When you hit rock bottom, the only way is to go up!
Joining Craig and Zeona on the show are Bryce Givens, founder of Elevate Recovery Homes, and Kayla Govier, a licensed realtor and a member of the FI Team. Since 2019, they have been house hacking with the primary goal of saving lives—and they are crushing it!
In this episode, Bryce and Kayla share how they met, their transition from “debt is bad” to “debt is good”, and their foray into sober living homes. They break down the numbers for their first 2 properties and explain how their business is set up. They also offer advice to people who are looking to build a business around real estate.
Listen to the Podcast here
Taking House Hacking to Another Level With Kayla Govier And Bryce Givens
I’m here with Zeona McIntyre, aka Z Money. What’s going on?
I’m loving Hawaii. I had a nice beach walk before I came here to meet you. While you’re still waking up at 3:30 AM, by the time, it’s 11:00 my time. I’ve had a whole day.
Is that so you can be on my Colorado time?
No. I didn’t force the time change. I’m like, “I’ll wake up Colorado time until my body naturally adjusts.” I’m going to bed early and trying to keep up with it as long as I can.
I’m sure everyone is jealous of your beach walk to get there. We have a cool episode with Bryce and Kayla, and they have had anything but a beach walk to get to where they are. For some background, Bryce and Kayla are good friends of mine. Kayla is the agent on the FI team. She is a rockstar agent. She’s amazing. Bryce has a history of addiction and drugs and all that stuff. He has gotten out of it. It’s exploded since. It’s funny how he almost channeled that addictive nature to go from doing bad things to doing good things. Would you call that some episode, Z?
It’s beautiful. This is definitely a love fest, this episode between all of you. I like seeing that care within your team. That’s sweet. It was inspiring when someone could take a struggle that they personally had and then turn it into something that they can expand for good and help other people. I love that that’s their mission and that they can make money. It’s a win-win.
It’s a nonprofit plus a money-making thing, which is great. I always think that people are more passionate when they can take something that changed their lives and help other people. That’s why I’m so passionate about house hacking in real estate investing. It’s because that’s totally changed my life. It’s allowed me to become financially free. It’s allowed me to do things and hang out with Zeona and all this stuff and it’s totally changed my life. Which is why I’m like shouting it from the rooftops. Sober Living is what changed Bryce and Kayla’s life. They’re shouting from the rooftops. Z, what’s changed your life?
I would say it’s the same. It’s been like this for me for the longest time. It was Airbnb house hacking. I love helping people with real estate and concepts of financial independence because it gives you freedom. I feel like most of us folks are addicted to freedom.
I am doing good.
I am doing great.
I love your place. Where is that? It looks good.
This funny thing, a buddy of ours wanted to turn this into a short-term rental property for himself. It didn’t end up working out. He leased it to us, which we’re going to talk to you about. Your buddy also happens to be on this call.
He sounds like a smart guy. Kayla and Bryce, I know you. We’re going to have a little bit of fun. I know you have an interesting background interesting start. First, how did you first hear about financial independence? When was that for you?
For me, it was I first heard about it from my dad when I was probably ten years old or so. My dad was a former professional athlete. We were talking about something and he’s like, “One day, you need to build a lifestyle where you can get rollover money.” I was like, “What’s rollover money?” He’s like, “Roll over money is like when you can roll over in bed and still make money.” I was like, “That’s pretty cool.” That’s when I first heard about it and then having that entrepreneurial mindset, my whole life growing up trying to run businesses and make money on my own. I’ve encountered financial independence through those channels but never became privy to it until I’m serious about talking about it with Kayla. We did the Dave Ramsey program through some of her friends and whatnot. I found out a little bit more information there. That’s where it was for me.
I didn’t learn about it. I want to say, maybe for the last few years is when I started to learn about financial independence. I had a lot of credit card debt in my 20s. We did do the Dave Ramsey and got all of that paid off, and then we found BiggerPockets in January 2021, and that’s where everything started to snowball.
What is the Dave Ramsey?
We didn’t do his whole program. It was paying off our credit card debt. That was the biggest thing for Dave Ramsey is like, “Don’t be a dumb consumer and buy a bunch of stuff you don’t need on credit.”
Do you feel like now you’re getting the opposite information because the real estate world is like, “How much can you leverage?” Dave Ramsey’s like, “Don’t have any debt ever.” It’s confusing, right?
It is. When we first went through his program, I was like, “I don’t know how I feel about this.” “I get that. You don’t want to have much credit card debt.” When you get into Kiyosaki, Rich Dad Poor Dad, and all the fundamentals of what BiggerPockets are built on and real estate is built on. It is like, “Let’s use other people’s money to make money. Let’s use debt to our advantage.” We were able to use that snowball effect that Dave Ramsey teaches to pay off the debt that we did have, but now we’ve switched our mindset into the way to become financially independent. It is to leverage other people’s money and your own money so that you can gain the core fundamentals and tactics of being financially free.
