"In the coming months, there will be an opportunity to 'wedge' real estate. Through HouseHack™ - we can do it together, at scale."
($1=$1 valuation)
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2. Click Apply to Invest below.
3. Sign & wire by November 30, 2022 for the largest benefits.
MEET KEVIN HAS BEEN FEATURED IN THE FOLLOWING PUBLICATIONS FOR VARIOUS ENDEAVORS:
Home sales have already started dropping, inventory is rising, and the percentage of active listings with price drops has skyrocketed.
Now, prices are falling.
Using our own formula and experience, we are uniquely positioned to capitalize on this opportunity. We're inviting accredited investors to join us. In the future, we hope to accept non-accredited investors. The company will be valued at "Asset Value Raised," aka cash. That is, if we raise $100m, the valuation will be $100m. This is unusual. Most operating companies in real estate trade for AT LEAST 2.17x book (see $INVH on Yahoo Finance, checked 9-8-2022). If we traded for 2.17x with $100m in assets, we'd be worth $217 million. That means you might be getting a wedge deal ON your HouseHack investment.
With our fundraising today, we'll be ready to buy the dip in late 2022 and beyond.
The FASTEST monthly decline for real estate prices during the Great Recession was 1.9%. As of August 2022, we’re already down 5.2% from a March peak. That’s about 1% per month and may likely accelerate as mortgage rates retrace higher, now back over 6%. That's 3.5% higher than in December, which reduces purchasing power by about 35%! Think about that: most buyers can now ONLY afford homes 35% CHEAPER!
Mortgage rates are increasing fast. For non-cash buyers, every 1% increase in the mortgage rate decreases buying power by about 10%. This leads to an opportunity that disproportionately benefits investors over the typical "home buyer."
A buyer with a $2,000/month mortgage budget can afford a 30-year fixed loan of $500,000 at 2.5% interest but only a $313,000 loan at 6%. That's 37% LESS!
This leads to an incredible buying opportunity for investors well prepared with cash, like us.
- FOX Business
With national prices already falling, we expect the most severe declines in Zoomtowns like Boise or over-valued markets like San Francisco. There will be local-based opportunities to take advantage of.
- Bloomberg
We expected this to come. Kevin sold nearly all his properties starting in January 2022 as he prepared to buy the dip. He was one of the earliest to ring the alarm bells, get out, and raise money to invest himself in this SAME opportunity and at the same valuation: $1:$1.
While mortgage rates created the catalyst, this may snowball into bigger and bigger issues for the housing market as inventory rises, fear sets in, and prices continue to fall.
- Jerome Powell, Chair of the Federal Reserve
This means we may have the added benefit of an employment opportunity as it may be easier to hire high-quality contractors.
After selling over $150,000,000 in real estate and transacting over 200 individual deals - many of which with renovations and rentals often featuring our in-house construction team, we’re ready to scale our own formula.
This same formula will dress our short, medium, and long-term rentals in our “uniform,” which simplifies the design, ordering, and building processes with internally created standardized templates.
We've even built our own proprietary artificial intelligence software to help us identify deals fast. In the future, we may license this software in a SaaS model.
License tests Kevin has passed:
Real Estate Agent; Real Estate Broker; California General B Contractor License; NASAA Series 65, Investment Advisor Representative; FAA Drone Pilot; and Mortgage Loan Originator (Lender). [Note: Presently, Kevin only has active licenses in real estate and is in the process of activating his series 65].
1. Buy under-market wedge deals identified through our connections, our already-built AI wedge finder, and our research.
2. Fix them up using our market-tested "uniform."
3. Rent them out to qualified short-, medium-, and long-term tenants.
The market has highly-valued companies, with what we believe, are little actual competitive advantages. Most of these firms just buy market-value real estate and rent them out. Your classic: landlord who does little. This isn't fair to investors OR tenants.
Yelp and other review sites are littered with negative reviews by their tenants who have been subject to poor management.
