From Waiting Tables to $13,000+/Month in Just 3 Years (Thanks to Rentals)

Three years ago, Andres Martinez was waiting tables. Today, he owns 10 rental properties, manages another four, and has a rental portfolio that brings in over $13,000 in monthly cash flow. He’s even been able to quit his job and focus on his rentals full-time. But how did he pull all of this off—and in such little time? Early on, Andres had one goal: maximize the cash flow on every property he bought. This led him to co-living, an investing strategy where you have multiple tenants under the same roof. The cash flow was so strong that he has deployed this strategy across his entire portfolio. But the journey hasn’t been easy. In today’s episode, Andres shares all the growing pains—from making 200 cold calls a day to find off-market deals to working with shady contractors and navigating difficult tenant disputes. Through it all, his pure hustle and grit have paid off. Whether you’re looking for creative ways to scale your real estate portfolio or create enough cash flow to replace your salary, Andres has a blueprint that works—even here in 2026! In This Episode We Cover How Andres went from waiting tables to making $13,000+/month with rentals How to scale your real estate portfolio faster using other people’s money (OPM) The biggest myths (and truths) surrounding the co-living strategy The number one thing you must get right when operating a co-living property The real estate markets where the co-living strategy works best And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1321⁠⁠⁠. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Henry Washington?

  Three years ago, Andres Martinez was waiting tables. Today, he owns 10 rental properties, manages another four, and has a rental portfolio that brings in over $13,000 in monthly cash flow. He's even been able to quit his job and focus on his rentals full time. So how did he pull all this off, starting in 2024? Early on, Andres had one goal. Maximize the cash flow on every property he bought. This led him to co-living, a strategy where you have multiple tenants living under the same roof. The cash flow was so strong that he deployed this strategy across his entire portfolio. But the journey hasn't been easy. In today's episode, Andres shares all the growing pains,

• 0:43Henry Washington?

  from making 200 cold calls a day to find off-market deals, to working with shady contractors and navigating difficult tenant disputes. Through it all, his pure hustle and grit have paid off. Whether you're looking for creative ways to scale your portfolio or create enough cash flow to replace your salary, Andres has the blueprint that works, even here in 2026.

• 1:09Henry Washington?

  What's going on, everybody? I am Henry Washington. And today on the BiggerPockets Podcast, we're bringing you an investor story with Andres Martinez from Dallas, Texas. Let's jump right in. Mr. Andres Martinez, welcome to the BiggerPockets Podcast.

• 1:23Speaker 01

  How you doing, Henry? Thanks so much for having me.

• 1:25Henry Washington?

  Glad to have you, man. Excited for you to be here. Now, I understand you've been on the Rookie Podcast before, but for those who haven't heard your story, why don't you give us a little bit of your background and how you first got into real estate?

• 1:36Speaker 01

  I've been doing real estate since January 2023. I was working full-time as a waiter. I went to college for music. I studied jazz, as you can tell from my albums here. That did not go well. Not every, every other starting artist I was working as a full-time, as a rest, in a restaurant business. And then I started making pretty good money as a waiter. Honestly, I was, I was very close to the six figures on the years. And then I got married. My wife is like, you need to buy a house. So, perfect, we need to buy a house. And then even though I was reporting all my income, because it was cash, we couldn't really qualify for the house that we wanted. This is the time where the interest rates are just starting to go high. So we missed the three or 4%, but now there are seven and a half.

• 2:17Henry Washington?

  So this was like 2023, late 2023.

• 2:20Speaker 01

  Late 2023, exactly, like November, December. And we missed it because we couldn't find the right lender. So now when we find the lender in December, he's like, well, sorry. Now it's, you know, it's 10%.

• 2:30Henry Washington?

  Oh, wow.