It sounds like in your twenties, you were living it up whatever being the traditional Americans, racked up a whole bunch of credit card debt and in maybe early 30s or late 20s, you started figuring out like, “I got to get my stuff together.” Dave Ramsey tends to be that first step towards getting your financial house in order, and then you graduate from Dave Ramsey.
If you’re financially savvy, if you listen to David Ramsey’s advice, you’re not going to go broke, but you’re also probably not going to be rich. It sounds that you wanted to get to that next level and scale faster and maybe become rich. That’s when you start using debt and other people’s money and you get mortgages out and all that stuff. When did that transition take place when you went from debt is bad to debt is pretty good?
Earlier in 2021.
You are fresh blood. What actionable steps did you take when doing that?
Buying a house.
Were you like, “I should buy a house?” How did you go from paying off credit card debt to buying a house?
I vividly remember finding BiggerPockets when I was looking for a podcast to listen to. I was in the sauna. I was like, “Real estate. Cool. I’ll listen to it.” I listened to it. It was like the light bulb went off. I started listening to the BiggerPockets Podcast, and Bryce listened to it. We kept learning as much as we could. We decided that buying a house was the next step.Everybody's path to recovery is different. Some people could even take years or even decades to get better. Click To Tweet
We were sick of renting. We live in this apartment complex that’s costing us $1700 a month. It’s ridiculous. It was all bad. We’re tired of paying somebody else when we need to go into these waters of owning ourselves. That’s when it became apparent. I’d say, at the end of 2020, during the pandemic, when we were all locked up, we were like, “This is miserable. I don’t want to be in an apartment building anymore.” In the search for the next step, that’s where we found like. We need to buy our own place.
How did it go from, “I want to buy a place,” to this unique strategy you use? We’ve been teasing people about it. We’ll talk about that a little bit. It’s so different. It’s such a departure from what the normal person would do when they think, “We’re going to buy a house.”
I’m in recovery. I’ve been sober for coming up on a few years. I was helping mentor some of my friends who are also in early recovery. They would come to me for advice or counsel or guidance or to be a friend throughout their process and their journey and recovery. One of my buddies who had recently gotten out of an inpatient treatment facility and had gone into a sober living house, I was mentoring him and we had rolled it. We had talked about some ideas, but this is right around the time end of 2020 looking into 2021, so I had the idea of approaching Kayla with like, “There’s this thing called sober living. Let’s explore what this looks like. Would you be open to potentially buying a house with the intention of opening up a group home?” That’s where the idea came from.
I’d known about sober living before being in recovery and understanding how the process works and how group homes work. There wasn’t an offering for what type of sober living I wanted to open in the Denver Metro area. In the recovery business, it’s much of a twelve-step based. We’re starting to see this near recovery to where it’s like an all-pathways approach. Being that I got sober, lifting weights, and through exercise, nutrition, fellowship, and solid foundational friendship support and family support, I was like, “I want to be able to offer that to other people because I don’t see that in the marketplace.”
It can be helpful, especially for people who have similar experiences to what I have. She wants to fully support me. That’s one thing that helped us. She’s like, “I’m super down. Let’s run the numbers. Let’s see if this can be a viable option. We can go from there and decide whether or not we want to take the dive into that world.” That’s how we got started. It was an idea. It was like, “This might make sense.”
You took something that changed your life with this Sober Living house, which, for those that don’t know, you’re going to put 10 or 12 people all with the same goal of achieving sobriety in a house together. The idea is that a rising tide lifts all ships and so you have accountability literally sitting next to you, eating next to you all that and you are taking a different approach. There are these crappy Oxford houses and stuff like that that don’t have any accountability, but your program, it’s accountability through exercise, through fitness, and through health because that is the root of the problem. Healthy mind, healthy body, that approach, right?
Totally. We wanted to provide a place where people can be all the way well, not just focused on one thing.
What are some things that you do in your house that make it different? How do you do that?
The foundational pillars of our business are structure, accountability, support, and then the most important is a deliberate action. One thing that we do a lot and one thing that the industry is starting to see a lot more of these days, especially with legislation being passed, is a need for what’s known as peer recovery support services. It’s called peer coaching. We offer a lot of hands-on one-on-one peer coaching.
Peer coaching is a method for me to connect with the members in our house and allow them to develop clarity around what their overall life goals are, whether those are 3, 6, 9 months, year-long goals. We develop clarity around what those goals are, and then we set a blueprint, a roadmap for them to be able to achieve those goals within the short term, weekly meetings. We have goal-setting and review meetings. We talk about priorities every week to help them hold themselves accountable and be accountable to the entire community to accomplish the things they set out to do.
That’s a new thing in the industry that a lot of other people don’t offer. They’ll offer a house, and they’ll manage the house and then let them manage their recovery. We think that giving them a little bit more support, whether that’s career support, developing financial assistance, developing more knowledgebase around nutrition or health, and how those things tie into living a life in recovery. There was a portion missing from that, and we have helped with that.
