1. What is the typical out of pocket investment for a HomeRoom house?
We focus on homes that are priced between $175K-$225K. With our suggested down-payment of 15-20% a typical investor pays between $30K-$40K out of pocket
2. What are the typical Cap rates and cash on cash returns I can expect?
Currently HomeRoom targets 2 Kansas City Metro A Class areas. Each have different projected outcomes:
The newer areas on the Kansas side we project 5-7% Cap rates and 4.5-9% cash on cash returns
In the more trendy but dated Missouri side we project 5.5%-7.5% Cap rates and 5.0-9.5% cash on cash returns
3. If HomeRoom doesn’t charge a property management fee how do you make money?
HomeRoom, the Midwest’s first coliving company, rents homes by the room, while creating a safe community setting for tenants. In doing so we are able to increase the total net revenue for the property. This increased revenue allows us to pass thru no-cost property management and discounted repair services to our investor partners.
4. Since HomeRoom is our tenant, will they be able to pay for the entire 3-years? What about after the initial lease term is over?
HomeRoom was initiated with a stable, cash flow positive financial model based on streamlined operating costs and accurately mapping room inventory against tenant demand. Also, in the event of a market downturn, we’re well positioned to maintain occupancy levels with our extremely affordable room rates. Should, for any reason, additional capital become necessary to support our owner leases, we have multiple sources to access.
We have big plans for long term KC growth and hope your initial lease is the first of many over time. That said, we’ll help confirm the long term value of your investment during the purchase process by also modeling the financial potential of your property in a more traditional landlord/tenant scenario, should you ever need or desire to transition to a traditional property manager
5. If a tenant damages the property - who pays for that?
Not you! Damage caused by the tenants will be covered by the member’s deposit, their required renter’s insurance or by the $3M liability insurance policy that HomeRoom puts in place for each property.
6. How are standard maintenance and repair managed by HomeRoom?
One of the key advantages to having numerous intelligent adults living in our properties is that maintenance issues are flagged QUICKLY. Catching items such as roof leaks, pest problems and plumbing problems can save thousands by addressing them right away.
All maintenance items are reported to us and reviewed by our maintenance team within 24 hours. For small items we will make the repair, notify you, provide documentation, pictures and bill your account. For larger items we will contact you in advance and let you choose between a couple recommended options.
7. Can we talk to your other investors as references?
Absolutely! 100% of our current owners have agreed to be references for us. If you’d like to chat with them - just ask!
Out of courtesy to their time (they’re volunteers!) we ask that you keep your correspondence with them to one email or one 5-minute phone call.