PadSplit Explained: Turn Single Family Homes Into Multifamily Cash Flow

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PadSplit is changing the game for real estate investors in LA — especially those using the BRRRR strategy. In this episode of the BRRRR Investor Podcast, we sit down with Devon Aguirre from PadSplit to unpack how investors are turning single-family homes into multi-income rental machines. Learn how PadSplit helps landlords earn $6,000+ per month by renting rooms instead of entire homes, and why this model is a smarter alternative to Airbnb in high-cost markets like Los Angeles.

Devon walks us through the PadSplit model, how it fits perfectly with the BRRRR method, why co-living is rising in popularity, and tips for room setup, pricing, and risk management. Whether you're a seasoned investor or just getting started, this episode delivers must-know insights on making PadSplit work in your market. Plus, we share real-world property walkthroughs, financial breakdowns, and comparisons to Airbnb. Don’t miss it!

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🔎 Learn more about PadSplit, visit: https://www.padsplit.com/hosts?referral=E982002C

📩Grab your FREE SOP for analyzing deals here: https://gqr.sh/QKAY
🌟Be part of our growing real estate community on Facebook: https://gqr.sh/YnKK👉Subscribe to my YouTube channel: https://alexnahleonvideo.com
🏡Check out our next Real Estate event here - https://shorturl.at/jEO46

Transcript

Alex Nahle [00:00:00]:
Welcome back to the BRRRR Investor Podcast, where our mission is to empower aspiring real estate investors in their journey towards building generational wealth. All right, I'm super excited. If you haven't heard of PadSplit, or even if you have heard of PadSplit, you want to stay tuned, you want to listen till the end, because you're gonna learn a lot right now from Devon Aguirre. Devon is joining us from PadSplit. So, Devon, thank you so much for taking the time and joining us today.

Devon Aguirre [00:00:26]:
Yeah, man, thanks for having me. I truly appreciate it. I feel honored to be on the podcast for sure.

Alex Nahle [00:00:32]:
And we truly appreciate your time and the support that you've been really giving the community. Because this is a very fairly new model, at least, you know, for us here in California and in the LA area. You and I connected about a few months ago. You came to our event and as I mentioned to you, you know, I was very intrigued with the PadSplit model. I learned about it a few years ago back at one of the Bigger Pockets conference, and I was just bummed it wasn't out here in LA, but I was waiting patiently waiting patiently, and now here you guys are. So I just want to kind of share a little bit of my experience about it, the way I see it. And, and I want to make sure everybody out there that's listening or watching this is. This is a new trend here in LA. It's an investment model that you can apply to your rental properties. The cool thing is it goes hand in hand with the BRRRR strategy that we continue to work on and continue to preach. And it's going to be. It's going to be a game changer because not only that, you can apply it as a BRRRR, it's like an extra layer of protection, in my opinion, or like risk management. But it's also going to help those that have the fear of investing in the LA market for multiple reasons. Specifically for the reason that, you know, typically properties in LA, the rent does not satisfy the mortgage per se. Right. So the thing that I like most about PadSplit, and the way you guys put it, is, you know, generating multifamily rent rental income from a single family property. And that's something that we truly advocate a lot about with our investments and the investments that we help our clients with is because you want to, you know, you want to add value, you want to add different ways to get multiple streams of rental income in LA so you can be able to stabilize the property easier and then, you know, work on the appreciation and focus on the appreciation. So with that said, Devon, if you can share a little bit about yourself, how you got started and tell us about padsplit.

Devon Aguirre [00:02:24]:
Yeah, thanks. So I started off in the real estate industry pretty much right out of college. I grew up in Southern California, went to Long Beach Poly High School, grew up in Long beach, went to Cal State Long beach, studied history which didn't really pan out that well. I mean I loved, I don't regret it at all. It taught me a lot of stuff but wasn't really the most money making avenue. So went into real estate. Started off in the title insurance space. Worked my way up from like just working in customer service to then ended up in sales but always at like prop tech startups. So the startup title company then ended up at a, another prop tech company that was like an agent referral service. And then now I'm over here at PadSplit. But yeah, I've worn a lot of hats throughout the industry, the real estate industry. I was a loan officer for a small period, title rep. I actually have my broker's license as well. So yeah, done, done a lot of the, the, the aspects and the, the different parts of the, of like a real estate transaction. So super familiar with how real estate works but definitely this is a new concept in, in as far as like the platform, but definitely, you know, I've even lived in a co living property before that we kind of made ourselves. So you know, it's definitely fun and exciting to kind of get back to the roots a little bit while also tapping into my experience.

Alex Nahle [00:03:46]:
That is awesome. I mean talk about wearing multiple hats, right? I, I, I mean learning that about you. I mean obviously I knew the title and the, the extensive experience you had in real estate, but then having broker lending, all that stuff, how do you feel that contributes to your ability to connect with, you know, the community and talk about Pad Split?

