Finding win-win solutions for students and property owners with Ryan Stohl

Ryan Stohl is the CEO and Co-founder of Lumi, a company focused on solving student housing problems in Miami FL. In this episode, he joins JP Will from the Roofstock Business Development team to discuss the problems he is solving in this sector and how he is able to provide more affordable options for students seeking housing while bringing in greater returns for the property owners renting to students.   Learn more about this project at www.Lumi.house   --- Transcript   Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Pierre: Hey, everyone. Welcome to the remote real estate investor podcast. My name is Pierre Carrillo. And today we have a different kind of episode. I was at the IMN conference in Miami last week. And we got to sit down with Ryan Stohl from Lumi. They have a unique approach to student housing. So we have our team member JP Will sit down with Ryan and talk about what problems are solving in the industry. Let's just jump right in.   JP: Hello, everyone. Welcome to the Roofstock Podcast. I'm JP Will I work for rootstock? I'm on the business development team. We're here at the IMM conference in Miami at the Loews hotel, and sitting with me is Ryan Stoll, founder and CEO of Lumi. House. So, Ryan, first question, just want to let everyone know who you are what your businesses so just let the viewers know what your business model is and how you came up with this idea and why you're at the IMM conference.   Ryan: Great. Thanks for having me. So living on campus has its own issues, right for students, they're outdated, they're cramped, they're inflexible. And living off campus can be challenging for students also. You have to find your fourth roommate split bills, find furniture or decide who cleans and when I was in college, we never clean it was a biohazard. So what we do is we give students a better alternative. We take single family homes, and we rent them out room by room to students in an all inclusive package. So it's taking the CO living concept that's become very popular in the multifamily space. And now we're moving into the single family space and focusing directly for students.   JP: Awesome. And and what what problem are you currently solving? I know if, if you're reaching out to these mom and pop investors, what problem are you sir solving? Why would they be using Lumi House? Is it because you're driving up revenue? Or is it just a better model for what they're looking for? If they're closer to a campus, etc,   Ryan: Right. I think it's two things. One is more revenue and also less headaches. For for the typical landlord have a four bedroom, five bedrooms, single family home, they will rent it to a family because it's difficult for them to rent out each room individually sign multiple leases, or even do the marketing. So there's an implied discount there. Whereas with students, they're typically willing to pay more to live in a dorm or off campus. So as an example, you know, we have five houses around the University of Miami as our proof of concept. And for students, it cost about $1,900 a month to live in a dorm on campus. And and living off campus. You know, if it's a new private student housing, one bedroom, the cheapest one that I found is 2500. And now certainly there are cheaper, traditional shared apartments but but then you look on the landlord side of a four bedroom house in Coral Gables, you'll see those being available for 4000 or slightly more than that per month.   So there, there's an implied per room rent price of $1,000 a month, but yet we know students are going to pay at least 1900 delivered in a dorm if not more. So we can offer the landlord at least 70% increase in gross rent. By the same time we took over the management. So they're making twice as much as they were expecting to without having to go through the headaches of managing the house themselves.   JP: And there's an attraction for the single family product because we both went to university and I know for if you're looking at living in a dorm, etc. You don't have as much room that single family product offers a yard? And is that what you're saying that more more students are coming to your product because of the demand of wanting a single family detached home as kind of their their dormitory, basically, because that's what you're offering?   Ryan: Yeah, yeah, I think I think so the dorms are cramped in the cost of living in a shared apartment nowadays is so expensive. And the idea was like as a freshman, you live in a dorm and you share a room. But then as you become, you know, as you start to become more of a junior, senior, then you get your own apartment. But rent prices have gotten so extreme, that now they're having to start sharing those again. So the the ability to to go to a single family house, have your own room and actually pay less than you would anywhere else is a huge draw for them. And I think that's part of the attraction.   And I think, again, we're solving a pain point that for some reason has been overlooked for the last 20-25 years. The same problems that I went through in college are the same ones students are going through now. And it seems like a lot of multifamily developers as student housing are only focused on you know, the richest 1% and trying to You know, sell them on the idea of having a dog park, a gym, spa, etc. You know, what we're focused on is the other 80% or more that are looking for a turnkey solution that parents are gonna feel safe with their children, they're the students only have to show up with a suitcase.   