Starwood Waypoint filed eviction notices on more than 30 percent of tenants, while Invitation Homes filed notices on nearly 15 percent, according to Reuters. In contrast, Kevin Paffrath has NEVER had an eviction. Tenants are our most-important asset; prioritizing their happiness leads to less turnover, lower costs, and fewer re-renovation expenses.
We believe there is an open opportunity to gain market share with a superior deal-making, deal-finding, renovation, and management experience.
Leveraging AI, software, short-term rentals, and medium-term rentals - we have massive potential: brought to you in this seed-round opportunity with a $1:$1 valuation.
$13 Billion Market Cap | NYSE: AMH
(as of 6/1/2022)
$23 Billion Market Cap | NYSE: INVH
(as of 6/1/2022)
1. Purchase properties with wedge potential (mostly single and multifamily).
2. Outfit them with the "Meet Kevin Uniform" that has been shown to increase rental returns.
This is the systematic approach we will use to renovate and increase rental values at scale. This is the same approach Kevin Paffrath has repeatedly optimized for his own properties.
3. Rent out properties for consistent, long-term revenues.
We will maximize every property's best use, which may be a short-term rental, a flex-term rental on a subscription model for professional flexibility (think Netflix for real estate), or a long-term lease. Our goal is to maximize the revenue of each property by ensuring the most profitable rental model is applied. Flex and short-term rentals will likely be furnished, and easily transitioned between the two models to take advantage of seasonal demand changes.
4. Turn over the portfolio of properties after substantial appreciation for a fresh portfolio that attracts high-quality tenants without having to invest in re-renovating. When possible, we'll leverage the tax advantages of 1031 exchanges.
Alternatively, we may compete with RoofStock ($1.9b Valuation) by selling equity tranches of the portfolio to registered investment advisors, pension funds, or the public.
A registered investment advisor with $2b+ AUM and $400m+ in annual inflows has privately expressed potential interest in investing in tranches of our portfolio.
5. Reinvest cash flow into acquiring more real estate and continuing to develop our in-house software, which will first be used for training and perfecting our internal models. Once our internal software has been refined with us as our own customer, we may launch the next phase of our company: SaaS. Other future expansion goals include exploring a banking charter to reduce borrowing costs and risk.
As we execute our core 5-stage model, we expect to develop our own software slowly and steadily. These tools will be used to support our current operations and may later be leveraged into Software as a Service (SaaS) offerings for recurring cash flow. To be clear, HouseHack is NOT intended to be a negative cash flowing, tech startup. 2023-2024 will likely be solely focused on buying wedge deals and stabilizing them.
1. Vacasa - $1.9b public valuation - A vacation rental management company that provides property management services. We plan to have our own branded short and medium-term rental platform in the future (likely 2025+).
2. Yardi and Appfolio - $1b valuation each - Property management software for long-term tenants, which we expect to build in the future (likely 2025+).
3. OpenDoor - $2.8b public valuation - Simplifying the buying and selling process through software. We expect to provide a better value for sellers than Opendoor day one, since we are not flippers. Regarding OpenDoor, we believe we can and will compete with them DAY ONE.
Our real-estate-first approach will allow us to build next-level projects, first for our own use to maximize efficiency, and then as potential SaaS offerings. This not only benefits ROI but also allows us to be more competitive on day 1 with our WedgeFinder software already in use.
Through HouseHack™, investors will be diversifying their portfolio with Real Estate exposure without the headaches and risk of:
Instead of investing in a syndication, which is often designed to make the promoter (the face of the business) rich or allow them to front run your deals (buy them alone and sell them to the syndication for more), HouseHack™ is designed to give ALL the benefits of a promoter to the investor. The investor is the partner, not the product as is in a syndication.