Devon Aguirre [00:04:07]:
Yeah, I mean I think to be honest, like one of the, one of the biggest benefits is that 9 times out of 10 like I can provide a lot of value for people. And that's, that's really what I try to do is like if somebody has a question about title they, they don't feel afraid to ask me, right. Because I have title insurance experience, they ask like I can have basic conversations about lending, like it's been a little while since I've done that. But you know, I know, I know what DTI is, right. Things like that. And so really at the end of the day like that, that background of experience, especially in the Title Insurance space. I, I, I love the experience that I in that, in that time because it really showed me like, like the way title insurance works is, you know, you're not working with a product that's different between the different brands and companies. It's pretty much commodified. And so you really learn how to like be of value, be customer service, follow through. One of the things that I always say that I've actually had somebody in LA in my role as PadSplit tell me, they said, you know, I was going, I was doing an event on a Tuesday night, I was going on vacation the next day and he, he said, hey, can you send me an intro to this other investor? And I said, sure. When I get back from vacation, Monday comes back, I sent him the intro and he goes, wow, you actually did it. He's like, nobody follows through anymore. And I was like, I just can't do anything else. Like that's just part of who I am. So, you know, between that and my knowledge of all these fields, I think it's really helpful for sure.

Alex Nahle [00:05:31]:
I'm a testament to what you just mentioned because you truly have made this easier to embrace, let's say. Right. You know, whether for myself or, you know, those that are part of our community, investors that we're working with, because it is a new idea, right? There's already fear as it is in investing in real estate. You know, it's a big commitment, it's a big step. And you know, especially investing in LA, people are apprehensive because of the laws, because of all the little intricacies. So there are going to be challenges, obviously there are going to be vacancy, there are going to be things you're going to need to prepare for. It's a business at the end of the day and investing in general, you have to prepare for that. However, you made it really easy. I mean, just going back to, you know, the tour that we did when we, we drove around to the properties that we had recently acquired and we had our idea in mind was, you know, because we were just fix and flipping or buying and holding. So those were going to buy and hold. And we said, you know, this, the PadSplit idea came about. I'm like, why don't we just give it a try and see how it works. So when you went to the properties with us, it was a huge eye opener. I mean, I have experience, however, you pointed out things that to me I wouldn't have known because I don't have the background of the co living Aspect. So that was very, very generous of you. That was something that truly helped out and that's a way that for a new model like that, for it to be successful, that's the kind of service that you would need. But you definitely do go above and beyond and we appreciate that. And I know right now you're still getting calls from some of my investors that are just to kind of, you know, guide them through. So it's good to know that we have you as a resource.

Devon Aguirre [00:07:19]:
Yeah. And that's one of the things like, you know, I get a lot of times people ask me like, well what do you do for PadSplit? But like, you know, I know you're here, you're wearing the hat, you know, and I tell them, I say like, really? My job at PadSplit is twofold. The first is like, because it's a newer market in Southern California, you know, I am a marketer, an educator. Right. I like to say I'm a PadSplit evangelist, spreading the good word of pad split around. Right. And the good word of co living. But you know, at the end, once, once that role is accomplished and I get the word out, really my role at its core is to help investors get from zero doors on our platform to 12 doors. So you know, I walk properties kind of like what you mentioned, you know, I, I give advice, you know, as much as I can. I don't have any general contractor experience so I usually tap into other, other resources there. But you know, I give advice, I help consult, I do a real consultative approach. So like I always tell people, like, I'll tell you if this isn't going to work for your property. At the end of the day I try to be as transparent as possible because at the end of the day, you know, I'm not trying to trap somebody into something that's not going to work for them or anything like that. So I get them to, from 0 to 12 doors and once they get to 12 doors, we have another team that kind of specializes in higher portfolio clients that they can help them fine tune things and things like that. But especially for those early on that onboarding experience, those first one or two properties, that's where you know, my expertise is. But yeah, so that's, that's what I do.

Alex Nahle [00:08:50]:
And you know, the things that you pointed out, I mean like you said, having a second set of eyes is always good, especially from your perspective. I mean you've seen, you've, like you mentioned you've lived in a co living, you've seen other co livings, you've seen, you've heard success stories and failures, of course, and you pointed out some really cool strategic things as far as, you know, have. If you have multiple bedrooms, how you price it out, how you market it right, for. For you to achieve success rather than, you know, if you have like, let's say eight bedrooms, don't put them all on at the same time. Some of the cool things you mentioned, which, you know, we want to share with our listeners and viewers, like, you know, having a private entrance, that's going to be a plus. It's gonna, you know, allow you to get more income, having a private bathroom and so forth. So those are good things to know because it helped us. And when we went on the walk through one of the properties, I thought I had three bedrooms in it. And after we left there, you and I decided, you know, it's. It's easily 5 right in the main house alone. So that's very exciting. Another thing that you, you pointed out to me that I, that sticks to me until now is, you know, one of the bedrooms that we had was very nice and big, and I was like, perfect, let's make it luxury. Let's put in a huge bed in there. And then you brought up a great point that that's not a great idea. So do you want to touch on that? What do you feel some of the things that, you know, are minimum that you should put in a pad split, what you should avoid, and a little bit about the common area that you shared with us.