• 2:31Speaker 01

  So I was like, okay, how do you buy a house without a mortgage? So I fell into the rabbit hole of creative finance. I jumped into there. I didn't know what wholesaling was back then. I just started making calls. I found my first deal in two weeks. Take my wife to see the house. And she's like, absolutely not. So I was like, okay. So I told the agent, look, it didn't work for us. Thank you. So, you know, now I was part of a real estate mastermind. So I go to a local meetup and I told the guy, I was like, yeah, I found this deal. I just didn't know what to do with it. And this guy is like, why, why don't you wholesale it? I was like, what do you mean? He's like, you can make money just by flipping the contract. And I was like, teach me. So we go call the agent again, that same, on that same meetup, call the agent, I was like, we'll be, we'll see the property again tomorrow. We go, he runs the numbers. He's like, this is a good deal, man. We can make some money here.

• 3:16Speaker 01

  He get under contract and he showed me how to flip that paper. And I was like, we just make $10,000 in a few phone calls?

• 3:23Henry Washington?

  Yeah.

• 3:23Speaker 01

  I, at that time, when I was doing the waiter stuff, I was flipping furniture online. I was trying to start any type of side hustle, flipping phones, washers, dryers, clothing on eBay, anything I could get my man, my, my hands of, make money. But I never really thought I could make money on real estate because, you know, I, I don't come from a family with money. I'm an immigrant. I've been here since I was 18 only. So when that happened, and I was like, okay, this is, this is, this is it. You know, I saw Doctor Strange and the Marvel movies, you know? This is the one. And I just, I went straight ahead, start calling non-stop.

• 3:59Henry Washington?

  Okay, so you found, you said you found that first deal in two weeks that you ended up eventually wholesaling. How'd you find that deal? Just calling agents on the MLS?

• 4:07Speaker 01

  Calling agents in the MLS. Imagine, dude, three days in the real estate. Yeah, do you want to do seller finance or sub two? No, like I get 500 calls every day. I was like, okay. And then eventually this girl's like, yeah, we had this property on a contract with somebody else, but they couldn't perform. Do you want to come see it? And she sends me the terms. She sends me the mortgage sheet. I got lucky, you know? After 500, 600 calls, somebody say yes.

• 4:30Henry Washington?

  You called 500 to 600 people?

• 4:32Speaker 01

  Every single listing in CLO.

• 4:34Henry Washington?

  Folks, if you are listening right now, that is absolutely not luck. That is hard work paying off. Yes, that seems like a long shot, sure. But if you sit down and you put effort in and you call 600 people determined to get a deal, you're probably going to get a deal. And that goes for almost anyone. If you are in a market and you call the right list and you have that much dedication, you're gonna stumble across a deal. So no, that's not luck. I call that positioning, right? You put yourself in the position to be ready to capitalize on the deal. You got paid to get an education in how to do a wholesale deal. So how long did it take you to land your next one?

• 5:19Speaker 01

  Nine months.

• 5:20Henry Washington?

  Nine months.

• 5:21Speaker 01

  I didn't know that you can pull lists of low equity or seller finance. I was just calling every single listing.

• 5:26Henry Washington?

  Yeah.

• 5:26Speaker 01

  So now I'm pulling lists, I'm making calls, I'm learning, I'm getting better at sales, I'm getting better at my pitch. Nothing, nothing, nothing, nothing, nothing, nothing. Nine months later, it was a very humbling lesson because I was about to give up. Actually, I had given up two weeks prior to that because we went to the doctor with my wife and we found out she was having some hell of a year. So I needed a lot of money. I was about to sell the house. All my servants were about to go there. No more wholesaling. And I was like, because at this point, these nine months, I got fired from my job twice. Because every time a seller called me back on a Friday night, instead of having fajitas on my hand, I have my phone. And my manager's yelling at me, I was like, hold on. If this is the 10K call, I'm about to walk out, right? This is my, my, my real proof of concept. It never happened. So we're driving back from the doctor's appointment

• 6:08Speaker 01

  and I'm just like, okay, I tried, I tried, I, I, I made 200, 300 calls every day manually. And somebody picked up the phone, right? It didn't work. Like, I really did my best. I didn't take it off Monday to Sunday, like, it's not for me. And then on that drive home, I get a text message back. Hey, Andres, this is Andre. You called me a few months ago. You explained me about the seller financing and you were right. The person who got me their contract for this price, they couldn't close. Can you help me out? Because now I already moved out of the house and I am behind one month of the payments. And I'm a human person. And we got under contract and that was my first wholesale assignment fee of $10,000. A week later, I get another message back. Hey, do you still want to buy this house? And then, you know, the cycle of wholesaling, you need to build a pipeline. The pipeline came back to me.

