From Airbnb to Co-Living: How Brenda Kwateng Pivoted After Baltimore Rule Changes

Brenda Kwateng (00:00)
Initially we started off supporting Airbnb and we’re growing in that market, had not only had some units that were arbitrage that we were renting and doing Airbnb, but we also had fixed assets. And around July of 2022, Baltimore City changed their regulations. And unless you lived in the property, you could not do it as an Airbnb. And so we had to figure out something quick. And as we looked at the opportunity,

Co-living came up as something a little bit more stable than single family housing in regards to not only income, but in terms of the stability of the the tenant that we were looking after, the member we were looking for. And so that’s what we pivoted to and we have been rolling ever since.

Joseph Crooms (02:14)
Hey everyone, welcome to *Investor Fuel Real Estate Pros Podcast*.

My name is Joseph Crooms. Today I’m joined by someone I’ve been looking forward to chatting with. Her name is Brenda. I’m not going to try, or I would try, but I’m going to ask Brenda to say her last name for her. So when we get there, I’m gonna say she’s operating in the niche of I believe it’s co-housing it, but I’ll let her explain that a little more. But Brenda

Tell us your first and last name for me, please.

Brenda Kwateng (02:48)
Good job. Well, thank you so much for an amazing introduction. My name is Brenda Kwateng I am based in Baltimore, Maryland, where I run and operate TCF Lodgings, which is a co-living organization providing housing for working professionals and students in the area.

Joseph Crooms (03:05)
Sounds like a plan. So let’s dive right into this. So Brenda, if for people who may not be familiar with your business, give us the short version. What’s your main focus these days and what markets are you operating in?

Brenda Kwateng (03:16)
Okay. So our focus is we take a traditional single family house and provide as many bedrooms and two bathrooms as possible. This is an all-inclusive price, so all utilities, gas, electric, internet, water, as well as security system is included in the pricing of the room. In addition to that, our units are fully furnished. So you don’t have to worry about struggling with a mattress to get in the door or figuring out how to work out the box spring. We’ve taken care of that all for you. Your biggest worry is

How do I get to from where I am to my workplace? And how do I make sure that I am secure and safe and able to thrive in this environment and grow in the community that’s in the household? We focus right now in Baltimore, Maryland, but we have been looking and are really excited about some expansion opportunities for some partners that don’t only allow us to be here, but also related to my last name, Kwateng, to overseas to West Africa.

Joseph Crooms (04:09)
Wow, amazing. What is your primary or clientele that you are marketing to?

Brenda Kwateng (04:18)
So we have two clientele, one based around universities, which is with relatively hot and heavy right now. So supporting student housing around some of the universities here in Baltimore, Maryland, in addition to the housing supporting working professionals. And working professionals is folks generally that are working and professionally doing so and not kind of ditching between job and job. We look for individuals that have steady income, that are looking to have a safe and clean place to live and want to engage and join a community and grow and learn from that community in the house.

Joseph Crooms (04:49)
The houses that you look for, how many bedrooms is the ideal house?

Brenda Kwateng (04:55)
It’s more around the square footage, I would say, Joe, not necessarily the bedrooms, because we’re able to convert rooms as long as obviously it meets the legal requirements in our jurisdiction for a bedroom, which is generally at least the second means of egress, a closeted space, and minimally an eight by ten space. None of our rooms are that small. We don’t want anybody to live in a shoebox. But as we look at our houses, our portfolio is has kind of a very variation. We have, for example, very large brownstone that runs around about 4,500 square feet.

To even a small condo that runs closer to like eleven hundred to twelve hundred square feet. But in any house that we have, the ratio between bedrooms to bathrooms is no more than three to one. In some cases we’re very able we’re able to support individuals even with a one on one so ensuite bathroom for the room that they’re actually selecting.

Joseph Crooms (06:29)
Hmm. So let me ask you this. Do you do renovation on certain houses? Like say if a client has a second house and he said, Hey, this is what I wanna do. Are you able to help in that way?

Brenda Kwateng (06:41)
Also. Almost definitely. We actually one of our last projects was a complete gut renovation that is close to where we call Pigtown in Baltimore, Maryland. And we actually took the entire house, it was a vacant property, gutted it, re fur reflipped the floor plan, and now in that home have four bedrooms and two and a half bathrooms for the residents in that property.

Joseph Crooms (07:04)
You mentioned your portfolio. So how long have you been in business doing this?

Brenda Kwateng (07:14)
So we started our first about five years now. We have under the TCF Lodgings six properties and then with partnerships another two to three that we work with. And then we also help manage other properties for other individuals that have asked us to be agents.

Joseph Crooms (07:30)
Okay. So let me ask you this. So you start about five or six years, in the last two years, what is your portfolio? What is your book of business like now?