Devon Aguirre [00:10:19]:
Yeah. So at the end of the day, like, the platform is really customizable. Right. Like the, like we don't take title to properties or anything like that. Right. We don't own. So at the end of the day, we are just the marketplace. Right. We connect the investors with the tenants and we call the investors hosts and the tenants members. But we kind of give basic requirements as to how you need to set it up. But we have plenty of hosts that customize it completely out on their own. So as far as, like, furnishing a pad split room, you need a bed, a nightstand. You don't need linens. Right. You can provide linens, but you don't have to. A bed, nightstand. And then if the room does not have a closet, it needs a wardrobe or a dresser. That's kind of the basic minimums. Now. Now what I always tell hosts is, you know, if you set it up like a prison, you're going to be. You're only going to be able to charge prison rates and you're Going to, you're going to get prison people, right? Like at the end of the day. So, you know, elevating it enough without breaking the bank. You know, obviously everything's a balancing act on how much capital you want to put into it, but you also don't want to go too far. You know what I mean? If you spend $15,000 furnishing each room with luxury furniture, you're probably not going to see ROI there, right? So what you want to do is have things that are like, durable that you know are easily replaceable just in case it is still a rental property at the end of the day. Don't put grandma's antique furniture in there that you're going to be upset that it gets scratched. Right? Stuff like that. And then, you know, when we're talking about like a super large, like master bedroom or something like that, while sometimes it is easy to kind of say, yeah, let's go high end, let's, let's do that, you have to think, I always tell hosts, put yourself in the shoes of the renter, the member, right? Like, would you pay X amount for this? And if the answer is no, you're probably in a bad spot. So you just need to consider that. And some people think like, co living is like this magic bullet where you can say, like, oh yeah, I'm going to get $4,000 a month for a room. And it's like, you have to kind of think about it objectively and say, like, does that make sense in this area? You know, well, if a studio apartment's 2500 and you're trying to charge three grand for a room, what are you doing to that room to make it worth that extra money? But you know, like, if we get to, if we see a big, huge master bedroom that you might be able to divide out into two rooms, you have to kind of do the math, right? So if you're like, hey, this master bedroom could get me 400 a week and I could divide it into two small, way tiny rooms and get 175 a week, that doesn't add up, right? It does diversify the income stream more. But at that point, like, we find that like, really tiny rooms, unless they're priced appropriately, tend to take a little bit longer to book. So you just need to factor that in. Like, I, I walked through a property in Huntington beach with a host that recently onboarded, and I was walking through it and I go, hey, why don't you put a room right here in this living room? And the, the host, you know told me, she said well, it would be a small room. And I said, well, what's it going to cost to put these walls up? You know, 2, 3, $4,000 at the most. You're even if you're getting 20, 30% less than the other rooms in the property, you know you're going to pay back that money in two, three months easy. So why don't you just do it, see what happens. You know, even if you get a little turnover, you, that was revenue you were never going to capture before anyway. And what that did was it took it from a four bedroom to a five bedroom property. And so now there's a little bit more wiggle room. If you, if one room goes vacant, you still have another room bringing in more income. And yes, it's a little tinier, but it filled that Property went live two, three weeks ago. 100% occupied. Right. So what people don't kind of think sometimes like why would anybody rent this small room? But if it's like, if it makes sense, you know, it's, it's 700amonth, you're never going to find anything like that anywhere nearby, then somebody will do it. Now if you have all your other rooms at $1300 a month and then you're trying to get 1250 for the tiniest room known to man, that's a closet, you know, essentially it's probably not going to make sense. So you just have to temper those, those expectations appropriately. Now when it comes to common areas, kind of like what we talked about, like you want to have like a dining area somewhere for them to, you know, the members to be able to eat not. And it kind of discourages them from eating in their room. So that way you cut down on like pests and things like that and stains or whatever. But at the end of the day, we recommend against having carpet in general, we recommend having like laminate or you know, SPC or something. So that way it's easily cleanable and it's more durable. But at the end of the day like common areas we find are just tend to create more issues than they solve. So like having a living room with a couch and a TV sounds great. But like I remember when I used to have roommates, everybody was fighting over what who could use the, the living room for the tv. Right. If you could, that a couch tends to invite your buddy to sleep over. Right. So you're like, oh my buddy's just gonna sleep on the couch. And they just do it without asking everyone. And these people are strangers at the end of the day. So you, you know, they're not like buddies that are all cool with each other that would be okay with that. Like they have to kind of be realistic in the fact that this is a shared space. And so by removing that common area, it removes that temptation and for the investor side of things, it brings in additional revenue. Now, now you're cap, you know that, that 100 square foot living room to you know, 150 square foot living room, whatever it is, now you're capturing another thousand twelve hundred, thirteen hundred dollars a month depending on how, what the size of that room is that you would never have gotten before. And on top of that you have more vacancy risk diversified now because now instead of maybe four you have five, instead of five you have six. And then on top of that, one of the biggest benefits, you kind of reduce the, the, the pain of that early fill up, right? Because now you're, now you're filling those rooms faster, you have more of that revenue. So that's, that's probably what I would say is like one of the, some of the biggest tips when it comes to common areas and larger spaces. You just have to kind of be realistic with how you structure them.