• 6:52Speaker 01

  So I started making money now.

• 6:54Henry Washington?

  This is how direct-to-seller marketing typically works for anything, whether you're gonna wholesale it, whether you're gonna keep them for yourself. When you're doing direct-to-seller marketing, sometimes what you're doing is you're starting to roll that snowball, right? Because you're putting in effort and people are saying no. But you're also giving them the idea that working with you or your creative strategy, or even the idea to think about selling is just now popped in their head because they weren't thinking about it before until you called. And so they said no, maybe because they didn't understand it, maybe because it wasn't the right time. But once you plant that seed, it starts to grow. And then at some point, they may decide, oh, let me call Andres.

• 7:38Henry Washington?

  He called, he said he could do this. Now, now I'm in the right space. So you gotta get the snowball started. And where people fail with direct-to-selling marketing is they quit before their snowball gets big enough to start producing results for them. And so they, they say it doesn't work and they're done. And then they miss their opportunity because maybe somebody else starts marketing in the meantime to that same list. And then those leads that they started to foster end up going to somebody else, man. So that's super cool. So your wholesaling, your proof of concept worked. Then you start popping off $10,000 checks, $7,000 checks, $9,000 checks. So it's working. What did you move into after that?

• 8:19Speaker 01

  When I got started, even before real estate, the, the reason I was doing the side hustles is because I've always wanted to achieve the point that I achieve now, where like I have enough cash flow, I don't have to leave my house. I leave my house right now once or twice a month. I don't pick up the phone for anybody except if it's an emergency for my tenants because now I have AI running everything. That level of freedom for somebody like me who had to start working at 14, right? Who has always depended on somebody else. I wanted to flavor that. And once I did, I realized I really like it and I don't want to go back to being on the hustle. A lot of people think because I hustle hard, it's because I have the, you know, the alpha type. I want to be the big CEO. I want to make the billion dollars. I am very okay making my, you know, 20, 30K a month passive income,

• 9:04Speaker 01

  working maybe 20, 30 hours a month, not having to talk to anybody on the phone. I don't have to talk to sellers, I don't have to talk to agents. But the transition was, it's very interesting. So going back to the beginning, on that deal with the real estate investor, we went to the home and he's like, okay, I will make this work, but I need to put 10 rooms. I was like, absolutely not. You're not gonna raise money for that. You're gonna borrow from somebody money. You're gonna steal it, then you're gonna walk away. No, I passed on that deal. But I got me thinking, hold on, maybe there is something here, I don't know, about room rentals. And, you know, I'm already part of a mastermind. So I start talking with people. Have you heard of this? I was like, oh yeah, I've heard about this, I heard that. Yeah, this, this and that. I was like, holy shit, okay, that's it. That's the end goal, cash flow.

• 9:43Henry Washington?

  So I have several more questions about how you transitioned from this, but I want to get into those right after this break. Here's a strategy that most W2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to Retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works. You buy one of Rent to Retirement's Class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to Retirement then rents the home as a short-term rental to establish it as an STR for the year.

• 10:26Henry Washington?

  No furnishing required, making this the easy button to save five or six figures in taxes this year. And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13% of the home price, which exceeds $60,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited. Learn more at biggerpockets.com/retirement or text REI to 33777.

• 11:11Henry Washington?

  Again, text REI to 33777.

• 11:15Dave Meyer?

  Summer bookings sound great until someone slips by the pool, gets hurt on your dock, or damages your property during a long holiday weekend. A lot of short-term rental investors don't realize their standard policy may leave gaps when it comes to short-term rental activity. That's why investors use Steadily. They offer landlord insurance built for real estate investors, including short-term rentals. And if you're a BiggerPockets Pro member, you'll also get 5% off your landlord insurance premiums. Visit biggerpockets.com/landlordinsurance to learn more.

