shipman:
And because Harvard Credit Unions report on it too, but really how many people are in one lease? And in 2003, something that happened that had never happened before is that the most popular lease became the one person lease. And so with the housing shortage, like Airbnb has been blamed recently. Even the financial crisis and builders backing things off, it was 66% I think was back in 2009. But really in 2003 when you had a three bedroom apartment that was being used by maybe three or four people, or even two people now is being used by one person. When the current inventory gets used differently, then that really impacts a housing shortage. So what you are sharing is, and I wanted to add too, this how people are using housing is different, and most people, I would prefer to live with others if the pros outweigh the cons.
Yeah, and that’s what actually a lot of co-living investors, what they’re excited about is they can buy houses in markets that they normally couldn’t buy houses in because they don’t cashflow, or also the houses that they do have in their portfolio, they’re having problems qualifying people to rent that house on one lease so they can flip it into a co-living rental strategy. And now they have plenty of people who qualify to, they pay for a bedroom, but they get a whole big beautiful house where the investor has that same house to asset manage, but now is making double on it. Yeah, I mean, it’ll be interesting to see how it plays out, but I love, oh man, data is, it’s exciting. Oh, man.
Josh Mettle:
Yeah. I mean, that’s what we do. We try to figure out are there more headwinds or tailwinds for this investment and which one’s going to win over the next 10 years? And data helps us measure that. I want to ask you a little bit about the most ideal markets. The people that I think this is such a layup play for is somebody who might be in a current home, they’ve got a three, four, 5%, let’s just call it below market interest rate, and they’re thinking about for some one reason or another, they need to move. And they’re thinking to themselves, would it be possible for me to turn my current low interest rate home into an investment property and then leapfrog into my next owner occupied? So let’s talk about markets. What markets are the ideal or less than ideal for co-living? Does it need to be near city centers, near colleges? What advice could you give us?
Grant Shipman:
Yeah, so maybe something that I didn’t touch on before, and it has to do with, I want to go back and touch on it because the idea with universities, or does this need to be in big cities? So with rent by the room, it’s almost always been transitional housing. So for instance, student housing is transitional housing or sober living or halfway housing for people who’ve been in intentional centers. There is, there’s rooming housing for basically housing for the poor or boarding houses. And some people will think, oh, co-living is just rooming houses rebranded. It’s just transitional housing. And if they want to say that, cool. I make it really clear there’s a new thing that’s been happening. Like I said, co-living is not this transitional housing, which transitional housing is such an important housing in society. I actually have sober living housing, and it’s important, and it’s great, I do not consider it, is this new thing where mainstream renters, they’re not in transition that mainstream renters are wanting to rent a room and live in this way, where before transitional housing, even senior housing for example, is transitional housing. And most transitional housing people are only there because they have to be and they don’t want to be there any longer than they need to be.
So with the one exception, maybe senior housing, but even that assisted living center, nobody wants to be in that, right? Maybe they hope they can be there as long as possible. The alternative is less enjoyable, but co-living, just to make it really clear, because co-living is for your mainstream renters. I mean like college professor, civil engineer, HVAC technician, waitress, we do have now, just because a co-living house is not student housing doesn’t mean that students couldn’t live in that house. We’ll have a student or two or I remember my third house, I had a woman who actually, she, so she was living with, I think he was a civil engineer. There’s six people in the house, and she had been homeless for two years in her car, and nobody else knew that in the house, but I knew that as the property manager. But so co-living houses work for all kinds of people, but they’re not student housing. They’re not these other different things. And most people, frankly can figure out with assistance or without how to afford 700 to a thousand dollars a month room. And remind me again, I apologize. I just remember the question you asked. I was like, oh, oh, you had asked where do these things work?
Josh Mettle:
Location.
Grant Shipman:
Yes. Yes. So just to say, co-living is going to work anywhere that’s going to be 50,000 or more people, it’s going to work other places too, but it’s going to work great. Anywhere 50,000 or more people, anywhere where real estate is good to invest in co-living is good to invest in as far as being around a university or say a hospital where people who are doing student housing or say midterm or nurses that are there for three months or something, that if you have a co-living house around there, then you’re going to have more people that are students or working at the hospital just like if you had a normal single family rental there. So if you want to attract those people, great. But these things work wherever. It’s a normal house, normal neighborhood. I would say the big things are that, so we’re going to have six to 11 bedrooms. We’re going to have six to 11 people in this house. Does that surprise you, by the way, Josh? Is that like, oh, that’s a lot.