Also, many syndications and REITs are incentivized to deploy cash, even at ABOVE market prices, and wait. It's a use-it-or-lose-it approach (REITs have legal requirements to deploy or return cash. Syndications either deploy cash or close a fund offering unfilled). HouseHack™ is different. We have no pressure to deploy cash at inopportune times - we can wait for what we believe to be the right market signals to invest. We are incentivized to buy BELOW market value, build equity, build cashflow, and reduce risk. We'll do so by scaling all 3: short, medium, and long-term rentals with single-family and multi-family properties. And, in the future, license suites of real estate software.
To give the most value to our investors and do our best for our community, the HouseHack™ seed round won't have an inflated valuation or any initial dilution. Have you heard of WeWork? Their founder, via Flow, just reportedly raised over $350 MILLION at a valuation OVER $1 BILLION. That means investors reportedly paid at least $2.85 for each $1 invested into the Flow startup.
Here, you're able to invest $1 for $1. The shares Kevin Paffrath buys will cost the same as the shares you buy $1 = $1. That means, if we raise $100 million and of that Kevin invests $10 million, the company will be valued at $100m and Kevin will own 10%. Why? The more we can raise today, the more we can beat OpenDoor, Redfin, RoofStock, and others at scale.
Investors will not be paying any typical "premium valuation" for our expertise, team, resources, or the potential of this opportunity.
Shares Kevin purchases himself are at the same valuation as all other investors in the seed round. This means he is paying just as much to buy shares as you would as an investor.
To align shareholder interests and maximize growth, Kevin Paffrath will not take an initial salary or bonuses. Kevin and early employees/board members are expected to receive stock options ONLY at IPO/upon IPO-like sale event.
There is no traditional "dilution" usually found in seed rounds. Instead, key-people like our founder, Kevin, are only compensated after an IPO or IPO-like sale event.
The earlier you fund, the more FREE warrants (similar to stock options) you receive. These warrants will allow you to, in the future, invest more at the SEED-ROUND valuation ($1=$1).
This is an optional increase in the future of your investment at the same valuation if we have a "Second-Seed" call. You are NOT obligated to utilize these options and they will expire 60 days after the second-seed round begins. Investors who have funded before certain deadlines will have the benefit of participating in the second-seed round and purchase additional shares based on how early they funded.
For example, if you invest $300,000 before November 30th, you'd have the option to invest an additional $120,000 (40%) at the $1=$1 valuation in the second-seed round. If you invested $50,000 on November 15th, you'd have the option to invest an additional $20,000 (40%) at the original seed-round valuation, in the future.
Additionally, if you are a course member of Kevin Paffrath’s, you'll have the ability to add another 10% to the table above. So, if you invested $300,000 before November 30th, you'd have the option to invest an additional total of $150,000 (50%) at the $1=$1 valuation.
Kevin's investment will be at the same valuation you're receiving! That's why we call these shares "Founder Shares." Kevin's shares, however, will be different in that they will have voting rights.
INVEST IN HOUSEHACK™
Invest now while our Seed Round is open.
This may be the only time we raise funds before our IPO.
We know the model. Now it's time to grow. With scale, we can likely have significantly better margins than a small-time investor.
Only around 20% of single-family home buyers are investors. This means most buyers are homebuyers unlikely aware of how to "wedge" real estate, significantly reducing our competition and hopefully increasing our returns.
Our wedge-deal-to-rental model allows us to potentially pay sellers more as we can acquire deals at profitable prices, while still beating flippers or iBuyers.
This may give us an incredibly large pool of properties to acquire as every owner that sells to Redfin or OpenDoor may benefit by selling to us instead. This is a win-win. More money for sellers. More assets for HouseHack. More quality properties for tenants.
We plan to be more competitive for sellers, while also being more profitable. That's because we won't have 5-10% in selling fees to deal with. That's another $25,000-$50,000 of margin on a $500,000 property. This structure can make deal sourcing easier. We also expect to support the agent and wholesaling community with potential commission bonuses to build critical front-line relationships.