• 11:47Henry Washington?

  Quick word about a new pro perk you'll want to know about. Aven, if you're a homeowner, there's a good chance you're sitting on equity that you're not using. The problem is tapping into that usually means a cash-out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Aven built something different. It's a credit card, but it's backed by your home equity. So you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card. Approval is fast and mostly online, and you can use it for anything. A renovation, paying down high-interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out. Get approved for the Aven card and you'll get a $400 statement credit

• 12:30Henry Washington?

  after spending $400 on your Aven card. Enough to cover your entire annual Pro membership. Head over to aven.com/biggerpockets to see if you qualify. Aven Financial, NMLS #2042345. Cards issued per 20 license from Visa USA, Inc. by Coastal Community Bank. NMLS #462289. Member FDIC, equal housing lender, subject to approval, terms apply. Visit aven.com for details.

• 12:52Speaker 03

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• 13:23Henry Washington?

  All right, we are back on the BiggerPockets Podcast with investor Andreas Martinez. Andreas started off wholesaling, did several wholesale deals, made good money, and then decided, you know what? I'm not going to do that anymore because I want to try this co-living thing. So you started to research, you learned about co-living. Did that deal that you were trying to wholesale become your first co-living property? Or did you end up wholesaling that?

• 13:50Speaker 01

  No. That same meetup that I went where I made my first wholesale deal for $500, it happens every Saturday of the first month. I was on the way there and I get a call from my boss because I'm still working at the restaurant. I was like, I need you. And I was like, you know, it was like January 2nd, brand new year. Like, you know, I woke up early, I shaved, I worked out. I was like, I'm going to go meet a lot of people. This is my year. And I missed a meetup and I get a text message from another guy that I was kind of coaching, teaching how to do wholesale. He was like, hey, this agent was walking around the meetup. And this is a creative finance meetup, full of creative finance investors. He was describing this property, these five rooms, three bedrooms, and the seller is in pre-foreclosure and he doesn't really want to make a lot of money. He just wants to help the seller. But nobody else paid attention to it.

• 14:34Speaker 01

  And I automatically, nobody paid attention because they don't know co-living. Text the agent, I was like, I'll call you as soon as I get out of work. I was supposed to get out at 4:00. I didn't get out until 11:00. I give him a call. He was like, I was waiting for your call. I was like, can we jump on a Zoom? Saturday at 11:30 at night, we're on a call for an hour. The next morning, we're meeting at the property with the seller before I go to work. Property under contract, $3,000 down. I got a 2019 house, corner lot, five bedrooms, three bathrooms, ready to go for co-living.

• 14:59Henry Washington?

  And so you essentially take over payments on this property and you convert it to co-living. Did you have to add any bedrooms or did you just do it co-living as it sat?

• 15:11Speaker 01

  So I bring the deal to my mastermind and to make sure that even though I already knew it was a good deal, I just needed, you know, I was about to put a lot of money in the conversion. It was about $40,000 to add three more rooms. We needed to redo the flooring because it was carpet. I need to put now LVP paint and I don't know anything about construction yet. And the guy who's hosting those, the mastermind, he's like, Andreas, do you want to sell me this? And I was like, oh, I really got a deal. You know, I really got a deal. And he was like, this works, long-term rental, Section A, meantime rental, Airbnb, and you're going to go for the worst strategy, co-living. I was like, that's what I want to try because it's in a great area. It has already five rooms, but I need to put three more to make, you know, maximum profit. And on that call, I was like, you know, it's going to be a lot of money, but I wish I could partner with somebody, you know, and I don't have to use my money.

• 15:53Henry Washington?

  So the money you were raising was the money for the renovation? Because you bought it sub two, but when you buy it sub two, that just gives you the money to buy it. You don't, if you're going to renovate it, that's got to come out of your pocket.

• 16:05Speaker 01

  You need the renovation, you need the furniture, you need the refrigerator, the stove, holding costs.