Josh Mettle:
Well, based on your numbers that you were running where you said earlier, Hey, you may rent the whole house out to one family for 2,900 bucks a month, and I could get perhaps 6,000 bucks a month, my mind was thinking, oh geez, you must be talking 6, 7, 8 bedroom houses. So yes, it surprised me. That’s not what I would’ve thought of targeting. I would’ve thought in actually smaller, less bedrooms. But it makes sense based on the numbers that you’re talking about.
Grant Shipman:
Yeah, probably in the top five of what people will picture differently than what it is, is people think that what works best for renters is if there’s less people in a house.
But see, I have, so my property management company, we will manage a four bedroom house, but this is what happens when a four bedroom house, when it’s going, it actually is the hardest on the renters. It’s the hardest to manage because when one person moves out and another moves in, 25% of that household just changed. And so when you have an eight bedroom, nine bedroom house, one person moves out the household, how things work, who all knows each other, it mostly runs the same me and my wife, these houses, by the way, they’re A and B level neighborhoods. They’re great. We lived in these houses. We didn’t let people know we were owners. We were undercover because you want everybody to feel equal in a house. So they all take responsibility. But we lived in them until we got pregnant. And so I’ll share, so single family homes are built for families. So we have a five bedroom house, and then there’s a living room, and then there’s a rec room, and then there’s a fireplace room, and then I’m also in my home office. So with adults that don’t have kids, so independent, responsible adults, they’re not home very often. They’re at work,
They’re at the gym, they’re going to the movie, hanging out with friends. So when you have a even, so a six bedroom house, people don’t see each other very often. Schedules only align when you have at least a seven, eight, or nine or 10 is really the best. Then these renters are going to see one or two other people that have a similar schedule to them. The only reason we don’t go higher than 11 is once you get to 12, it kind of like two households form in the house. And that’s not bad. It’s just confusing from a property management standpoint, so to say, is these houses, what you want to make sure is, it’s going to be great parking, usually a corner lot or a house with a alley. There’s a lot of these. All my houses I’ve ever bought are on the MLS. I don’t use creative financing. I have a realtor. They’re all over the place.
But yeah, so it’s going to be though, I mean, the easiest one to look at is if you have this house, I’m in a five bedroom house right now, you add a door onto what was the playroom, you, then you add another door to the fireplace room. Of course, as long as these are, there’s the legal windows and all this stuff, and these are going to become big badass bedrooms that people are going to love, then you’re going to have the nice living room there because people want to sit down and they want to live in the living room. There’s a big screen tv, and when you’re adults, you love that living room. But if there’s a second living room, like a fireplace room, it’s another place you can forget your socks and you have to clean. It’s annoying. So yeah, just to say if there’s a person out there who has a house is thinking about moving, just look at it as, hey, if you charge per bedroom and you got $800 per bedroom, would that amount of money be compelling to look into this further? That’d probably be the easiest way to say it. And in office, a home office probably would count as an extra bedroom. It wouldn’t be a conforming bedroom, but it would be a legal bedroom.
Josh Mettle:
Great way to answer that question. Thank you. So let’s talk about the other stumbling blocks here. So we talked about the first stumbling block that I thought of, which was how do you create cohesiveness inside that community? And you do that with house rules and the lessons you’ve learned from the intentional living culture or community. And the other question or the other challenge that I was thinking of was parking different laws from the local municipalities around number of leases, whether you can do bedrooms or not. So can you speak about what are the other kind of gotchas or things that we need to be looking out for as it relates to those things?
Grant Shipman:
Yes, and this is important because when you’re doing your due diligence, you’re checking out a house or does a current house that you have work,
You want to look at, Hey, does this meet local regulations like you mentioned? And we actually, this used to take not too much time, but you’d have to Google your local city planner or code enforcer and you’d call them up. And usually they don’t know what’s going on. They don’t know their own codes totally. But that, what’s nice now is in this five day training we’re in the midst of is because of ai. We just give people a chat, GPT cheat code, and then they can put an address in there or they can put a zip code in there and it just says Here, it’s no way. Yeah, that is so cool. It’s so nice. But to say is, it’s still easy just to Google your city planning department or code enforcer and say, Hey, I’m looking at, I want to help with the housing crisis. I’m looking at renting the rooms in my house, but I want to know what is the restrictions on unrelated adults sharing a house? And what’s really great about this is just like the laws are working against those of us in Airbnb investment, which that’s my wife. She loves hospitality, yay. But the laws are restricting things more and more.