Alex Nahle [00:16:13]:
Great points. And you know, as you mentioned, as far as, you know, the ones that we've been working on so far, you know, we have the three, one of them is pretty much on the market. And then the two others, as mentioned, we're getting them furnished this weekend. So this way we launch hopefully next week. Just to kind of go through them. One of them was a three bedroom, you know, we walked through it. We easily can get comfortable five bedrooms on that specific one. Just to do a little bit hypothetical numbers, conservatively based on the area that we saw, conservatively about 1200 is a room a month to be conservative. Obviously one may get more because it has a private entrance, it's bigger and it has its own bathroom. So we can adjust it. So that's about you know, 6,000 for a house that originally would have gotten 3,500, right. 4,000 on a really good day. So that's awesome there. Now the other cool thing about this particular one is it has, it's going to have an ADU. That was the plan, you know, is BRRRRing the property, renting it out, doing the ADU and then building out the second home in the back. And same for the other two properties. Three bedroom with an ADU. We turn, we're going to turn it into four, possibly five on that one. And then the last one is a four comfortable four bedroom. We decided we want to keep it comfortable for we don't want to like, you know, add any additional bedrooms even though we have the space because of that area might be bring a higher end type of client. So the, the thing that I want to add is, you know, we had an ADU play on each one of these properties. And what we discovered and learned and talking to you and touring the properties with you is the ADUs may not be ideal for PadSplit. Right? And you know, you have to be strategic about what you're doing and going with PadSplit. Like for us it's very, very strategic. I don't want to get too deep into it right now as far as like exit strategies, the options it gives you, the risk management as far as having tenants, you know, long term tenants versus like midterm tenants and so forth. So there's a lot to really consider. But the cool thing is for like, for that house that we just mentioned, you know, the possibilities are there to get 6,000 in income from the main house, at least 2,000 in the ADU and then do the numbers there. And that's just, you know, scratching the surface of the potential of this particular property. So it really adds up and it makes a difference from, you know, renting it long term, having to deal with, you know, potentially either a bad tenant, somebody that doesn't want to leave. You know, for me, I mean, obviously we're going to go into it, we're going to discover a lot of, a lot of different things. And, and the other aspect is, you know, vacancy, having vacancy, you know, one or two rooms versus having your whole house vacant, it's going to be difference on the cash flow and sustaining the property.

Devon Aguirre [00:19:08]:
So, and, and to be honest, that is one of the more common plays I'm seeing in LA right now is a lot of our hosts, you know, when they're acquiring a property, they will, they do have that ADU in the back of their mind. They're like, I'm going to buy this house, rent it out and then build an ADU in the back, rent that out. Right? And you know, when you say like ADUs won't work, I won't say that. They'll never work. Right. Really what it comes down to is like if it's a studio or a one bedroom ADU, it's just, it doesn't make sense to go with pad split. It just would make more. And I'll tell people that I'm like, hey, just Airbnb this or Put it on long term rent, like it's like we can help you with it, but it just probably will take a little bit longer to book because not as many people are coming to our platform looking for that. That and you know, once you pay our fees and things like that, it might not pencil out. It'd just probably be simpler to do it the other way. The real benefit of pad split and co living is when you have multiple bedrooms in a property. Now we do get two bedroom units all the time because people are like I'm just struggling to fill it. I'd rather just put it on this and see if you guys can help me. And you know, like If I wanted $2,000 for this two bedroom ADU, now if I rent it out via pad split and I get same $2,000 a month in revenue, at least it won't ever be that I have two rooms vacant in the whole ADU and now I'm $2,000 out a month. I'm only out a thousand dollars a month or whatever those numbers may be. And really like the, that's, that's one of the key concepts. So you know, the ADU, you know, being separate, that's totally fine. And that works really well. And the, the common example I say is like if you have like a four bedroom property that you would have rented for $4,000 a month and you know every month that it's vacant, you're losing $4,000 a month. But even if you don't do anything else to the property and you have four rooms in there rented out at say $1,000 a month, one person leaves, you're still making $3,000 a month in revenue. And versus if you're able to add five or six bedrooms and let me step back, realistically, you're probably not going to get just a thousand for those rooms. I can get like 1200. So now four rooms instead of $4,000 for a 12 month rental, $4,000 a month on a four bedroom house, now you're getting 4800. Then you add a fifth bedroom, now you're looking at 6,000. Now you had a six bedroom, you're adding, you know, you're at 7200. And one of the big things I tell people when I walk through property is they ask me like how much of a renovation should I do for a pad split. And Alex, you kind of suggested the same thing without me even talking to you about it. Like I wouldn't say like add a second story unless the numbers really make sense, right? But it's like, hey, there's an easy wall we can throw up there. You know, we walked a property to that property with, you know, where the wall is half built already because it's the separation from the living room to the kitchen. You know, really, you're just filling that in. You know, it costs a couple, you know, a thousand, two thousand bucks to do it. And now you're, you're building a room out. So easy additions that can then add another room is really where we say that's the way to go. And those aren't required. We don't require you to add a bedroom. It's just, it usually makes more sense for you. So especially on the acquisition side, finding rooms where, like, living rooms can easily be walled up or extra rooms can easily be created, that's going to be the biggest money play there. But saying, like, oh, I have to, like, restructure everything in the house, like, if you're okay with that, that can make sense, like, pretty much gutting the inside, or if you're planning on doing that already, then maybe now you think about your plans differently with a pad split in mind. But, you know, for most people looking to acquire, they don't want to take on that big, that big project. So easy walls are the way to go.

