The housing crisis is one of the biggest challenges of our time, with a shortage of 5 million homes driving up costs and limiting options for renters and investors alike. But what if there was a smarter, more scalable solution? In this episode, we’re joined by Johnny Wolff, CEO and Founder of HomeRoom Coliving, one of the fastest-growing coliving companies in the U.S. Johnny shares how coliving is transforming affordable housing—helping tenants save up to 50% on rent while making homes more profitable for owners. From the financial and social benefits of coliving to the cutting-edge leasing technology that enhances the tenant experience, Johnny breaks down how HomeRoom is reshaping the single-family rental market. Plus, he reveals why coliving is becoming the fastest-growing asset class—and what it means for investors looking to capitalize on this trend..
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Innovative Approaches to Affordable Housing and the Power of Coliving With Johnny Wolff
Welcome To The Generations Of Wealth Show
Welcome to the Generations of Wealth Podcast. I am your host, Derek Dombeck. And today we are tackling the problem of affordable housing and oftentimes we all look at, Possibility of maybe the government is going to supply the shortage of housing. And we all know that’s not going to happen. So today I’ve got Johnny Wolf with us and Johnny he founded homeroom, which has just recently sold the bungalow. But it’s a platform for co living and sharing space. So awesome episode before I bring Johnny on again, thank you so much for following generations of wealth podcast help us expand, spread the news any way that you can, we really, truly appreciate it. Jump onto our Facebook group, generations of wealth, Facebook group, anywhere you see us on social media, share it, like it. These are all the things that we all know we need to to help each other. So with that, let’s get onto our show. And here comes Johnny Wolfe. Johnny Wolfe, thank you for being a part of the Generations of Wealth podcast.
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I appreciate your time. Why don’t you tell my listeners a little bit about yourself. Hi, I’m Johnny Wolfe. I’m the CEO and founder of Homeroom Co Living. And we recently were actually acquired by Bungalow, which is the largest player in the co living space. I’m helping them basically help investors buy and rent out co living homes. A little bit about my kind of background. I started my career in the Silicon Valley in finance and started to do real estate investing shortly out of college. And found that I was making a lot more money from investing remotely and real estate than I was from my day job. So I moved to Austin 2015 to invest in homes relatively full time. I rented out each of my homes by the room and Austin at that time, there was a lot of demand for that and so it went really well. What didn’t go super well is managing roommate houses, which kind of was. A bit of a mini nightmare every once in a while and generally not that bad. So I started homeroom, which is 1 of the until we sold was 1 of the larger coven companies in the country that ran roommate houses and helped investors find homes remotely. As investments and rent out each room separately. So we did that from 2018 to 2024 and we sold the bungalow just now. And now we’re taking the next step with them to help investors buy co living homes as assets. So that’s that’s a bit about me. There is a whole lot to pick apart there for sure. I’ll give you a little bit. My background with the co living side, I did the same thing with a, used to be a group home, and then we turned it into a 12 bedroom, six bath property. And again, leased it out per bedroom usually on a nightly or weekly basis. So I am familiar with the management side of that and the joys of management that, that can come from that, but. I guess before that, how did you decide what was your start in real estate and then how’d you get into the co-living scenario? Yeah, I connected through a family friend to someone that was running a property management company out of. The Permian Basin in Texas Midland, basically, or Friday Night Lights is based out of it was in 2008 and you could do 10 percent down investment loans at that time, which was sweet. So I bought a new property for 96, 000. Dollars and it went really well. So I started to do that again. I did. I bought 1 with myself, directed IRA and a few and did a few other real estate investments. So that was really what got me started in real estate investing and. Yeah, it definitely had a few negative moments where we had a heavy turn. Someone left and it was 10,000, which I think is a good experience for any early investor to have. So you can be ready for that, the inevitable downside of real estate. But the upside is really good. When I sold that property, I made 100, 000 in my 20s. That was a ton. So it was really exciting.
“When I sold that property, I made 100, 000 in my 20s. That was a ton. So it was really exciting.”