You decided to merge this concept with traditional house hacking to turn it into this house hacking on steroids. Why don’t you tell us a little bit about that first house and let’s get into the numbers on what you did with it?
We started looking in February and didn’t find a property until April. The house was listed at $400,000. We offered $460,000 to $500,000 with a $15,000 appraisal gap. We got it and we ended up paying about $18,500 out of pocket with down payment closing costs and everything. Our mortgage payment is around $2,257.
You went $62,000 over the asking price?
I don’t know if you recall early 2021. I’m sure you did because you probably made a lot of money, but the housing market was crazy. That’s where we’re at. We had to be competitive.
Bryce and Kayla ran the numbers. Just because the listing price is $400,000, they could still make it work at $50,000 over the asking price, which is why they offered at that price. It was still a deal. We’re going to dive into the numbers here, but I’m sure you didn’t make a dumb decision.
If you’re looking at where they came from, which was $1,700 a month, and now moving to $2,200 a month, even if they traditionally house-hacked, they could have done fine. That’s cool to see as well, though it’s not that much money at the end of the day, even though it sounds like you paid so much for asking.
It was listed at $400,000 and you paid $462,500. Your out-of-pocket, you said, was $18,000 with the 4% down payment.
We had our first member come in, in June. We paid our full mortgage payment in May. In June, we paid about $1,350, and then in July, we had three members, and we earned about $293 by having those people in our house. As it stands for that particular house, after all, housing expenses are paid, we are making about $3,100 in profit.
That’s after you moved out, or is that with you living there?
We moved into our next house in October. As it stands, we earned about $1,600 in profit after all housing expenses were paid.
From the second house?
You’re going to make $3,100 from the first house and $1,600 from the second house.
If the numbers go up, they will most likely go up based on occupancy rates.
Let’s go back to that first house. How the heck are you getting $3,100 a month in cashflow because you’re already paying? How much is your mortgage payment?
Let’s say $2,300. That means you’re getting $5,500 or something in rent. How do you garner that much in rent from a house like this?
This business is set up because we have semi-private rooms, meaning no less than two people per room, especially for the business model that we have. Isolation is detrimental to people in a group home. Having a roommate is natural in this case. If you look at the traditional model of house-hacking, you’re doing it either by unit or by door. Ours is even broken down one more into by the bed, so we have two beds per room.
We have a four-bedroom house. There are two beds in three of the rooms, and in one of the rooms, there are three beds. That’s how we get those numbers with our program fee. We call it a program fee, too, because we’re not renting to these. They’re not renters. They’re not leases. They are members of our program. That’s critical and understanding how this model works. We are not renting to them, but we definitely charge them a program fee. That’s where the top-line revenue comes from.
How long does the program last? I imagine it might be different for different people, but just to get an idea of how much turnover you’re having to deal with and finding new people and all of that.
We’ve seen so far that we’ve only been open about for a few months, we’ve had a little turnover. Talking with the other operators, our core group of friends, who are also operators, they say, typically at six months to a year. We don’t have a cap on how long someone can stay. Our minimum requirement is 30 days, so they have to pay a 30-day upfront program fee plus an initial processing fee, essentially like a deposit. I would say, on average would be 4 to 6 months and probably going to expand.
What do you charge per bed?
Per bed is $750 a month, and then we’ll do a $150 processing fee.
Roughly, I’m going to exclude the processing fee for ease of calculation. If you’ve got a full house, you’re going to make $7,500 a month in rent, and your mortgage payment is that roughly $2300. What are other fees involved with this arrangement?
Water, electricity, Xfinity, trash, insurance for both the house, business insurance, and professional liability insurance are a big chunk of insurance. Maintenance, you could say we’ve set aside money for CapEx as well. We got new windows on the house. We’re getting solar on the house, upgrades, and stuff like that.
Your total cashflow is not the $7500 minus that’s $4300, which is too big for me to do in my head. It’s like maybe $1,000 more on top of that of miscellaneous expenses, which is fine when you come to that $3,100 a month number. Is that right?Leverage other people's money and your own so that you can gain the core fundamentals and tactics of being financially free. Click To Tweet
It’s totally a new way of doing things. How does one go about opening up a sober living home? Do you have to be in recovery? Is there some relatedness that you need to have with the members of your program or, I’ve never been an addict or anything, could I go open up tomorrow?
It’s definitely something I wanted to talk about here on your platform. Anytime I talk to anybody else about this, it’s super important to mention this. We got into this business because we’re trying to help save people’s lives, bar none, point-blank. That’s the primary function. The investment stuff happens to be like icing on the cake. Other people have approached us to give us insight as to, “I have this idea. I know you are doing this and you are using this as a real estate investment opportunity.”