Alex Nahle [00:22:36]:
Yeah, Very small investment. Like you mentioned, I mean, putting up walls doesn't take as much time, and it's, it's fairly small investment that you can get a quick return on it. One thing that I've been hearing a lot, you know, when, when we talk about pad split, is people bring up Airbnb. How does it compare to Airbnb? Is this another thing? So do you hear that a lot or is it just me?

Devon Aguirre [00:22:59]:
So this kind of goes back to my first hat of being an educator and, and a pad split evangelist is so many people think, oh, it's like Airbnb. And it is similar in that we're a software platform, right? Like we're a tech platform, but that's kind of where it ends. And in real estate, I guess. But at the end of the day, like, our, our demographic, what we're advertising towards is not tourists or vacationers, right? And so what we are, is we're connecting those investors with people that are looking to rent essentially like an apartment. They're not, they're not here for two weeks, and they just want to book that. I think where that common misconception comes out, too, is that we collect our payments on a weekly basis. And, and so people think, oh, it's weekly stays. And that's not what it is. They commit to 31 days in the property, 12 weeks on the platform when they come aboard. But our average stay on the platform nine months. And really we get long term tenants regularly. Like there's several pad split that I know personally that have had tenants for, you know, two or three years, you know, and that did that. Average duration and average tenure will probably keep getting longer and longer because we've only been operating since 2017 and we've truly started scaling about two years ago. I think it took us till 2024 to hit 10,000 units. We just crossed 25,000 units two days ago. And the goal is to get to 30,000 by the end of the year. And by the end of 2026 we want to get to 60,000 rooms. So you know that that duration will start to extend and extend. And especially because I think some of our early operators and co living operators on the platform like we started in Atlanta, I think they had a different mindset about it. They were like, I'm just going to cram every single possible room into here and make as much cash flow as possible. And now some of those early properties are kind of getting phased out because now you have more experienced operators who are coming on board who have built properties for pathway or know what they're doing, know what they're doing a little bit better as far as the renovation. And they know people don't like necessarily want to rent all just cubbies. You know, they're like, okay, rather than going nine, I might go seven and make these all a little bit more comfortable and then I can charge more. So I actually make more money at the end of the month versus these super tiny rooms. And on top of that they, they keep the properties a little bit more maintained. They know what they're doing, they're working with a property manager or they, they're just, you know, taking care of the properties better than some of those early hosts were. So I think that that's, that's going to be really something we see over the years is that that tenure length really extends.

Alex Nahle [00:25:25]:
And it really comes down to understanding your market and the end user. Right. I mean by knowing who's going to rent out those rooms, you really want to cater to that. And similar to like when flipping a home, right. A lot of people tend to overspend on the property, just want to make it beautiful, but then don't realize that you want to make it, you know, fit in the area that it's in. And for the end user that's looking for it. So that. That's something very important to, you know, as far as keeping costs down, so. And really treating it like a business, like you said. I mean, when you're going to have a lot of options, people are going to want to go where they feel comfortable, you know, staying and obviously staying long term. So it's good to know. And. And I catch myself sometimes, too, you know, when I'm sharing about PadSplit with. With others is, you know, it is a midterm and so forth, and they say, oh, so they can stay longer. Well, they can, right? They can if they want to. And then if you provide the amenities and the comfort for them to stay, because that's the goal. Right. What is the. Yeah, sorry, go ahead.