You’re telling me you couldn’t just buy houses in California for 98, 000 with 10 percent down? Yeah, I spent a good amount of time looking and no, I couldn’t find anything really. Good, great question. With the co living side of things though, obviously affordable housing is an issue all over the country. What are the advantages of doing that? And then how do you set up a building for that? Yeah, the advantages, there’s a number of them. 1 is that we’re trying to get 50 percent more rent from the same house. So we want to when people come talk to us, we show an example of a property that 1 of our investors bought. And it was renting when they bought it for 2000 dollars a month. And then, by the time we had finished setting up and renting out the room was renting for 3000 dollars a month. Obviously, that’s compelling. Math equation, right? 50 percent more rent and investors like more rent. At least the ones I know. That’s the big reason that it’s appealing is that you can drive the revenue higher. It is a more complicated management approach. Fees will be a little bit higher. There’ll be a little bit more headache, but the good thing about a company like home room or bungalows, we do everything right? So we have a lot of expertise in doing that. I definitely know a ton of people that did house hacking slash roommate rentals by themselves and I’ve done it a ton myself as well. So that’s an option too. And, I always would get emails every once in a while about people who are renting out by the room themselves and for tips and tricks. And we’re happy to share those because it feels like it’s really helpful in today’s affordable housing to help us out.
Facing Challenges
Did you run into a lot of challenges with different municipalities? As far as. short living or short term rentals or, non related parties living in a property together, ordinances. How do you get around that, assuming you did have that challenge? Yeah, that’s a great question. The short term rental is not a challenge for a homeroom or for a bungalow. Generally, the minimum lease is three months. Most jurisdictions don’t consider anything over three months short term. Some consider anything Short term, and then we’ll adapt to that. So we’re really long term rentals at its core. There are options out there that will do shorter term. And you mentioned you do weekly which are daily. Wow. That’s a lot. That sounds challenging to say the least. When you have, single family rentals, not as many variables, you add shorter term, you add more variables, you add multi people, more variables. I think doing short term rentals or multi people rentals. I would do either or, but together it’s going to be, it’s going to be an interesting experience for sure. Yeah and then in terms of encountering with municipalities we are aware of city restrictions. That’s something that we do. We we think of, returns and risks. They’re both along that spectrum, right? Short term, we think of single family rentals, returns are the, maybe the lowest, the rent’s going to be the lowest, right? Yeah. Co living is going to be in the middle and then and at the top end is going to be a short term rental. And then we think in terms of compliance or city risk, short term rentals will have 0 risk typically. There’s some fringe, but not much. Colleen will have some risk and short term rentals will have a lot of risk. Just like anything in the investments in the world, the more risk you take on, the more returns you can possibly get. We have a protocol in place for, how we address that with our investors. We say, hey, are you interested in, pushing the limits of occupancy that the city has? We have there’s some there’s 1 operator in the space who does that with nearly all their properties and they have a, a process for dealing with cities to mitigate the issues when they come up. There’s other operates in the space that just fully comply with the city’s operation policies and you can do either or the, the reason we think of this as a much lower risk than something like short term rentals is short term rentals can get turned off like a light switch. In San Diego, they went from, you can have short term rentals as many as you want, to you can have one if you live on site. Massive change, right? And there’s with co living and roommate rentals, there, it’s more, they’ll turn you down, they’ll dial it back, versus turn it off. That’s what we’d like about it in terms of risk mitigation. Yes, definitely an issue that the industry faces but one, when handled well, we think it makes sense. The risk profile makes sense for the additional returns you got. In terms of the property