• 16:09Henry Washington?

  So about how much were you trying to raise to get all this done?

• 16:12Speaker 01

  $58,000. And on that Zoom chat, somebody texts me, he was like, hey, Andreas, we have money. Can we partner? And I was like, okay, let's talk about it. You bring all the money, I'll bring everything else, I'll manage it, and then we'll go from there. We go under contract, we close, we start renovations. My contractors end up stealing a lot of money, no profit for me. I lost at that point because it was my responsibility, $40,000 out of my pocket to rebuy all the flooring. The guys who were doing the work at the house, she never paid them. So they were trying to come back and to destroy the bathrooms that they had built. I had to stay at the property.

• 16:42Henry Washington?

  Oh, my goodness.

• 16:43Speaker 01

  Heart attack after heart attack. I was going to Home Depot in the morning, doing the renovation myself at the end, going back to work all day, double shift because now I needed money. Everything that I made from wholesaling was kind of gone. Going back at night, anyways, we went live on March 1st. I was folding two weeks.

• 16:57Henry Washington?

  Oh, my goodness. And how much were you renting each bedroom for?

• 17:01Speaker 01

  At the beginning, it was between $800 and $850. The private bathroom was for $1,000. So the total income was somewhere around $6,500.

• 17:08Henry Washington?

  $6,500 a month. And what was your mortgage, taxes, insurance?

• 17:12Speaker 01

  $2,100.

• 17:13Henry Washington?

  Oh, my goodness.

• 17:15Speaker 01

  After expenses and everything, the net was at the beginning like somewhere around $2,700, $2,800.

• 17:20Henry Washington?

  Yeah, man, that's a phenomenal cash flowing deal. What area of the country or what city are these deals being done in?

• 17:26Speaker 01

  Mainly forward Texas. Now I'm in DFW, but at that point, I started mainly in forward Texas.

• 17:32Henry Washington?

  So what did the next deal look like and how long did it take you to get that?

• 17:36Speaker 01

  While I was finishing the renovation, I contacted everybody that I knew, like I need any help. And I mean, this investor who already had another property coming up. And he was like, hey, since you know how to operate, right? You can get the properties, you can find the tenants, let's partner up. Because I'm already partners with a contractor. And I was like, okay, perfect. That's the second property. We jump into it. Turns out the contractor ends up scamming him and scamming me.

• 18:00Henry Washington?

  Boy, 0 for 2 on contractors.

• 18:02Speaker 01

  The main guy who was working for the contractor ends up renting a room in the second house. So I'm walking through the house, I was like, hey, bro, like you're still missing trim here and there and there. Eventually, three days later, I was like, hey, rent is due. And then he explodes like, you haven't paid my boss. She says you haven't paid her for a month. That's why she doesn't have money, blah, blah, blah. And I show him the receipts, like, we already paid her. She was gone. So he was like, I don't have money. And I was like, okay, let's get to work. And then I started just asking people, do you need a contractor? He did a good job and you know, he's the, he's the main guy.

• 18:32Henry Washington?

  Yeah.

• 18:32Speaker 01

  Find him a job, find him a second one. I was like, okay, can you find better, can you find bigger houses? Like, yeah, let me keep buying them. So now I was doing my food renovation, I learned a lot of construction there because he's been doing construction for 20 years. So we started doing more co-living for me, co-living for other investors, working with car for us, learning how to do permits. Now I had an already on the contract that was a fix and flip. We did the flip, we did another flip, I bought another co-living. So and that and now instead of doing the wholesaling, now the contractor gig took up. And if you ask me between being a contractor and a wholesaler, I would say being a contractor.

• 19:05Henry Washington?

  So that first co-living deal, you had a partner. So because the partner gave you the money for the renovation, the furniture. And then you guys were 50 50. Second deal was a different investor than who you were partnered with before?

• 19:17Speaker 01

  Yes, it was a different investor. He already wanted to invest in co-living, but he was missing the operations. Because operations is very heavy in co-living. So it was the same deal, 50 50. But he was like, since you were messing up on the contractor stuff, let me bring my partner. Because she's the, she's the contractor and then the whole thing.