Devon Aguirre [00:26:25]:
I was gonna say. I was gonna say, well, one of the big things, too, is people think like, oh, this is all students, right?

Alex Nahle [00:26:30]:
Yeah.

Devon Aguirre [00:26:30]:
Should I buy this by. Should I do this by college? And I say yes, actually, the average age on our platform is 34 years old. Wow. So it's just working adults that, you know, like, I will say it's hard to put yourself in those shoes sometimes because, like, for me, I have a wife, I have three little kids. Like, pad split would not work for us. Like, we're, you know, I need a house for all these, you know, kids that I have running around and things like that. And, you know, our platform doesn't really allow kids and single people in these rooms. And so if you're not in that position, you're like, who. Who are these people? It's hard to understand. And then you realize, like, it's divorcees. It's people that just want to scale down. We have seniors that are like, hey, I don't want to manage a house anymore. You know, and they're just going to kind of live in there. They'd rather live in a smaller space, so that way they don't have to manage and save money. Maybe on, you know, they're just on Social Security or something. And I mean, you do get some younger people, right, just starting out and things like that. But, you know, waiters, bartenders, Uber drivers, delivery drivers, all these. These type. These walks of life, but that just, you know, are looking for something cheaper than what a studio or one bedroom is without necessarily sacrificing on the quality. So because it's a shared space that's. That's a little bit better maintained, you know, they're not living in somebody's closet illegally or. And then on top of that, because we have our platform and we vet and screen all these members. They feel more comfortable doing this than going through somebody on like Craigslist or something because you never know what you're going to get. You're not signing a 12 month lease with a bunch of strangers. So they're more willing to kind of take a chance on it.

Alex Nahle [00:27:58]:
Yeah, it's brilliant because I do get a lot of people saying, oh, is it for students who are my, who's going to be the clientele, who's going to be moving there? So yeah, it's something that, you know, just keep bringing the awareness, educating, informing them and you know, yeah, you have more options. I mean nothing wrong with students. It is somewhat of, you know, midterm temporary thing because they tend to move. But there are other options too, like traveling nurses and so forth. So, so that's very. Yeah.

Devon Aguirre [00:28:26]:
And, and students, what they tend to do is they'll do this like right by the room and they'll, they'll go, but they'll go with their buddies. You know, they'll be like, hey, you know, three of us, you guys want to go rent a four bedroom place? And yeah, and we'll. Or they'll even share the rooms. Right. Like that's what I did in college. I shared a room with somebody. So the two bedroom condo and there's three of us living there. The rent was like crazy cheap. It paid like 300 bucks a month. So it made sense at the time. But at the end of the day like we all did that because we were friends. Right. So would you really, would the student maybe go and try to move in with strangers? Maybe. But more than likely they're going to do that with themselves. So that's actually where I tell people like I wouldn't even look at student like around student like colleges and things like that. Unless you know, you're going more for like the people who work there only because, you know, students also tend to like to party and stuff like that. So that's where it can get a little sticky.

Alex Nahle [00:29:17]:
Sure, good point. So just to kind of share a little bit about, you know, the platform, my understanding of it in case, you know, there's still people listening or, or watching this episode and really not sure. So PadSplit from my understanding. It's again like you said, a tech platform. Right. It's a platform to legitimize the co living process to be able to help landlords market rent by the room. Right. And collecting the payments. It's a platform also that allows communication amongst you know the landlord and the, the members as well as amongst themselves and so forth. So it's a great way for, you know, moms and pops landlords as well to, to be a little bit more hands on because it does allow that, it does allow them to interact with, with others amongst the platform. However, you don't manage the property. So that's one thing we want to make sure, you know, were clear about that. PadSplit is not a property management company. You would have to either, you know, connect with a property management company or connect with some like a team like ourselves that can help guide you through the process and, and help you manage it or manage it yourself. Right. Do you get a lot of resistance around that?