I want to be clear, in this space, first of all, credibility is critical and reputation is critical. If your intention is to make money, then this definitely isn’t the business for you. If your intention is to help people out and understand that there’s a lot of oversight and a lot of management that comes along with this, and know that you’re trying to get into this business for the right reasons. The alignment of your intentions and helping other people is the primary core function of that business, then that’s great. It can be a win-win. That’s paramount. You’re dealing with people’s lives so it’s a serious thing. With us being friends and knowing me, there are ways for investors to get involved.
To do this as a primary core function of like a business offering or value proposition that you offer, if you don’t have any relationship with people with substance use disorder or any disability, I would probably stay away from it and steer clear from it because of the impact that you can have on somebody. You’re dealing with people’s lives at the end of the day.
It seems to me that you’re dealing with people’s lives. It’s gentle. These guys are vulnerable in these first 30, 60, 90 days. They’re like, “I don’t know what the heck I’m doing.” I come home and have a bottle of wine with my girlfriend. That could trigger somebody that I would never even think of. It’s like, I would say because you walk the walk. You are living, breathing examples as to who everyone in this program should be. You can’t mess up because if you mess up, you’re setting an example for twelve other people to mess up and then your whole program goes down. Personally, I don’t want that responsibility. If drinking isn’t a big part of your life, if you don’t drink at all, and you don’t smoke or whatever else, this could be a good way to feel like you’re almost doing a nonprofit. It’s not like the nonprofit fields where you’re genuinely helping people, but also, you’re making a lot of money doing it. It’s a win-win.
What I would encourage people to do, if they’re interested in this model, is do a lot of research and reach out to people that are in the industry. There are sober livings in all 50 states. There are people who are doing it correctly in all 50 states. Maybe reach out to them, and do your research. Do your due diligence and try to develop relationships if you think it’s something that you can do, where you have that triple bottom line.
For us, we have a successful business. We are getting equity and appreciation. We’re helping people. At the end of the day, if you think you can do that, then great. If not, I would say outsource or do what other investors are doing. Sober Living operators are willing to pay a premium for leasing a home from an investor, knowing that they’re going to be running a business out of that home. There’s going to be extra occupants within that home and there’s going to be extra maintenance, extra CapEx, all of that stuff. If you can build that in with an investor, it’s a unique niche opportunity for that person to partner up with somebody else if they don’t want to have the whole management function of running a sober living business.
That’s a wonderful idea. I’m shouting at the top of the roof is because it’s as passive as it gets for the investor because you as the operator are going to take care of everything. You’re going to manage the house. You’re going to do the maintenance. You’re going to do pretty much everything. You’re going to pay us a premium as the landlord. I don’t have to do anything. I make more money than I would have to a regular tenant. You make more money because you’ve got a house and you can rent out and you’ve got that extra cashflow, you said $1,700 or $1,600 this month from this house that you moved into, and you’re helping a whole bunch of other people out. That’s such a win-win-win approach. I’m scared to death to touch the business that you are in because I’m not in it. It’s incredible.
I’m curious about how moving out of a home is because when you’re in it, I feel like you have the energy to control the space. I don’t know how it is in the day-to-day, but maybe you’re doing a little bit of coaching and helping people when they have a hard day and stuff. You’re in that. When you leave the space, even if you’re in the same town but down the street, I imagine it’s harder to control that dynamic, so can you speak to that, how that transition works?
I trained two house managers. We have house managers for both homes. Even though we live at the second home, we have a house manager for each of the properties. It’s a member who’s a part of the program. We’ve defined what a leadership role looks like. I help them out with leadership development skills. I’ve built a structure and a system, and checklists for them to follow. Most of the time, I’m selecting people that either have several years of recovery or are capable of managing other people within the house. It’s a learn-as-you-go thing.
One of my house managers is 23 years old, and he manages nine other guys. The other one, he had been six years clean and had a relapse last year, but he knows what he’s doing. Once you start to pull yourself from working in the business and try to be working on the business, it’s super, super important to have those managers in place. As we expand and grow, and as we scale, we’re going to continue to try to develop a solid leadership structure because that’s critical in maintaining a good culture.
How do you incentivize one of these managers? It’s like, “You’re a leader. That’s a cool little role,” or do you count the rent? What do you do?
Legally speaking, since they’re not renting. We can’t give them a discount on rent because that’s where you get into subsidy and stuff like that. What they do is, all the house managers will sign an independent contractor agreement. Within that agreement, it gives them complete control to manage the house and how they see fit. In addition to me managing them, they do get a discount on the program fee. I discount them about 30% off the total program fee, which is nice for them. That’s where the incentive comes from. Also, most of the people that are house managers typically want to have a role in this industry within helping people or becoming coaches, becoming psychologists or in school for psychology, stuff like that. They’re already using it as a win for their own personal gain. There are financial incentives built into that.
I want to hear from Kayla to bring her voice back into the space a little bit. We know you’re here. I’m curious how it is to live with so many people because it is house-hacking but double occupancy. You are a couple, so I imagine you were sharing a room. How is that with a lot of dude energy happening?