• 19:32Henry Washington?

  Got it. So that ended up being a debacle from the contractor side. But it sounds like you were still able to get the house fixed up. And then were you able to get that one rented out? And how many bedrooms were in that one?

• 19:44Speaker 01

  That one was eight bedrooms with an ADU in the back.

• 19:46Henry Washington?

  And you were renting the rooms in that one for about how much?

• 19:49Speaker 01

  A little bit less, like between 750 and 800.

• 19:51Henry Washington?

  So give us the breakdown on that. What was your mortgage taxes, insurance, and what were you bringing in a month?

• 19:57Speaker 01

  Gross income was around 64, 6500 as well, pretty similar. Because we didn't have the ADU fully functional yet. That would have been an extra thousand, like.

• 20:04Henry Washington?

  Wow.

• 20:04Speaker 01

  We would kill it. PITI on that one was like 2300, but we had a HELOC that we also took on second position. Because the seller had a HELOC, so it was like an extra 300. But the net was still around the same, 22, 2300 at that time.

• 20:19Henry Washington?

  Yes, that's super cool. You're finding the people who either have the deals or can find the deals. And you bring the operations and the experience. And then you're typically 50 50 in those deals. So either somebody brings the money or the deal, you bring the operations, the experience, and then you 50 50. But it sounds like you realized after two failed renovation projects with contractors running off with some money. That you were like, this is a gap that I need to fill. So tell me about that. Did you go out and hire guys that you keep in-house? Or do you have just like other GCs that you work with that mainly only work for you? Like, what does that structure look like?

• 20:57Speaker 01

  So what I realized at that point was this contractor, she did not, anything other contractor. She just happened to find her, her main guy and his team was doing the stuff. So I was like, I can do the same. I can find the deals. I can find the houses. With the difference, I can work because I already did finish my house. I did the flooring, I did the tile, I did drywall. I have a better understanding of that. So I was like, look, if you help me learn this more, I can get you jobs. Right? Because as a wholesaler, if I come with a contractor, at that point, I was still thinking about wholesaling. Like it's, it's, it's a double win. So we, we started doing that.

• 21:28Henry Washington?

  So this was the guy who was living in the place. You said he did good work. So you said, I'll be your new GC if you start working for me. And so you kept him busy. So now you're able to manage the renovation and then manage operating the property. So that's the value that you bring to the deal. And then somebody else either brings the deal or brings the money and then you 50 50 on the co-living.

• 21:50Speaker 01

  Yes. So we did that one. A month after I did one more. Because I still had the leads coming from wholesaling. So I bought one more house, I raised the money, I did my own construction. Usually contractors, contractors, you know, six to eight weeks, I was able to do it in two weeks. And I started realizing like, okay, all these people are just talking bullshit because they need to split their teams here and split their, them. If you keep a group in one house, framing takes one or two days, drywall takes two more. Then you put the texture, it dries, it paints, that's done. Because the electrician can come in the morning, it can come at nine, the AC. So it doesn't take, unless you're doing plumbing, electrical, for all of that. So I started keeping the guys busy. I started making money there, slowly fade away from wholesaling.

• 22:28Henry Washington?

  So you're GCing for other investors, either on flips or other co-living properties?

• 22:34Speaker 01

  Mainly co-living. I've done 29 now.

• 22:35Henry Washington?

  That's really cool, man. I love to see that transition. So that's on the GC side. Would you mind just giving us a total breakdown of your portfolio as a whole? To get an idea of, of what your business looks like?

• 22:48Speaker 01

  Yes. So I have right now 14 properties. I own 10 of them and I have four under management. On average, each one nets 1900, 2000 right now.

• 22:56Henry Washington?

  All right. So across that portfolio, Andres, what is the net cash flow? What are you putting in your pocket every month?

• 23:02Speaker 01

  So all the properties net around 26, 28,000 a month, depending, you know, on the vacancies and all of that. And I take 50% of that. So I take home myself 12 to 14,000 dollars a month.