And then you layer on the fact that today there is a student housing crisis. And throughout most are not most but a lot of campuses around the United States, there's just not enough dorm capacity. And there's just not enough off campus housing capacity. And it takes a long time to build whether that's a dorm or multifamily complex, it takes time. So one of the advantages to our solution is that we're using existing housing stock and converting it into student housing. So we can address this problem immediately. And at the same time, do it in a way that's far more affordable for the average student.   JP: Now, where would you say your your kind of target market is for these this this student housing? Is it? I know you're saying University of Miami? But are you looking at different markets, different MSA is and what what would those markets be? And why are you choosing those markets? Does that make sense for your business model? Or is it? Is it because you're more attracted to these MSA is based on the growth etc?   Ryan: Yeah, it's a great question. We're focused on urban areas with a large student population, that's those are the first few criteria. So the more clustered it is, the more universities that are in a smaller area, the easier it is to manage the portfolio. And of course, having more students as you know, means there's a bigger opportunity. And then having a higher percentage of international students is great because they know when they apply or are accepted to college, they don't really know where to go what to do. And, and so we give them an easy route to living in a home with other international students so that they can learn and grow together.   So that's a big part of the, I'd say the one area that we're not focusing on today is is college towns, because there are there's a lot of off campus housing capacity. And for us to try to compete with that now, would it make sense because, you know, we're still a startup. And we need to have, you know, we need to have economies of scale to lower our costs to really start trying to compete. So for us the, the economic arbitrage, so to speak, that we're trying to exploit is really for urban areas like Houston, Atlanta, Boston, LA, Seattle, Chicago, etc.   Ryan: Okay. I understand the business model, I think it's a great idea. What are your key takeaways that you're hearing from? Because you're on the management side, so you're talking to these landlords who own these SFR assets, and you're driving up revenue for them, and just giving them a great product? What are your key takeaways from these investors? What are they giving you feedback from? I know, you said, you're at the University of Miami and you have a proof of concept of five SFR properties. What are you hearing from those landlords? Are they are they happy with your product? Are you providing a better service than what they were previously, excuse me previously having? And just if you want to give me that feedback, that'd be great.   Ryan: Yeah, I mean, certainly they love the increase in gross rents. The first objection we typically get from them as I don't want to rent to college students, but when they see the amount of money that we're the additional money that we're giving them each month, it more than compensates any potential damage. Student would do. But you know, so once once they are comfortable with that, and the fact that, you know, we require cosigners in two months security deposit, they they're very welcoming with the concepts. So I think it's, for them, it's very positive. It's something that, you know, they feel comfortable with, because now they don't have to spend as much time managing the property because, I mean, let's be honest, for the average SFR it's a very fragmented industry, right. And a lot of these landlords are unintended landlords, so to speak, where they had a house or to pass down to them. So they weren't ever really trying to create a business around it.   So they've been left to manage it on their own. Because a lot of small time property managers aren't that good in the biggest, most professional ones aren't going to try to snatch up, you know, all of these little individual one and two, portfolio mom and pops, so to speak. So they don't really have a whole lot of options. So we're, we're trying, we're trying to give them a better option and saying, Hey, look, we're happy to manage your property for you. We're happy to give you more income. And, you know, and also try to, you know, help solve a student housing problem.   JP: Yeah, I think the proof of concept it seems like it's working just for the viewers at home. Basically what he's doing is if you have current rent or market rent at a set amount, the student housing option lets you rent these per bedroom, so driving up, let's say have a four bedroom SFR asset, and current rents at 4000. If you're running these out per bedroom, and market is saying 2000 per room, you're essentially getting $8,000 a month from these SFR assets. So I think it's a great proof of concept. If you have any other information to give about your business to the viewers who they need to reach out to, and do they reach out to you on your website.   JP: Yeah, so we were a Miami based prop Tech, we are out raising our seed round right now so that we can expand across the country. So if if there are landlords that are interested, they can get on our website, there's a section for them to contact us. Of course, you can contact me on LinkedIn personally. We'd love to help people try to figure it out. Because I think as we as we discussed before, the the SFR market is very fragmented, but it's even more so for single family houses in urban areas, which is what we're targeting. So for us to really scale up and deliver this, this this concept nationally, we're looking for investors who want to start building portfolios of urban SFRs around campus communities, so that we can manage them and grow together.   Pierre: Alright everyone, that is our episode for today. Thank you so much to Ryan for sitting down and sharing his project, go check out his website, Lumi dot house, and we will catch you on the next episode. Happy investing