itself, you’ve got a single family home and maybe a 3 bedroom, 2 bath house. Are you just utilizing the existing layout, or like in my case, I took all the common areas, living rooms, formal dining room, all that stuff, I turned it into bedrooms. Put up partition walls, things like that. What does your model look like? Yeah, we we’re open to, I would say typically we’re more in the customize the space model, right? We one of the things that Bungalow has is they’ll get more rent than a typical, Remain rental company, because they have better technology and kind of a better experience, right? So there’s some premium to it. So we can get away with your bedrooms. And then other operators and still do really well financially. I think the challenge. When you have extra space, and you can turn into bedrooms, it’s a lot of money, right? This big margin, the cost to create a bedroom is not terribly high. So it can’t the more bedrooms you add. The more of the risk profile pushes up the investment, but also the higher the yield and performance goes potentially. We will do both, but we’ll share work with the investor. What’s your risk profile? How much do you want to invest up front? There is risk here with the city. How do you want to manage that? And how do you want to think about it? And so that’s really our approach. We’ll go super conservative. Or we’ll go more aggressive with more. And it’s up to the event the investor to choose their own adventure there. An adventure is probably a great word for it because on the surface, you’re like great. I can add an extra bedroom or two bedrooms. Now you’ve just added an additional one or two or three tenants, which adds another one or two, three different challenges when it comes to personalities and people getting along and things. What’s your experience been with the social aspect of it? Yeah, no, that’s where we really thrive, right? Because we’ve, between the, between bungalow and homeroom, we’ve housed 10, 000 roommate tenants. Okay. And so we built, we’ve used investment for venture capital to built a really beautiful meet and greet system where the roommates and tenants meet each other before the move in all the move in process is heavily automated by technology and then we have built out really robust tenant support teams to support those issues, right? We’ve seen every type of roommate interaction. Oh, actually, that is, I’m going to knock on wood, we’ve seen a lot of roommate interactions. I’m sure that we’ll see new ones and it’ll make, I’ll get an email on the weekend and it’ll be even crazier than possible, but generally, it’s about managing complexity, right? Every business is about managing complexity, and this is something that we’ve gotten extremely good at managing. the complexities of co living and roommate interactions. So it’s not really something an owner has to worry about. We very, I can not think the last time we’ve had to get an owner involved in roommate issues. You kept saying we, so when you established and started to build Homeroom. I’m just assuming that this came with a lot of tech, a lot of, software and other things below or, other things that you have to deal with what, how did you even get past the idea of, I want to do this and take those first steps and who was it with, did you have partners or is this all you? No, I started Homeroom as a, as my, yeah, I started Homeroom myself. But I did bring in team members over time and different teams at different phases of the business. And, as we sold a month ago, we had 47 team members. And a lot of those got a joint bungalow. So it’s definitely been, anytime you’re going to, you’re going to scale to. A thousand plus remain tenants, you’re going to have to bring a wee along because it’s operationally complicated. And, we had investors as well. So number of different pieces, all those pieces are really necessary to build in this space, which is at size starts to get relatively complicated if you want to do a good job for tenants and for investors, but we got very, we got there. So I’m pretty happy about that. No, congratulations. It’s, I know what it’s like building businesses and and then taking on staff and you just, yeah, you take a leap of faith pretty much every day you get up. Every day, man. Yeah, definitely. That pressure is very real. I think it, and I don’t, I’ve only, this is my first business with a team, so it definitely is a different animal when you start to have. The team interaction cross, when you’re remote, you’re across multiple states, all these different pieces add little layers of complexity and definitely ratchets up the pressure just a little bit.