It was definitely hard. The house is set up because the three bedrooms out of the four are upstairs. There were three beds, one bath upstairs, and then downstairs was our bedroom and then our bathroom. We had a little living area. That was nice, but it was definitely a lot of testosterone and a lot of dudeness happening. It was stressful and hard in the end. Once we moved out, we were in this other house. It’s set up like a triplex. We have our own unit. I don’t even know some of the people that live in our house. It’s a lot better.
Let’s go into house number two. You already mentioned that you’re earning about $1,600 a month. Tell us how that broke down. How was Craig involved in all this?
We are on a graduated lease with our landlord, who has to be Craig Curelop. We’re paying around $2,700 and then with the other expenses, that’s how we landed on $1,600. We only have six.
We have six in the house and another guy moving in, so we’ll have seven at the end of the day.
The majority of those people are new to the program for November, which will include $150 processing fees. That bumps up our monthly of what we collect from them to $900.
I’m curious, how are you getting these people? Are you connected to maybe like a bigger network or maybe like recovery and other programs? Do they go to AA first and then they find homes? I don’t know.
One of my main skillsets and what I’m good at is networking. What we’ve done is I’ve started cold-calling people in the industry and developing relationships. That initially started when we first bought the house in April. I basically had a list of all the treatment centers in Colorado, all the detox centers in Colorado, all the Sober living homes installers, Colorado. I called everybody, left messages, emailed, reached out, and initially got my name out there. Since then, I’ve developed relationships with several major players in the space. I would say 80% to 90% of our members come from treatment centers. It’s mostly word of mouth. Everything’s built on credibility and reputation.
A treatment center isn’t going to refer to you as a Sober Living operator unless you meet a certain criterion. One of those criteria being you have to be certified by the state-governing recovery residents association for Colorado. It’s called the Colorado Association of Recovery Residences. What they do is they come and they vet out your house, making sure you have fire extinguishers and Narcan under the sinks and signage posted about exits, and on and on.
You have to be certified to know that it’s a safe environment for treatment centers to be able to send their clients to. Once you have those things and have all the bells and whistles covered from a liability standpoint, people want to come to your house, see your house, how it feels, how it’s run, how it’s laid out. They can refer their clients and know that in good faith, they can say, “This is a good place with good people.” For the first for June and July, and even into August 2021, I was spending almost every day developing those relationships, having people over to the house, giving tours, going to see tours, and doing all of the marketing stuff, so to speak.
Since then, we’ve developed solid relationships with probably 5 or 6 prominent and respected treatment centers. That’s where we get most of our referrals from. Since then, from August 2021, we’ve started to develop word-of-mouth reputation from other people in the industry. We get referred to by other Sober Living operators. If they’re full, they’ll call us, “Do you have a bed open? I have this guy.” “Tell me his story.” We’ll do then the interview process. Whatever that looks like. It can differ from member to member. A majority of our clients are coming straight out of treatment from treatment centers from case managers.
That intake interview, what betting happens here because these people already had a low point so you know they could have some criminal history? They’re coming from rehabilitation. How do you determine that it’s going to be safe to have them in the home?
We’re going to background search everybody. It comes down to meeting with somebody, either face-to-face or through a zoom call like this. Another skill set of mine is being able to have a good intuition on whether or not somebody is going to fit our culture. I can find that out within a few minutes. I’ve been doing a great job at that so far. The interview process is essentially me meeting with somebody asking a series of questions, getting to know more about them, and getting to know how I can help support them.
Some people, whether they’re dual diagnosis or they have other issues going on, may not be a good fit. That’s apparent initially when we do the first interview process. What I’ll do then is I’ll send them an intake form that they’ll then fill out, and then we work directly with another treatment center. They have licensed practitioners and licensed addiction counselors and stuff like that. We offer some services and provide other services separate from the housing that allow us to get a more clinical basis for what each client needs and the required therapy. That’s the baseline level stuff that we go over with the client.
You have multiple clients in a room, and this was the question I was going to ask that came back to me. How do you get around these laws of you can only have five unrelated people living in a house and every city have these laws set? Why don’t you talk a little bit about that?
Being that people with substance use disorder are protected, we’re a protected class just like anybody else under the ADA, American Disabilities Act. There was a bill passed or a law passed, the Federal Housing Act, and in the Federal Housing Act, it states that you cannot discriminate on the basis of a disability. When you face zoning issues, ordinance issues within your jurisdiction, municipality, city or county or whatever, how we get around, and that’s where a loophole is, if you want to call it that. You can’t discriminate based on the number of people to offer a housing solution for somebody who is struggling with a disorder. That’s how we overcome that.
In Denver, they made it to five unrelated people. That doesn’t apply to us. That’s how we get around that. That’s also not taken lightly either. That’s where the vetting comes in from the governmental standpoint, making sure that this is not a house run by somebody and they’re calling it a recovery residence. You have to abide by certain rules and regulations to make sure that it’s a safe place for people.
We have a business license and all, so the city is aware that we do what we do.