Brenda Kwateng (07:41)
It’s amazingly strong. We’ve been able to, not only learn our market, but figure out, what really works for the people that we’re looking to serve. And so that’s allowed us to really meet the opportunity. So right now is a very crazy season for us because students are going back to school. So making sure those properties that are in those locations that are prime for those students are ready to go. So that’s where we’re focused.

Joseph Crooms (08:04)
How many book a business for students and I guess you have quite a few people that are looking out of state coming to you to Baltimore, how many colleges do you serve?

Brenda Kwateng (08:17)
So the closest universities to so as we divide Baltimore into East and West Baltimore, East Baltimore has three properties and they serve Morgan State University and Towson University. The ones in West Baltimore are closest to the University of Maryland, University of Baltimore, also Coppin State University, and then the University of Maryland Medical Center, which includes a pharmacy, nursing, dental, and medical school.

So great opportunities in terms of with individuals looking for housing in those areas. And that’s one of the things that we kind of focus on. We try and make sure we’re within a half a mile to no more than three quarters of a mile, so walking distance from these locations to give greater access for our house members.

Joseph Crooms (09:00)
Brenda, do you have like a is it more seasonal or in the summers, what happens during the summer breaks or and I guess you got grad students, but can you explain to me what happens during summer break?

Brenda Kwateng (09:12)
Sure. So we actually only do twelve month leases. If the individuals choose to do a ten month lease at a premium, so it’s still still essentially works out to be the same as a twelve month lease. We prefer people to obviously be in there all year long, but if not, we have security measures if for some reason a house is low on occupancy to ensure that we don’t have anybody, that squats or something along those lines.

We have eleven rooms with another seven coming up within the next three weeks. And we have of those seven rooms, four of them are already booked. So we’re looking to book the last three as we finish off that transaction and open up that house.

Joseph Crooms (09:45)
So now let’s go to the other side. So what about those on the professional end? Okay. Are a little longer term or

Brenda Kwateng (09:53)
Yeah, they they do tend to be longer term. Once somebody stayed with us and they really kind of settle in and enjoy the fact of the community of the household. I think our longest running tenant, so we started in twenty one, is around about four years. And I would say of those folks that are professionals, generally unless they’ve had some kind of work change in terms of they’ve gone to a different employer or family matters, the family matters require them to leave town.

They pretty much stay with us.

Joseph Crooms (10:24)
And what is your book of business on the professional end?

Brenda Kwateng (10:27)
So the book of business on the professional end is another eighteen to twenty rooms.

Joseph Crooms (11:13)
And what does that translate to a month with both of them combined?

Brenda Kwateng (11:17)
Both of them combine just a little under $30,000 a month in gross revenue.

Joseph Crooms (11:21)
And how long you’ve been at that level?

Brenda Kwateng (11:24)
We have been fully open for the book of business we have now since June of last year. We had a couple of projects, like I said, the one that was the major renovation that took a little bit longer. So that property took around about three and a half years to come to market. But we’re excited that it did.

Joseph Crooms (11:40)
That was good. Now you’re talking major renovations. Who do you partner with? Tell me some of your partnering groups.

Brenda Kwateng (11:46)
Sure. One of our major partnering groups for HVAC is Fire and Ice HVAC here in Baltimore, Maryland. Mark Ash is a phenomenal partner and just a great person in terms of walking through and helping us figure out not only our HVAC needs, but also kind of leaning in, sometimes providing guidance around plumbing. We have a couple of electrical contractors and of course my electrical contractor’s name has gone out of my head.

And then we have some smaller companies that we work with. But we’ve been very, very fortunate that we’ve been able to not only identify and work with contractors, but work with them consistently and build up a relationship in regards to, moving forward and growing not only our business, but their business too.

Joseph Crooms (12:31)
So every operator I know, they always have a I don’t wanna say a horror story, but a time when they had to pivot very quickly. Can you share one of those moments with us?

Brenda Kwateng (12:41)
Yeah, that was the beginning of our journey. So initially we started off supporting Airbnb and we’re growing in that market, had not only had some units that were arbitrage that we were renting and doing Airbnb, but we also had fixed assets. And around July of 2022, Baltimore City changed their regulations. And unless you lived in the property, you could not do it as an Airbnb. And so we had to figure out something quick. And as we looked at the opportunity,

Co-living came up as something a little bit more stable than single family housing in regards to not only income, but in terms of the stability of the tenant that we were looking after, the member we were looking for. And so that’s what we pivoted to and we have been rolling ever since.

Joseph Crooms (13:25)
Do you have any commercial properties that do you help rent that they just, anything like that or you just strictly residential?

Brenda Kwateng (13:33)
Currently we’re strictly residential. There are some opportunities we’ve seen with doing co-living in some commercial or conversion hotel space, but at this time we’re sticking with our residential market. If we get an opportunity in commercial, I think we would explore it, but it’s gotta be with the right partner and looking at the right location too.

Joseph Crooms (13:55)
So that’s the kind of stuff that that that’s a very wise thing that you’re doing. You’re looking at your market, you seem to be very educated. Let me ask you this. What are you most focused on solving or scaling next?