Building a Dynamic Team
Yeah, for sure. For sure. Did you have a lot of your team overseas or was it all in the states? Yeah, co living, single family rental short term rental. All these are, operationally property management, heavy businesses. A lot of them are fueled by, tech innovation that makes it even more efficient. But yeah, a lot of the team is necessity to be overseas, right? To drive down costs because you’re trying to. Optimize the equation for investors will optimize the equation for the business and our overseas team was invaluable. Some of them are spectacular team members, so we’re really happy to be fully global. We we became fully remote in 2019 before covid and it was really helpful and I think it gave us the ability to grow really quickly with Not a lot of investment or capital, so it’s not easy though, there’s definitely little challenges to overseas team members, there’s time zones, there’s, native English fluency isn’t there, even though they’re excellent at it for a second or third language, but it definitely, it saves you a lot of cash. It adds a lot of horsepower and it’s, it adds a lot of complexity. A hundred percent. And as my team who is partially overseas is, working on this podcast episode and puts it out, I appreciate you, no it honestly if I went back 20 years or 21 years ago, when I started in this business, trying to even comprehend what would it be like to have people all over the world working with me and for me on my behalf. I think it would have been impossible to even fathom, and now it’s impossible to even fathom doing it without them or people like them. It’s definitely a global business now, and it’s, and I love it. I think it’s great. And the same thing with co living. Co living isn’t brand new, right? That’s been around for thousands and thousands of years, but with innovation, it can be so much better and smoother. Which I guess leads me to the next question is, what do you see for the future of co living? Yeah, I think one of our investors venture capital investors his, his belief is that co living is an inevitability. Right, is that some version of technology colliding with real estate investing, colliding with housing, necessitates co living to be done well. And I tend to agree with that. I think We are it’s complicated and nuanced and it’s housing and it’s community and it’s all these pieces, but in every market that exists. Renting a room is cheaper than renting out a studio, right? This is in Thailand. People do co living in Thailand. We’ve had conversations where it’s like, why isn’t this only in San Francisco? Because it’s cheaper in Thailand too, right? And some people are looking to optimize community and they’re optimizing price where they live. It, there’s a need and I think it can be done better globally. And I think the opportunity is global. I think it’s Challenging and difficult because you interact with property operations, but we’re seeing some companies in Europe, some companies, the United States, like bungalow and other players. Expanding some of the fastest clips that we’re seeing in property operations technology. In the entire industry, so the need is there, it satisfies a massive need. The question is, how do you optimize all those equations for the value for the owner and for the tenant? And then how do you get it out there as quickly as possible through technology? So I see the opportunity is massive and big. I think it’s not a, if it’s a 1, and I think the question is like, when will a lot of smart people who are actively working on this problem get to the point of solving it? It’s just I almost see it it took forever, it felt like for voice to text to work, everyone kept saying, this is going to work at dragon software. I, our CEO worked on voice to text in the 90s. They had a bunch of Stanford guys, they got nowhere. And so I think this is a problem where it’s we could write it off that it’s had its bumps, but I think it’s inevitability. And the question is, when does it break through? Yeah, and I also would say, and this is maybe. A California conversation and I don’t get political, but I just have my own opinions and I don’t necessarily I’m not always PC. Using California as an example right now, as we’re recording this, there’s fires going there, a lot of devastation in California and there’s people talking about. The rules and regulations and all the red tape on not only getting the fires put out, but then rebuilding and, as you mentioned, this stuff takes forever to take hold and then one day it almost feels like a light switch was flipped, but we all know that’s not the case. How does regulation and red tape specifically to co living hold back the growth because. I know just with the building that I own we have a conditional use permit with the city. So we know that if they change an ordinance or they change the rule, it’s not going to affect us. But I also have lots of friends in other parts of the country specifically in Georgia. Atlanta markets, all the suburbs of Atlanta. There’s a company down there called pad split that was very popular or is very popular, and they have. It’s had some major struggles recently because of different communities and different neighborhoods and all that the red tape, right? How do we get past that? Yeah that’s a big question. And I think. And I I know CEO of PadSplit and I think all the folks in Colavine, we talk, we watch each other and understand. So I know Atticus and PadSplit. I think. Everyone’s approach, this has been a bit different. I think their approach has been almost like the Uber approach. We’re going to do the deploy it and then we’ll work. We’ll have this. We’ll ask for forgiveness, not permission. I think that approach generally. In these kind of situations, maybe, right? It’s hard to know what will be the breakthrough. I think at a federal level, there’s there’s a Dodd Frank or there’s. Sorry, not Dodd Frank. There is a national kind of a Supreme Court ruling that actually Belter, sorry, that’s the correct one, that sort of influences what cities are allowed to do, but there’s a kind of a groundswell currently going on with regulation, and we, Homer is actually in federal court right now, fighting that against the city, and I know Pat’s was doing the same thing. The