But with co-living, there’s this trend in the great direction. So for instance, the Colorado just had a law passed July 1st that bans any regulations that restrict co-living. This is also in Iowa, New York, California, Oregon, Washington. There’s cities that are going, but this legislation, whether at a city council or statewide, they’re all over the place because housing is such a challenge. And so when you take current inventory and you increase the density, it immediately helps solve the housing crisis immediately. It helps solve skyrocketing new rents. And instead of somebody getting some crappy place, they get a nice house and a nice neighborhood for the price of a room like holy,
Josh Mettle:
Win, win, win. Alright, so that’s great insight on the legal restrictions. Let’s talk about the parking restrictions. Any challenges with neighbors? What other gotchas are out there that we need to be knowledgeable about?
Grant Shipman:
Focus on too is so neighbors. It is easy to lose neighbors trust even if you have a normal rental property, just a long term or Airbnb. But it is not difficult to keep neighbors trust. So basically find a house that fits. So what our criteria is is there’s going to be one parking spot per room for rent. So only one person in a room, so one parking spot, and you can’t be double parked. So the driveway is only going to count as a typical A two car driveway is only going to count as two parking spots. Got it. And you can’t be parking in front of a neighbor’s house.
So a corner lot works great. If there’s a house on a curve, there’s actually a lot of these houses that work really well. But when we’re looking at houses or I’m helping investors decide, we’re onboarding about 50 houses in the Denver area, my property management company coming up in January, this law that passed, now everybody’s going crazy and there’s about a hundred houses, and I’m estimating that 50 to 60 of those will work for co-living and the other ones won’t. Because if you force a house, for instance, with the parking, that shouldn’t work and you make it work, you just made the neighbors mad. And actually the houses we have either one, the neighbors don’t know it’s a co-living house because a lot of neighbors don’t talk anymore, unfortunately. But the other one is a lot of neighbors actually appreciate it. Now you’ve got eight responsible adults there. The yard looks better than it ever did before you took over the house, right? Because you’ve got two guys who are fighting over who gets to mow the lawn and edge it or whatever. And so the parking is important thing. The bathroom ratio, there has to be
No more than three bedrooms to one accessible bathroom. And then I would say the other gotcha is a little bit of a right now, because investors are concerned about regulations, and there’s some teaching going out there that I’d like to just help people avoid. The pitfalls is saying, Hey, investors, don’t worry about that. We do this membership agreement thing and blah, blah, blah. But basically instead of having a lease with your renters, you have a membership agreement. And therefore, since you’re not under tenant landlord laws anymore, you have a membership agreement. You can pack as many people as you want in that house. And I’ve got a friend down in the Dallas Fort Worth area, and he’s got the code enforcer knocking on his door and he can see it through his ring doorbell. And the code enforcer is like, Hey, how many people do you have in this house? There’s only three unrelated people, unrelated adults in this area. And he’s like, oh, crap. He’s got eight of these houses. Because the company told him, Hey, you can do this. Just use our membership agreements. So I just want to kind of that got you out there is when you’re a real estate investor, have a lease with your renters. It protects you,
Josh Mettle:
It
Grant Shipman:
Protects them, and it works great. And these are wonderful renters. There’s plenty of wonderful houses you can, following the law is always the best way to do it because you don’t want to just make money this year and have financial freedom this year. You want it in 10 years, 20 years, on and on.
Josh Mettle:
Great call out. And so I think we’ve done a pretty good job grant talking about how this co-living idea is a solution for the housing crisis in terms of affordability. But as maybe a closing question here, I’d love you to talk a little bit about how does this also help towards being more responsible from a perspective of the climate crisis?