With an active reach of millions on social media, we have the advantage of being able to tap into our own built-in community to buy homes by building partnerships with agents, lenders, and contractors - as well as finding tenants and future investors.
If deemed profitable for the company and its investors, we may offer stock in HouseHack™ to tenants or agents who work with us.
This could increase agent-deal-finding loyalty, reduce our acquisition costs substantially, and increase our profit per deal. Think about that: a landlord who helps tenants build wealth. This is the type of goodwill and forward company America needs.
As a bonus, this could increase tenant satisfaction, minimize property damage, and increase tenant longevity. Quality tenants and timely-paying tenants may also be encouraged to move to other HouseHack™ rentals, minimizing screening risk and streamline tenant moves.
We’ll have the option of using section 1031 tax-deferred, like-kind exchanges to defer taxes and increase shareholder value. Though deferred, some consider this tax-free (delayed) equity appreciation. We can also, at scale, implement IRS section 179, which allows accelerated depreciation through cost segregation.
If none of the above sounds familiar, just know that we will prioritize using every tax-advantage strategy we can to benefit shareholders.
DOWNLOAD THE PDF VERSION OF THIS INFORMATION
Learn how you can capitalize on the changing tide with us.
1
Add real estate exposure to your portfolio the "Meet Kevin way," but with the benefit of scale for even more diversification. You can get exposure to many different types of properties, short-, medium-, and long-term tenants, and different locations while using our expertise to get these under market value when possible.
2
You'll own HouseHack™ (the business) by investing in our Seed Round. If we can reach even 5% of the market cap of top leaders there is an incredible growth opportunity. The companies we've talked about on this page represent nearly $50b in valuation. We may likely be starting at well under 1% of that.
3
The valuation and structure for our Seed Round are made to reward our community. At this time, there is no typical dilution built-in to inflate the valuation for the company resources, the opportunity, or our expertise. What is raised will be what we sell shares for. $1=$1.
We want our HouseHack™ investor community to be tight-knit. We may have ongoing investor benefits which may include private events and experiences with Kevin Paffrath and the HouseHack™ team.
Investors who have made their investment before certain dates will receive option warrants
If you're interested in investing in HouseHack™, click Apply To Invest. You'll have a few documents to approve and sign. After funding your investment, you'll obtain your stock issuance details electronically.
*For those who need to sell their shares before we go public, we may offer the ability to buy back your shares or may offer them for sale to our community of 2 million followers. However, we cannot guarantee this will happen as our goal is to buy real estate, not buy back shares - for now at least.
After due diligence, we're confident we have what it takes to capitalize on this next real estate cycle. The dip is coming and we'll be ready.
1
We’ve already proven the wedge-deal-to-rental model can be successful and now we’ll have the cost savings of economies of scale.
2
Our social community, business model, and in-house proprietary AI give us extra resources our competition may not have.
3
From deal analysis and acquisition to construction and leasing, our in-house team is highly experienced and has a track record of execution.
4
Multi-trillion dollar market with only a minority of investors.
5
With rising rates and sharply cooling demand, we'll be incredibly well positioned with the negotiating power of cash.
INVEST IN HOUSEHACK™
Invest now while our Seed Round is open with zero dilution.
This is the only time we plan on raising funds before our IPO.
NOTE: The HouseHack™ Seed Round Will Close Soon And This Page Will Be Replaced With Our Corporate Site.
Fill out the form and answer some questions.
You may use investready.com or equivalent to get verified.
This is an agreement between you and HouseHack™ to buy shares of the company at the price of $1 per share.
After we've confirmed your status and accepted your application and funds, we will send you confirmation of your purchase and you'll receive electronic stock certificates.
"This is by far my biggest and boldest venture yet. This is the legacy that we'll be leaving for our children and our children's children.
I want my community to benefit from this new chapter, and by being an investor, you will likely reap the rewards of my dedication to HouseHack™.
I hope you consider joining me by investing below."