reality is, for cities to arbitrarily define what a family is, We think that is just doesn’t make any sense, especially with the housing crisis, especially with kind of, like, when you look at, why do cities get to do that? I think, the long, the best, most complete way is getting rid of that, the Belter kind of. Supreme Court ruling and just say, no, you can’t really define what family is. Unfortunately, cities, because some cities will say a family is related or it’s two people, which we think is wild. So there’s a lot of push there and there’s a lot of people that can’t afford housing. So that’s a simple solution. Very quick. And especially with fair housing laws being as they should be in place. Nobody should be discriminated against. And yet the cities are able to discriminate just because they can deem what a family is. In this day and age we can’t. Even indicate if somebody is male or female anymore without getting into hot water, right? And maybe that’s not water that might just be social hot water. But regardless. Now, you’ve got the city’s telling you. Okay, you’ve got unrelated parties living in a house and they can’t be considered a family. What gives them that right and we all know there’s on the federal level. They can’t get out of their own way to provide affordable housing. In the private sector, we’re, we are able to, and this is me probably getting on my soapbox, but small business owners are, have been the problem solvers in this country for the entire existence of the United States if the bureaucracies get the hell out of our way. And we can solve the housing problem really quite quickly. If they get rid of the red tape, right? Super fast. Yeah, there’s enough square. There’s enough square footage in the United States for everyone to have 1000 square foot to themselves. But for some reason, the cities now have godlike powers to define what a family is, and it doesn’t, it really doesn’t sit well with me. It doesn’t sit well with anyone in the industry. We’re continuing to work around the problem, but, we’re deploying units that are 40 percent cheaper than a studio. You want to solve. Affordable housing homelessness, we are literally rolling out the solution and we’re fighting every inch of the way to get it to be done. So I think that’s 1 of the parts about working with bungalow or, an eco living operator that I think is. A win, right? We’re better rents, but like behind the scenes, you’re also providing one of the most needed things in the United States, which is affordable housing. So you can feel good about it, but also make more money, which is a great combination.
Vision: What’s the NEXT for Johnny
So what’s your vision for yourself? What’s next for Johnny? I know you’re working with bungalow, but what do you see coming in your future? Yeah, so I joined bungalow as their head of living as you can tell that this is my passion. I love this model of housing. I’ve loved it when I lived in it for 10 years. So I’d my goal is to continue to chip away at this problem, right to help investors make more money by buying co living houses to make their experience owning the house is really seamless, but also provide a ton of affordable housing units everywhere, right? We need them in the coast. We need them. We need them in the Midwest. We need them everywhere, right? Everywhere. We’ve been and we’ve been everywhere as a company. There’s been a lot of demand and a lot of people that are very excited that they can actually afford to live with people that. They enjoy living with, and not have to go through Craigslist or something a bit dicey and owners are happy that they don’t have to think about. The 50 percent more rent they get, so that’s really my goal is to, drive this until there’s enough for everyone throughout the entire country. And ideally. The next step would be going global with the product. Are you involved already or. Have the intentions of being involved in selling turnkey living properties that are already set up, or is it more along the lines of helping a property owner? Like myself convert a property to a living setup. Yeah, so we are, we’re right in the middle of those 2. We call it turnkey, but it’s not turnkey in the traditional turnkey approach, right? Where the turnkey approach that you mentioned is it’s done, it has tenants, you just jump in. We do like a, we’ll help you find the house on the MLS or off market to buy, then we’ll manage the construction with you. So then it’ll be set up, but you’re going to be the one helping with that process. A little bit in the middle not truly turnkey, but we find that people in this space are looking to, they have a specific needs, specific wants, and we want to match that house to what that is, and that usually, we open up all the properties that are available for sale to do that. If I were going to do something like this in Wisconsin. And I just didn’t know what my market could bear. Is there really a market for tenants? What would that rent look like? Then I have my projected income, so I can go buy a property. I know what I can spend on that property. All of those steps for a brand new person contacting you. Is that something you help with, or is that on me to go and try and figure out what my market looks like first? Yeah, I, that is on us, right? We have the density. We’ll do everything there. Just like short term rentals, living as a, as an emerging space has some wiggle on it. Or I was like. Everyone knows the exact single family rental rent price, but then 5%, I could probably find a property in Wisconsin to be relatively accurate with a few number of different tools very quickly. Colavine has bespoke data sets that are owned by Bungalow or other players in the space, and then we’re doing data science on it. That’s a, fairly yeah. Fairly advanced to get that information, so we’re helping with that. We’re helping with you pick the price. We’ll do a full pro forma showing you like with our expected occupancy and price. This is how much you’re going to provide to invest to build out the rooms, if you’d like to do that. And here’s what your returns will look like. So we’ll help build that out. We’ll help you look at, we’ll help you shop. We provide options and in every market that we’re currently operating in to investors.
