Co-Living: $1,000 Monthly with Your Initial Co-Living Rental Property

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      Imagine generating $1,000 to $2,000 monthly in cash flow from just one property, needing only three homes to replace your W-2 income. Sam Wegert found this path 14 years ago when he began house hacking a single property. Today, he manages over 200 rooms in his co-living portfolio, all passively operated while he resides overseas. Co-living involves purchasing a larger house and renting out individual rooms instead of the entire property, which can lead to earning $1,000 to $2,000 from a property designed for co-living, as opposed to just $250 a month from a conventional single-family rental.

      From the Scale Your Co-Living Real Estate podcast and ScaleYourRealEstate.com, Sam Wegert reveals how he transformed a simple house hack into a successful six-figure business focused on affordable housing. (Join his Free 5-Day Co-Living Challenge to cultivate the mindset for success as a Co-Living investor!)

      Listen to Episode 721 of the Side Hustle Show to discover:

      - How co-living can generate 4-5 times the cash flow compared to traditional rentals

      - The method for converting homes into lucrative co-living spaces

      - Innovative financing techniques to start with minimal investment

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      The Cash Flow Math That Changes Everything

      Sam recalls the conventional wisdom from real estate investing communities like BiggerPockets, suggesting that earning $100 a month in cash flow per unit is commendable. However, he found this unimpressive; at that rate, meaningful income would require hundreds or thousands of units. He recently heard Brandon Turner mention that his cash flow from a billion dollars in real estate and over 10,000 units was "a couple thousand dollars a month." Co-living alters this dynamic significantly. Sam doesn't consider a co-living property unless it generates a minimum of $1,000 per month in cash flow, with the average closer to $2,000 per property. If you manage the property yourself, you can save on management fees, increasing your monthly income even further.

      The Square Footage Formula

      Sam developed a straightforward formula for assessing potential co-living properties based on their square footage. A 1,500 square foot house can yield four bedrooms after converting existing spaces. Although it may seem to currently have only two bedrooms, adding walls and closets in dining rooms, living rooms, and basements can easily transform it. Additionally, for every additional 250 square feet above that base, you can add another room:

      - 1,500 square feet = 4 bedrooms

      - 1,750 square feet = 5 bedrooms

      - 2,000 square feet = 6 bedrooms

      - 3,000 square feet = 10 bedrooms

      Growing up in a 1,900 square foot house with ten people as one of eight siblings, Sam finds it amusing when others suggest he accommodates too many people; sharing a room was part of his upbringing.

      Getting Started with Minimal Capital

      Sam began his co-living journey as he advises newcomers: with a primary residence loan requiring just 3% down. His first home was priced at $150,000, leading to a down payment of around $5,000. He occupied the home while renting out the remaining rooms, employing classic house hacking. The crucial aspect is that new primary residence loans can be obtained annually in the United States. After a year and a day, Sam returned to his mortgage broker seeking another primary residence, intending to convert his first home into a full co-living house. His second loan required a 5% down payment, which was completely legitimate. One of Sam's students devised an even better approach: purchase a home with a primary residence loan, live there with family for a year without roommates, then move out after a year to turn it into a co-living space. Repeat this three times, and you could replace your