We had to put a proposal together, and we went to the city. We’re like, “Here’s what we’re doing.” We went through this, and we struggled with this and they came back to us, and they’re like, “You can’t have a group home in your house because you’re within a certain number of feet or something.” I went back to them and said, “I talked to the city attorney. We can go about this 1 of 2 ways. Either you can make a request or I’m going to request a reasonable accommodation on this case.” I gave him all the statutes and all this stuff or we can work this out another way and get the legal team involved if we need to. He got back to me that same day, sent me an email, and said, “There’s no problem. You’re good to go. Here’s your business license.” It was great.
I’ll show you my lawyer skills. That’s the big thing if you are going to go into the sober living stuff. It’s something that you need to make a business out of it. I can’t buy a house tomorrow and serve upright. You got over the business. You got to show that you’re legit because there are rules. There are rules of unrelated occupants and all that that the only way to get around that is if you show that you are 100% legit.
I want to know about this graduated lease. You didn’t buy the house. It’s Craig’s house. It’s the run that you were talking about. Are there any other numbers we should consider? Maybe not. Tell us about a graduated lease. What does that mean?
Craig and Bryce worked out a deal because we have the first house that we pay for, all that’s good. Going into the next house, we were concerned with how quickly we could get it filled up. We saw when we first opened our first house that we didn’t have members until a month after we opened. We wanted to give ourselves a buffer to get the house filled up. With the graduated lease, we started at $2,500. We’ll raise by $200 every month until we get to our endpoint, which is what we’ll pay Craig moving forward.
It’ll be $3,500. We signed an eighteen-month lease at $3,500, which is nice because it makes sense. Craig mentioned before that it’s a win for him and it’s a win for us, so as long as we’re both able to help each other out. That’s what it’s about, benefiting each other.
Hopefully, he doesn’t raise that rent on you.Do the thing you have to do so you can do the thing you want to do. Click To Tweet
What is your plan? Are you wanting to pick up as many of these puppies as possible, and anyone with a house should reach out to you immediately? I feel like buying your own is probably more economical, but you can only do so much of that. Tell us where you’re headed.
For now, our goal is to get the first house filled and get the second house filled and maintain that. We want to acquire some credit card debt getting the business open, get that paid off, and then save money. We want to save at least six months, if not more reserves for a business, and then we want to have enough money to buy a house, so a down payment for both of us.
Six months operating cash and then buying a house for each of us. We’re not married yet, so we want to have the ability to do the owner-occupied low-money down for the next houses that we buy. Scaling is definitely in the cards, for sure. We want to do it effectively and efficiently. We don’t want to scale too fast. There was a sober living operator that opened ten homes in the first twelve months of being opened. They’ve since closed their doors. We’re dealing with people’s lives here. It’s serious at the end of the day, so we want to provide the best service that we can and be able to build the right team and scale efficiently and effectively so that we can have the pieces in place. We need to be able to provide the best quality service that we can. That’s the route we’ll go.
When we first got into this, we were creating a vivid vision, and we were like, “It’d be cool to have ten houses in the first three years.” Our vision has shifted a little bit to move moreso away from the numbers like, “We want these this many numbers.” We’re looking into some nonprofit stuff to expand the core business model in what we’re doing and in the service we provide. The numbers are definitely pretty similar to that. There’s a huge market from northern Colorado all the way down to Pueblo, basically from Fort Collins to Pueblo. Eventually, we’re going to reach all of those markets. We’re going to scale in time and do it in a smart way so that we’re not spreading ourselves too thin. We’re still able to have that hands-on approach for everybody.
This is my last question for you. I’m not familiar with the struggle of addiction. I’m curious how it is for you. I don’t know how far removed you are. Is it like, every day, it comes up for you or it’s in your mind even, moment to moment? Are you feeling pretty far away from it? It does sound like you have a great purpose with this business, so I imagine that keeps you busy.
This is what’s interesting. Everybody’s path to recovery is different. For some people, they can go years and years or decades, and it’d be on the top of their mind. When I decided and decided to end that chapter in my life and move on from that and build a life of value and a purpose-driven life, my whole worldview changed and shifted. Rather than looking at life through this lens of myself and what I can get out of it, as I shifted into a service-based life, to be completely honest with you, this is my experience. I rarely think about any urges, cravings, that deficit mindset of addiction. I’m more forward-thinking, looking out of the windshield, rather than the rearview. It does cross my mind occasionally because I’m in this space, and I’m helping people with that.
A majority of my experience now is mainly focused on helping other people, dealing with their struggles, meeting them where they’re at, and trying to help build them. Their recovery capital is a key term that you see in this industry. It is helping people develop their own recovery capital, and meeting them where they’re at. From my experience, I wouldn’t say I would use the word struggle. I made that choice. I made that commitment. I’m a strong-willed person. Once I make up my mind, I’m pretty much an all-or-nothing. That’s the addictive personality thing in me. I’m either all-in or I’m all-out. I’m all in on this. That’s where I’m at with it. That’s my experience. It’s different for everybody else.