• 23:14Henry Washington?

  Man, that's super cool. Congrats on building that. I do have some more questions because I know there's people listening who are very curious about co-living. So I'd love to get some of your thoughts around best practices, things people should avoid if they're getting into this business. And, and also just thoughts around the management, because it is a very management heavy business. Leases are a big thing and making sure all that's sorted out. And so I'd like to dive into that. But first I want to take a quick break.

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• 28:34Henry Washington?

  All right, we are back on the BiggerPockets Podcast with investor Andreas Martinez, who started off in this business wholesaling, but transitioned into a niche called co-living. Now, co-living has been a buzzword for the past couple of years. It's really started to pick up steam. More people are getting into the space, mostly because affordability of housing is tough, especially in larger metro areas where real estate prices are higher. And so, for people who are interested, what are some of the most important things they need to be thinking about when operating a co-living business?

• 29:11Speaker 01

  This is not a passive strategy at all. You're having the complexity of having multiple personalities living under one building. So, everything that you're thinking right on your head that is a red flag, it is a red flag. But, there are ways to go around it, there are ways to fix it, there are ways to manage it. So, you need to develop a lot of systems to be able to run this, because for people who are starting it out, if you've never run a side hustle, if you've never run a business on the side, if you've never had that mentality, it could be overwhelming for you if you start growing your portfolio a lot. So, just start with one, start with two, give it a few months, see if you like it, and then decide to move forward.

• 29:45Henry Washington?

  Okay. Let's play a game of Mythbusters, because there's a lot of assumptions that people make with co-living. Myth number one, or truth, is that co-living is going to have high turnover. So, you're going to have people moving in and out all the time, short leases.

• 30:05Speaker 01

  It depends what type of business you want to run. If you allow somebody to come for three months in your house because they are on an internship, or just because they're getting divorced, then yes, you're going to have turnovers. And this is what, this is what I try to explain to people when they come to my groups and want to learn about co-living. I am focused on co-living because of the affordability issue. I don't want to have people out of state coming here for a month or two. I am targeting the guy that works at the gas station, the lady that works down at the McDonald's. They don't make enough to rent their own studio, but they have a job here, they have their family here, but they want to be independent. So, they come to my house, I always start them on a month-to-month lease, because in Texas, if I don't like them, I can let them go. If they don't like me, we can just part ways amicably. And I always tell them, it's a month, maybe two months, make sure you like it, and at

• 30:50Speaker 01

  that point, either you sign a 12-month lease, or you're out. So, once you stabilize the property, you don't have turnovers. And it's 107 rooms that I have, it would be impossible for me to run all of these by myself with no BAs, if I had high turnover. The problem of the, you know, the weekly rent and all of that, that's, imagine you have to move so many people weekly, like you need a big team. And every time you bring a personnel into the house, like, oh my God, who's coming now? Right? It's a big gamble.

• 31:20Henry Washington?

  Given this method, do you find that you usually have people that stay there entire term and then release up with you?

• 31:27Speaker 01

  I have five people that I've had since my first house. Actually, three of them, my first house, just signed in January, another one-year lease.

• 31:32Henry Washington?

  Oh, man, that's really cool.

• 31:35Speaker 01

  You have to think about, and that's what I tell people, why would they leave? They have the same job, they haven't gotten a pay raise, they are not going to college, they're not going to get a higher-paying job, and they have not found a partner yet. And this is, you know, people between 25 and 35, we're not talking about elderly or any people disabled. The house runs well, the house is clean, the house is safe, they know the management is on top of everything, why would they leave?

• 31:55Henry Washington?

  All right, myth number two, or truth, is that there's too many people issues, and my phone is going to be going off all day long with tenants complaining about their housemates.