Devon Aguirre [00:30:29]:
I mean that's one of the biggest confusion points I think is a lot of people are like, well if you don't manage the property, what do you do? Right? And you know, what we do is we, we really simplify the, the co living investment. So I always tell hosts like if you want to try this by yourself, you can like, you know, it's going to be a little bit of a struggle but at the end of the day like we make it easier and really what our platform is designed for is to like help people scale in co living. So you know, I just talked to recently, I talked to a host in Riverside who has a co living property. He's currently operating, he has six bedrooms in the property and called me because he had one room vacant and he's like, hey, so like, you know, can you help me with this? And I told him, well, you know, it seems like you're doing great, like what do you need me for? And he goes I actually want to do this again. I'm in contract on another property but I never want to do this again by myself. He was like, it was such a pain in the butt to have to like spool up marketing every time you get a turnover or anything like that. How to set this up in the first place. Like you guys have so much resources to on guidance on how to do that. And then on top of that he was like managing all these leases. It's like it is more of a headache. So when the traditional real estate rent, like landlord thinks about this and they go, I have a one, you know, four bedroom property, why would I make do take on the extra work for four, you know, tenants. And yes, doing it by yourself, that is just going to be a lot more work for probably very little return. But using a service like ours, it helps you relieve a lot of the administrative work. Because you know we advertise, we're always advertising for our inventory so you don't have to spool up a whole advertising toolbox to advertise one room. You just let let us know that the room's vacant now and we start, we start advertising. So that was specifically. But we're already in all the places that you need to advertise for room for rent. And I think that's one of the biggest things too is people don't realize that it's totally different than just throwing a rental up on Zillow. Like you need to advertise in different places. You know, Zumper roomies like where we, we co list all our listings on those websites and then we also do like Google SEO and social media ads everything to kind of drive traffic. But then we also do the screening and the income verification and the credit check. So a lot of the people that are co living operators that are doing this by themselves, it becomes a full time job to handle all the Zillow inquiries, right? The 900 Zillow inquiries for your listing and people want to come see it and they flake and no show. And I just talked to another host, she lives in Laguna Niguel and her property in Long beach and she's like every time I have to drive up 45 minutes to do a showing and then they say nope, not for me. Or they say, you know, or they don't show. It's a huge time suck. With our model, the bookings are sight unseen. So that's why I always tell hosts like take professional photos. If you can take a clear, at least clear, well lit photos. No photos from your flip phone from the 90s with your potato with the camera on it, right? Take clear photos, have a good listing description, one that says in the title, you know, furnish and utilities included. Because what that will do is once it gets populated onto all the other listing sites, it people are like oh what is this? And they click into it and then if they're on our website, on their, on our app already, I tell people the photos are what's going to sell this thing. Photos and price are what's going to grab eyes up front. And especially in LA, we don't have that much inventory yet. So price isn't as much of a factor. So you do kind of get to set the market. But when they're looking on the app and there's four properties they're going to look, what's going to grab their attention first is that photo and they're going to say, oh, I want to see that. And then they see all the other amenities and the description and everything like that. So all these tips and tools and everything like that is what we provide to make it simpler. So we serve these people up essentially on a silver platter and say like, hey, do you want these people in your room? And if you say yes, you send them a code to move in. And it's simple. So no showings, no open houses, no, none of that. And so to manage one co living property, like I said, is probably possible by yourself, but to do 10, even five, three, right. You're gonna, this is gonna be a full time job. And most people start investing in real estate not to create another full time job for themselves, but to get that financial freedom to be able to do what they want, to be at the beach. Right? And that's where like, if I talk to most people, I say, at two properties, you're probably going to need a property manager. And we have specialized property managers that we work with. You know, Alex, I think you're going to help some of these investors manage these properties as well. And having somebody who understands the model and can kind of be responsive. You know, usually property managers charge a little fee as well. But what's your time worth at the end of the day? Like, you know, 45 minute drives from Laguna Niguel to Long Beach, Is that worth it versus like 7% or whatever a property manager charges? I think so. And yeah, I mean that's, that's where I'd say, like where we come in is we really do help people like turn this into a business, scale it up, make more money.

Alex Nahle [00:35:14]:
And the key word there really scale, scale it up, right? I mean, if you're going to do it yourself, you just look at the opportunity cost and, and you know, the vetting of the, the way you, you shared with me the vetting of the applicant online site unseen, you have many ways of, you know, vetting them. It makes it so easy. You accept them with a click of a button. So I'm really, really excited about this. Again, this is, you know, a new journey for many, many of us. It's a, it's a great thing for real estate investing in general, for the real estate space. If you, you've seen what happened with Airbnb, you know, you guys are on the right track, you guys are growing and you're doing it in a very cool way. You're connecting with the communities. We're going to be sharing you know, a link below. But I know you have multiple events and how would, what would be the best way you want people to reach out to you? If they have questions, if they want to connect with you? What's the best way?