I’m addicted to being sober. I like that. One other thing, in my mind, once you have other people looking up to you, once you have other people seeing you as the model and the example, you’re not only hurting yourself if you were to relapse or whatever, your life falls apart. Did you ever think about that as a good repercussion of starting this business being an example and having that for you?
It’s the accountability aspect. It’s built into my life. There’s so much pressure, if you will, on my sobriety and me being a beacon of light to other people. I thrive on that. Give me all the pressure. I want that because that’s going to help hold me accountable. That’s going to force me. It’s like with the Ironman stuff. We’re all future Ironman. I’ve been training for Ironman for a couple of years. I’ve been doing this whole endurance sports thing for a long time. I like having that pressure of knowing something big is on the agenda. It’s going to help keep myself accountable and ultimately help everybody else that’s surrounded within our bubble is to create that support that structure and that accountability of it.
Before we head into the final part of our show, I’m going to ask you a fun question. Give us your most badass story from when you were in your different life.
My most badass story, that’s a hard one because I have so many good stories. It depends on what you would consider badass or not. I’ll tell you something scary. I got to a point in my life where I was dealing drugs. I ended up mulling drugs. We had a connection over the border in Tijuana. We had a team of people that we would send down there, and we’d go down. We would literally put drugs in our bodies and mule it across international borders. I don’t know if I can ever be charged with this or not. I don’t know if there’s a statute of limitations. Though, some scary stuff has happened. I wouldn’t necessarily consider that badass. It’s ass-related, but I don’t know.
Everybody’s journey is different. Everybody’s stories are different. One of the things that I don’t necessarily, going back to Zeonna’s question, do about it often. I’ve shut down part of my memories from that. It wasn’t a long period of my life. From 25 to 30, I was in the midst of it all, seriously addicted and doing the most. I have shut off my memories around that stuff because I’m committed to living this life. They call it in the recovery space like you glorify or you’re telling war stories and stuff like that. Sorry for not giving you a great war story off the top of my head.
The things you see in the movies and read about in books and stuff like that are true. It’s a dark world. There’s a lot of negative energy around that, something I would never want to give up. A lot of people don’t get to experience moving illegal substances across international lines, so that’s exciting and exhilarating. I don’t recommend it for sure.
You’re an entrepreneur through and through. You had created this whole business with systems and things in that other life, and you were still building something. Now you get to build something for good rather than building something that was potentially harming people somewhere else. That’s a beautiful thing to point out.
That’s a great way to look at that. I never looked at it from that perspective. You’re totally right.
That’s what I’m here for.
Z’s our guiding light. I’m the asshole that brings everybody down. Thanks a lot for sharing all this. You get vulnerable here on the show. We definitely appreciate that. Everyone’s got their journey. You are doing a lot of good. We all love you. That’s big. Are there any other parting words of wisdom you want to say before we head to the last part?
I don’t have any words of wisdom. Move out as fast as you can when you’re living with some of these.
I would say a few words of wisdom. I want to reiterate. The intention has to be right on this business model. Yes, it is house hacking. This is the way we look at it. It’s like Kayla’s the real estate investor. I’m running a business and the way that we set it up, too and we should have mentioned this earlier is like, she leases basically the business to me. My business pays the lease and pays the mortgage for the other house. Essentially, she’s the real estate investor doing exactly what you’re doing, Craig, even though we’re a couple and we’re together, and she’s intertwined with the core day-to-day functions of the business and understands it. She’s essentially the real estate investor, and I’m a business operator and trying to provide the best service that I can.
When this gets out onto your platform, if this is something they’re interested in, I’d be happy for them to reach out to me. I’d share any information that they want. If they’re not in Colorado or in the West Coast or whatever, reach out to people. Do some research. If you’re interested in helping people out, there are people that can give you some good information and insight as to how to be a part of this business offering and get in this industry to help other people that deal with addiction.
Let’s head into The Final Four. Z, kick us off.
What are you reading? There are two of you. Maybe you can each give us one.
I’m currently reading The Millionaire Real Estate Agent.
I don’t like it. Did you like it? It’s dry.
It helps with mindset. It’s like another mindset book. I need that sometimes.
Read SOLD. It’s good, too.
I have read that one.
I’m currently reading a book called This. It is by Michael Gungor, who, if you don’t know who he is, he’s a Grammy Award-winning. He was a Christian rock musician. He turned into a Buddhist. It’s a good book about the Four Noble Truths of Buddhism and how it applies to being in the present moment, being in the here and now. It’s shared through his experience, which is enlightening, if you will, not to be like so blasé on that word.
That’s where Bryce is going next. He’s going straight Buddhist. Forget about his properties. He’s going Buddhist.
He’ll open up temples pretty soon. What is the best piece of advice you’ve ever received? You can both answer.