• 32:08Speaker 01

  Yes, if you don't know what you're doing. For example, a lot of people don't want to talk to them upfront. They want to have, you know, a message and auto approval ratings, like no background checks. If you allow that type of people in your house, and then you get mad because they didn't wash the dishes, that's on you. You're a terrible operator, you're a terrible manager. Because you have to realize, everybody comes from a different background, right? For this person, that means clean. If you rent the same house, and you have somebody else who comes from a different background, who they know what clean is, and they come in and they see dishes all the time, I'm out of here, bro. The model that we run is, we are very upfront, before they even come to see the house, like, there's eight people here, you're going to have to be extremely clean, especially in the bathrooms. If you don't like it, just let me know, cancel the showing. And a lot of people do. And that's good, go leave somewhere else.

• 32:53Speaker 01

  I want to have people here who need it, in my houses. And when they come, they follow the rules. Like, I really have almost no problems with dirty dishes, or like people fighting in the house, or that they don't take the trash. It's all about pre-screening, man. It's a, every landlord's secret is pre-screening.

• 33:09Henry Washington?

  We, as landlords, have to stop putting off our failures on our tenants. Our job as landlords, no matter what type of landlord, is to be great at tenant selection. The better we are at tenant selection, the more profitable that we're going to be. All right, here's one that you may not have had to experience yet, but it is one that people think about. When going to sell a property, do you have to unrenovate and put it back in its original condition?

• 33:43Speaker 01

  You can sell it as a co-living to another investor, but you heard me say, I bought a five-bedroom house, and I added three rooms. That's only two-by-fours on drywall that can be taken out in one day, maybe going to cost me three to four thousand to repair the house, put it back to normal. Now, I can resell my property to the normal world. I don't have to wait for a co-living investor to come and buy this house, because if you're buying a house that is already renovated, if the investment was so good, why are you selling? On top of that, an appraiser walks into the house, and they don't see a living room, they're like, what is this, how do I compete? So, there are very few lenders who will help you finance a already converted co-living, but as an investor, I want to keep my options open.

• 34:23Henry Washington?

  The other myth slash truth is, parking is going to be an issue. Everybody's going to fight over parking spots, the neighbors are going to complain because there's cars on the street.

• 34:32Speaker 01

  Uh, yes, that's true.

• 34:34Henry Washington?

  And how do we deal with it?

• 34:38Speaker 01

  My first house, my neighbor, he wanted to call the city on me. He was very mad that we were going to rent. And I was like, I have my own parking in my corner lot, bro. And all my houses are either corner lot, I have parking in my backyard. So, there is absolutely no reason why my tenants would park against their houses. In fact, it is in my lease, if you walk into any of my houses, we have parking pictures there, like where they're supposed to park. I check the cameras once a week at the beginning, once the tenants are on their behavior, like, okay, we only park in our house, they stick to it, right? So, I don't have parking issues after that. But it's true, if I didn't buy the right house with parking, I would be struggling.

• 35:12Henry Washington?

  All right, Andreas, thank you so much for playing that game. I know a lot of people have similar questions, there's probably even more questions. So, if you're listening and you've got questions, drop a comment below, and maybe we can help you get some answers to those questions. Or, check out the BiggerPockets forums, and make a post in there, and there will be tons of investors who can help you with some of these ideas. Andreas, is there a way people can find you if they want to learn more about co-living, or just learn more about you in general?

• 35:40Speaker 01

  Yes, my name is Andreas Martinez REI on YouTube and Instagram. I have a lot of free content on YouTube, so for people who are curious and want to hear more about the actual co-living, you can go in there. If you want to message me, you can find me on Instagram, Andreas Martinez REI. And also, I have a school group now that is free to join. We meet once a week, and I hold two or three-hour calls for people to come ask me, because my inbox is full of like the same questions over and over and over. And it's not, I don't want to answer, but I don't, I don't, I don't have time. So, I just, if you want to get free game, I hold the call once a week, come in, ask me, I'm live for two or three hours, and then after that, you know, go, go home.

• 36:15Henry Washington?

  Awesome. Thank you so much, Andreas. Thank you for sharing your journey. Thank you for the lessons and being open and honest with us. And thank you so much to the BiggerPockets community for listening. We'll see everybody on the next episode of BiggerPockets.