Devon Aguirre [00:36:12]:
Yeah, so if you know you want to, you can text me or call me on my cell phone. I, I've been in the real estate sector for so long, my cell phone's long been blasted on the Internet. So I'm okay with that. It's 562-673-3673. Just shoot me a text. I always tell people, like sometimes calling, you might get a call back in a little while because I'm usually in a podcast or I'm in a call with someone else, you know, I'm consulting with someone else, I'm drawing, I'm walking a property. So texting is usually the fastest and easiest way to get a hold of me. And then from there we can book a call or something like that. And then I also have a meetup group on, on Meetup, the meetup site, it's called PadSplit in SoCal. I post all the events and things like that that I attend and that I are, that I'm presenting at or that I host. I don't post everything I attend because I don't want people stalking me. But you know, if I'm going to host an event or I'm going to post or I'm going to speak at an event, it'll be in there and it gets announced. And so when you sign up, you'll get those alerts. My new events launch. And so once a month I try to do an event called PadSplit and Pizza where I speak for. I do a quick small presentation about PadSplit and then I have several people that we work with like a realtor, a lender and a property manager come on board and they talk about experiences with PadSplit and stuff like that. And then I also do a monthly webinar so if you go on the meetup group, you'll be able to sign up for the webinar. And in the webinar I do more of an in depth presentation about PadSplit as well as some case studies. And then but so I try to keep it, change it up. Like if when I do these presentations other than the PadSplit and Pizza, the PadSplit and Pizza is more panel related so it's more other people talking about their expertise. But when I do my presentations like we did at your office, I talk mostly about PadSplit and numbers because some People want to see, like, how is this possible? And that's one thing I noticed. I would talk to people all over LA and Orange county and the IE and they're like, this sounds great, but like, can you even make the numbers work? So I find listings on the MLS and I run the numbers. I don't get deep into expenses because everybody has their own ways of acquiring these. And then I just show them like we, like at your, at your office. Alex. We did a property had seven bedrooms existing. It was easily able to add two bedrooms. You went from like around $5,000 a month in potential rental income to almost 11,000. And I, I ran the rental numbers conservative, so it's probably higher than that. But I like to be conservative. And even the best part about it is I usually try to find something on the MLS so that way if somebody's interested, they can go buy that property. Right? I'm like, hey, here's a deal ready to go. It's prepackaged pretty much for you. And I always frame it as like, hey, if you're a serious investor though, you probably have deal flow other ways. So now you can tweak your buy box to see if you have wholesalers that you're working with or something like that to where now they can send you deals that make sense for PadSplit. And that's one of the most fascinating things about what I've been doing is talking to investors where they see their buy box exposure expand and they're like, I'm going to be in those parts where no one else is and now I can get some deals. Whereas I, you know, before everybody's shopping that same buy box for like a fix and flip and stuff like that. But now you're like, I could potentially buy a five bedroom property and make a cash flow, you know, I mean, I'm sure, you know, you very rarely are flippers looking at five bedroom properties. Usually it's like what, three to four is kind of the sweet spot.

Alex Nahle [00:39:24]:
Yeah. So all the secrets right now.

Devon Aguirre [00:39:28]:
I won't get too deep into that, but you know, that's, that's kind of what I've heard generally. But reach out to Alex if you want to learn how to do fix n flips for sure. But you know, if you want to, if you want to come to one of the presentations, I always say just sign up for the meetup. I don't like pester you or anything. I don't think meetup even allows me to do that. But that way, like when you do see something nearby you can pop in because I try to do the Pad Splits and Pizzas all around. My next one will be in Lakewood on the 30th of September. And then we're actually doing another one at Alex's office on the 21st of October. And they're usually, you know, we get like 20 or three people. So it's, it's not super huge to where you're like afraid to ask questions. And that's like, I love to do a presentation where people are engaging because I hate talking to a wall. So if people are there and you know, I think even at our last event, Alex, we had some people that were kind of shooting us down trying to be real negative and that's okay. Like at the end of the day, this isn't for everyone and I will more than happy to tell you that this is not going to work for your property or something like that. You know, this isn't something like, I don't know, I hate to bash your background, Alex, but you know, it's not car sales where, where everybody. Yeah, it's not like everybody drives a car. Like you need to be an investor in real estate and that's not everyone. And, and so yeah, so reach out to me via text once again, 562-673-3673 or join my meetup or, you know, I'm sure Alex is going to share a link. I think if you, if you go through Alex's link, it'll connect you directly with me and then we can schedule a call as well.

Alex Nahle [00:40:57]:
Absolutely. Yeah. And we'll definitely put the link to the meetup as well in the comment section below. Encourage you to check out Devon's meetups. We try to do a lot of collaboration together as well. You're extremely generous with your time again, it's very strategic. There are a lot of opportunities in today's market. Looking at the usual may not cut it. But now get creative. So truly, truly appreciate your time and if you enjoyed this episode, please subscribe to the channel and check out other episodes that we have as well and hope to see you if you're in the LA area. Hope to see you at one of our events again. Devon, thank you so much. And until next time.

Devon Aguirre [00:41:36]:
Yeah, thanks for having me.

Alex Nahle [00:41:38]:
Thank you all for joining us on the BRRRR Investor Podcast. If you found today's episode helpful, please hit like and subscribe to our channel for more real estate insights. We love hearing from you, so please leave your thoughts, questions or topics you'd like us to us to cover in the comments section below. Be sure to check out our website, thebrrrrinvestor.com and also follow us on social media at @thebrrrrinvestor. Keep learning and investing and we'll see you in the next episode. I'm your host, Alex Nale. Stay invested.