INVEST IN HOUSEHACK™
Invest now. Our Seed Round is open.
This may be the only time we raise funds before our IPO.
Check with your custodian, who may want a copy of our PPM, slide deck, etc. As long as your accredited, you should be able to. If you're investing using your Roth IRA, you could potentially grow the value of your HouseHack equity tax-free.
If you can get a letter verifying your status as an accredited investor at our HouseHack InvestReady page, we should be able to accept your investment. If you wire international funds, your currency will be converted immediately and you will be given the shares for the net US Dollars received. So in short, yes, as long as you're accredited and can get a letter from InvestReady, we should be able to enable you to invest with us - subject to any potential bans of such investments by your country (we have not encountered one yet).
Generally, you are an accredited investor if any of these are true:
The best way to get accredited and the fastest way to get your investment accepted is by going to sites like Verify Investor or InvestReady.
After you've invested, we will process your investment. Note: It will take a few business days AFTER receiving a wire to send you a confirmation. Wires must be cleared before memo's and full details populate. Once they're cleared, we have to process them - and we'll do our best to do so quickly. When the round closes, you'll receive an electronic stock certificate that proves the shares you own of HouseHack™.
The opportunity to invest will not be open-ended. We will not be taking on an unlimited amount of investment. We'll only take on funds we believe we can deploy for returns within a reasonable amount of time. Therefore, the fundraising period may end soon and without notice.
We're not sure. The next time you can invest might be in the event we have an IPO.
Watch our HouseHack investor Q&A for information in this YouTube video.
Meet Kevin Paffrath created HouseHack to buy a lot of single-family homes and multi-family apartments. HouseHack wants to focus on fixer-uppers or properties we can increase the value of, day 1. While the market falls, we expect to setup in approximately 3-5 different markets throughout the country (diversified locations). Then, when the time is right, we'll start buying. We'll find those properties with our Wedge Finder AI, through agent connections, referrals, and otherwise. We plan to buy properties cash then add value / renovate them as needed by coordinating subcontractors directly. We'll manage the properties in-house. In the future, we'll refinance them and buy more. We'll take cashflow and reinvest that into opportunities (no dividends for now). In the future, we may license our internal software and sell that software as a service. We may also expand into banking and FinTech. Our CEO and founder is expected to receive no pay, salary, or bonus until IPO.
*This is a generalization and is our opinion of the comparisons.
With our team, business model, and community we are uniquely positioned to capitalize on what might be the greatest real estate opportunity of the rest of our lives.
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DISCLAIMER: INVESTMENTS IN HOUSEHACK™ ARE SPECULATIVE, ILLIQUID, AND INVOLVE A HIGH DEGREE OF RISK, INCLUDING THE POSSIBLE LOSS OF YOUR ENTIRE INVESTMENT.
Affiliated Business Disclosure:
Kevin Paffrath is our founder and CEO. We are a Wyoming c-corporation.
Kevin Paffrath himself is a licensed real estate agent via 01893132. Kevin Paffrath, #DRE 01893132.
Kevin Paffrath is in the process of registering Plato's Philosophy, a California Limited Liability Company, as a Registered Investment Advisor (Series 65 license).
Via this firm, Kevin Paffrath in coordination with Tidal have filed 3 exchange-traded funds. This firm may also in the future sell educational content. Any educational content created by Kevin Paffrath may reference HouseHack or use HouseHack properties as an example without compensation to HouseHack.
HouseHack does not benefit from you joining Kevin Paffrath's courses to receive a 10% warrant bonus other than providing HouseHack more cash for investments at a $1:$1 valuation. There is no commission for HouseHack for referring course members and no course memberships are being "gifted" to investors.
All of the texts, emails, video, or materials you may receive are for informational purposes only. The information contained in them is not a solicitation to invest in any security. If you have any questions about the information, please standby for our investor relations contact information, private placement memorandum, and subscription agreement.