Grant Shipman:
So this kind of a fun thing is I say, Hey, if anybody’s going to win, everybody’s got to win big. So we already covered how as an investor, I got my 10 year financial freedom number in 15 months, and now I get to see people get to do that because you’re getting in front of the highest in demand lease. And then from the renter’s perspective, they’re like, oh, awesome. I don’t have to sign a lease with strangers. I can have my own lease. I can live in a great house. But the other one is if there’s anybody who’s concerned about the environment, I mean better than any of the electric car legislation recycling that you can ever do, if suddenly you have one house with one HVAC unit with, and you put it into a co-living house, and I know this, I came from the hippie world, there was a environmental consultant, and she just said, let’s see, you have, what was it? You’ve reduced the carbon footprint of these, what would’ve been these eight people by? I think it was lowered it to 16%. I think if you have concerns about that or not co-living investment, just boom, that’s what happened. And then on the housing inventory stuff, city planners, developers are like, we’re going to build. We’re going to build, we’re going to build. But co-living helps solve that problem. The moment you start, you open up a co-living house. So yeah, it’s also cool to inadvertently have these fantastic things happen too.
Josh Mettle:
Very cool, man. That’s a great way to wrap. And I lied. I got one more question for you that I was just thought of as you were going through that. I was just thinking about efficiency. So what about from a furnishing standpoint? Do you furnish all the rooms and furnish everything almost like a midterm rental? Or do you leave the bedrooms for the tenants to furnish?
Grant Shipman:
Yeah. This is why your show has such a good reputation as these questions. The furnishing here is so transitional housing, you need to furnish the bedrooms because these people are in transition. They don’t have that. If you don’t furnish the bedrooms, they’re going to get a bed with bedbugs in it and drag it in there, and then all that stuff. So separating. So this is co-living mainstream for mainstream renters. So we furnish everything in the common areas. So we furnish everything except the private bedrooms because mainstream renters, they have their mattress that they have this dresser that they dig. They have all of that stuff. And if they don’t, they can easily go get it. So we do that. And I will mention I do have five more minutes, and then I’m jumping into a coaching call. It’s so fun.
I was doing, I had my head down. I was like, oh, I was doing this, doing this, doing this. And I thought, no, no, no. I need to come out and kind of duplicate my efforts and help other people to do that. So now we do all of these things to spread awareness, and that’s why I really appreciate being on this show as well to share this with your listeners. It is really helpful. But the reason it’s really helpful is because it’s the number one demand in society is just housing. The number one cause of homelessness is the price of real estate. And I mean, even Beats addictions like number eight, so to say. I really appreciate it, Josh.
Josh Mettle:
Yeah, it’s pleasure to have you. Grant appreciates you sharing all your wisdom. Tell us where people can find you, where they can find Living Smith if they’re interested to be coached by you or they’re interested about property management companies that could help ’em with this. How do they learn more from you?
Grant Shipman:
Yeah, so I made, for real listeners, for anybody hearing this, if you go to living smith pro.com, so living smith pro.com/ff, right? Don’t forget it. With Infinite Financial Freedom and is, I mean, I think it’s the surest best, quickest, cheapest way to financial freedom. But on there is a little goodie bag. One is that five day training that we do, that’s a free training. You can jump in on that. The other one though, is there’s a book that our renters wrote. Wow. So yeah, if you want to, Robert Kiyosaki says, right, what’s the best thing you can do? Get to know your target market. And so when you hear from, they each wrote a page, it’s a 30 page reader. So when somebody moves into a house, we give them this book. It’s called Welcome Home.
But that book’s on there, you can download really easy to read. And it’s amazing. You’ll learn things that you can apply to the own people that you live with, even it’s just a couple living together. And then the last one, for people who are, maybe they’re in the middle of it, they’re in the co-living, they’re doing it right now. They’re struggling. They need help is they can just schedule a 30 minute call directly with me and I will just immediately help. So that’s something we don’t offer that anywhere else. But yeah, so anybody just go into that living smith pro.com/ff and I’d love to speak with anybody or anything that’s helpful there.
Josh Mettle:
Super helpful. Thank you, grant. We’ll make sure we link to that in the show notes and description as well. And just appreciate all the abundance of wisdom you shared with us. And here’s my challenge to any listener, if you have had an excuse that the numbers don’t pencil, you live in a high cost of living area, you think it’s impossible for you to get your foothold in the real estate market because of where interest rates are. I encourage you to study more about this. Also, I’m on grant’s Instagram page, and there’s a Living Smith investment calculator. But go back and do the work, reanalyze any blocker that’s in your head around this with this co-living idea, and see if this might be a path forward for you. So with that Grant, thank you so much for being here. My friend and I will introduce you to my buddy Jesse, and I hope to have, maybe it would be really fun. Maybe I could have you both back together and we could do an episode with the three of us sometime in the future.