One thing I always think about, which was helpful when we were in our house, is it’s more like a quote. Do the thing you have to do so you can do the thing you want to do. That’s what kept me going when things got hard.
The best piece of advice, I would say, is from a good friend of mine. We went hiking on this long hike at the end of the summer, and a good friend of mine, who was introduced to me through you, Craig, said, “Don’t waste your time with all that single-family. Get into syndication. That’s the next move.”
We had that friend on our podcast, Tyler Giering. He talks all those syndications.
He’s the man. I love Tyler.
Question number three is, what is your why?
In life or real estate investing life?
I would say it’s real estate investing. Why do you do real estate?
Why real estate? It’s like your lifeline. It’s real estate, you make money, but then it’s like, “What’s your why in life because that’s why you do real estate?” Give us both.
My purpose in life is to maximize my potential as a human being and show others how to do the same. Real estate investing is to build wealth for me, my family, and my future family and give myself the opportunity to do the things I want to do.
I’ll piggyback on that. It comes down to our mission for the business. It’s to help our members and help our friends and family and the people we surround ourselves with to create a life of purpose and value to create that purpose-driven life, whatever that is to them, realizing the value and purpose-driven life.
Last serious question. Do you think that aliens exist?
1,000%. I have a UFO tattoo on my ankle.
Why do I think aliens exist? How is it possible that we are the only living beings in this world? There’s no way, 0% chance.
I also think that aliens exist and I’ve met a few aliens. There’s a good friend of mine. This goes back to how we developed a little bit of our friendship, Craig, is a kid that I played football with at CU, who’s still currently playing in the NFL. He is a 330-pounds, 6”9’ individual who moves like a gazelle. I’m like, “This is not a human being.” Craig is a huge Patriots fan for those of you who don’t know. If you know anything about the Patriots, they used to have a left tackle named Nate Solder. That’s who I’m talking about. Shout out to Nate. He’s the best athlete I’ve ever come in contact with in my life and also one of the best human beings. He’s amazing. He is a freak of nature, to say the least. He is for sure an alien. This kid is ridiculous. They exist. I’ve met him.
Nate Solder listens to our podcast right before game day to get pumped up. Bryce and Kayla, thank you both so much for coming to the show. We’re grateful to have you on and share your story. Where can people find out more about you?
If you have any interest in investing in recovery homes or potentially opening up your own, Bryce and Kayla would be more than happy to chat with you. Reach out to super nice people and great people to have in your network. Thanks so much for coming on. We love you both. We will see you soon.
Thank you for having us. We love you too.
That was Bryce and Kayla. Z, what did you think?
I love that show. It’s got so much depth, but it’s also got such a cool concept and something new. It gets a little bit frustrating about real estate because sometimes it starts to feel like it’s all the same. There are 2 or 3 different ways and everybody’s doing it. Once you learn those, you’re like, “I need something new.” This is a fresh idea. It’s so surprising and incredible, too, the way that it’s impacting people.
I love the concept of the win-win-win. They have two houses, one of which they own, one of which they rent. Their total cashflow from those two houses is $5,000 a month. A lot of people reading this can live off $5,000 a month easily. That’s not to say you’re going to open up a sober living home and half asset. As they said, you’re dealing with people’s lives. We want to add that pressure because it’s serious. We also want to have that pressure because you can impact people’s lives if you do a good job. Make sure you have a program and make sure you’re relatable. That’s a big part of it. If you want or are interested in sober living, I encourage reaching out to Bryce and Kayla. They would be a great help. They would love to help. They’re such nice genuine people. They talk to you for hours, probably on it during their time.
A beautiful way to get into something like this is a partnership. That could be a way and it sounds like they might do syndications in the future, so looking out for certifications that match, maybe, your personal values. That’s also a great way.
Before we head off, are there any other words of wisdom you want to give to our audience?
For some reason, a concept of balance is coming up for me and maybe it’s all the monk-talk because Bryce is going to make us all monks after this, straight Buddhist monks. For me, it’s always a reminder that money is not the only thing and it shouldn’t be the only driver in life. It’s the balance of doing stuff that lights you up, gives you purpose, and brings in values. Try to remember.
That balance is what helps you grow because if you’re only money-orientated, you’re going to burn out. Make sure you do things that are recharging your battery, like spending six weeks in Hawaii or whatever you have to do. Spend time with friends and family. Have fun, be playful. You’ll see Kayla and I do this weird thing if you watch the video. Be silly, be fun. That allows you to go much further.
Thank you for being here this episode. If you enjoyed this show, share it with your friends. Leave us a like or comment in any place that you are listening to and streaming the podcast. We’ll see you in the next episode.
Thank you so much.
- Bryce – LinkedIn
- Kayla – LinkedIn
- Rich Dad Poor Dad
- The Millionaire Real Estate Agent
- Tyler Giering – Past episode
- Nate Solder – Twitter
- @KaylaGovier – Instagram
- @_BryceGivens – Instagram
- @ElevateRecoveryHomes – Instagram