Market Level Outlook
So markets you’re currently operating in, you said you’re, in a lot of different markets. Are you staying in major metropolitan areas specifically, or what’s your Market levels look like. Yeah, so today we are deploying more units in the metros that we bungalow currently operates on. And so there’s about 12. In terms of properties that are outside of those metros. We have we have a long term plan for a bungalow anywhere. Or we’ll allow our platform to be used anywhere. That’s not currently live and it’ll be done in the future. So it’s something that is coming, but the timing on that is still a few years out. And so I can’t be exactly firm. I could Elon Musk it and say, it’s like 2026, but not exactly sure, to be honest. Johnny what’s one question I should be asking you that I’m not, and it doesn’t necessarily have to be about co-living, it could be about anything. Sure. I think the question is is this the right time to be buying single family rentals at all? I think is an interesting question that we get a lot because interest rates just went up again a little bit. I think we like to see the silver lining in where rates are today as a situation in which there’s way less competition and in January. In January with high interest rates, there’s even less competition. So I personally, in my investment approach, I like to, I’d love to buy between Christmas and New Year’s. That’s because usually someone’s trying to get rid of their home before the end of the year for tax reasons. Otherwise, I wouldn’t have listed in November. So I generally try to see that opportunity. I think we we have discounted rates in the first couple of years to operate and then in year 3. The rates go up a bit for our operations, so we generally try to so that would be the question. So I think. It’s a good time to buy if you can find the right model that will deliver some cash flow stability while you wait for the refinance that we. Believe will be out there maybe 2436 months. We don’t really know the timing, but if you can hold without losing cash, then it’s a really good time to get into properties, especially if you’re leveraging timing advantages. Especially if you’re leveraging demand advantages and. And so that would be my 1 answer to the 1 question.
Connect With Johnny And Closing Words
As we wind down here, Johnny I do have a link that people can go to at thegenerationsofwealth.com, but that’ll get them connected with you so that if they want to work with you, but. What does that look like? What do you offer? How can you help just people in general, my listeners, anyone else? Yeah so you follow that link. It’ll help you set up a time with our investments team. I’m really proud of those guys. A lot of them are investors themselves or have sold a lot of investment focused real estate, so tend to think of them as very knowledgeable and helpful, right? So worth it’s worth it. The book is just to learn, I think and they’ll help you start the process. They’ll help you look at what co living is. They’ll help you think about what the out of pocket cost and the long term results. And so we’re offering anyone that kind of mentions this podcast, 2, 000 in construction credit. A lot of times these homes, people will modify them or do construction after the purchase, and we’ll go ahead and offer that for folks. And yeah, I think it highly recommend folks set up a call with Sean or Umberto or any members of their team, and we would. I would love to talk to you.
Important Links
- Reicot.com
- Govoyage.com
- TheGenerationsOfWealth.com/FBGroup
- TheGenerationOfWealth.com/Homeroom
- TheGenerationsOfWealth.com/YTChannel
- TheGenerationsOfWealth.com/Instagram