Brenda Kwateng (14:09)
I would say our scaling here in Baltimore City around definitely our student groups. And then looking to support, we have some nonprofit partners that need really housing in other areas of the state of Maryland. And so looking to see how we can support them, where the market is going to lead us, and we’re also in these jurisdictions, what is the friendliness or what is the engagement around this?

Maryland is going through a lot of changes and one of the biggest changes coming up is the ability to start building ADUs, which are additional dwelling units. And so we realize that this is a really key opportunity that it’s been identified as a state that we need to find housing for people that’s affordable. And so we’re looking to jump in there and support as much as we can.

Joseph Crooms (14:53)
So on the ADU, how do you plan on how do you see you’re leveraging that knowledge?

Brenda Kwateng (14:58)
So depending on the locations and the size of the lots, because if we have a single family property, but then have another half acre to a quarter acre behind it, do we have now the capability to put one or two ADU units? How do we then now allow for in our units currently they do we restrict minors because of multiple adults that are not related? And so in an ADU, we could possibly set it up for maybe a single family or a single parent household.

That could now accommodate their family at, more market rates but still have an affordable living accommodation for them.

Joseph Crooms (15:34)
So let me understand. You’re saying so it would be more or less for the general public?

Brenda Kwateng (15:38)
Yes. So I mean right now we’re open to the general public too, but we know that there is a like we have a partner where that’s one of the things that we’re struggling with to find housing for single parent households. And so where can we find a mix of co-living community, but within the security and safety for someone that has a minor living with them? And a small ADU would actually be perfect because it would be a standalone unit and would allow them to do that.

Joseph Crooms (16:04)
And what’s the acronym ADU? What does that stand for?

Brenda Kwateng (16:07)
An additional dwelling unit.

Joseph Crooms (16:10)
Okay, that’s big, especially the next move can either compound things or create chaos, depending on how you play it. Now I know a lot of our listeners are either early in their journey or looking to level up, and I think this benefit they’ll benefit from this hearing this. When it comes to building relationships and growing your network, what has made the biggest difference for you?

Brenda Kwateng (16:34)
I think it’s the big the biggest difference has been a shift. A lot of times when you’re starting out, you really want, you think and you focus about I’ve got to get after money, I’ve got to meet people for money, I need to do this, that, the other. When actually it’s really more important to build social capital, to build relationships, to build trust. Allow people to ask you those questions that you may or may not be able to answer, and then look to either solve them yourself or solve them with a partner.

We’ve been very fortunate we were able to do a pitch competition last year for Innovation Works and have a great mentor from there, Chris Warman. I should shout him out for Reinvestment Fund here in Baltimore, Maryland. And Chris was really strategic about making sure I met other people in the community that were doing business or not even doing business, but were aligned with what I was looking to do and how I was bringing to looking to bring housing to the community. And out of some of those relationships.

We’ve gotten investment partners. And so it’s not about the money, it’s about who you are, what you represent, what you’re looking to grow, and how you can partner and grow with others. To the same extent, to me, I feel like there’s always a need that it’s not about me get getting something, but also giving. So within my social economic environment, like I have another social entrepreneur that I work with that do has a nonprofit that helps first-time college students.

So if I have someone that comes into my house that fits that profile, I refer them to her because that’s an opportunity for her not only to grow her business, but also for me to help the members in my house to have a better life experience while they’re with us.

Joseph Crooms (18:13)
Well, let me put this in also to Brenda. You can tell them about our show and let them use your name and we would love to have them especially on our podcast. So any reference that you have, bring them on. We’ll interview them as well. Let me ask you, are you considered a real estate broker or which what how would we define your niche?

Brenda Kwateng (18:33)
I am a real estate professional. I am not a broker. I do not hold a real estate license. I actually work with realtors. That’s their specialty. That’s their niche. I know what I’m looking for in terms of our buy box and I work with real estate professionals that actually are licensed to do that here. So yeah.

Joseph Crooms (18:49)
That’s the first time I heard of a real estate professional. So you’ve heard it first from Brenda, all guys on show. She’s a real estate professional. I love it. So the relationships is everything. Thank you for sharing. I wish we had so much more time to really explore. Is there a question that I didn’t ask that you think that we should know though?

Brenda Kwateng (19:12)
About my business.

How to get in touch with us if they’d like to learn more about

Joseph Crooms (19:16)
Totally. I got you covered on that. But I just wanted to know is there anything but since you already were so kind to help me with the segue, hey Brenda, how do we get in touch with you?

Brenda Kwateng (19:27)
Our website www.Tcflodgings.Com, Instagram and Facebook @TCFLodgings, L-O-D-G-I-N-G-S dot com, and our phone number 410-429-0746.

Joseph Crooms (19:45)
Perfect. Well listen, I appreciate your time, Brenda. Your profession, your new niche, real estate professional, I will remember that one. We need more people in spaces who are doing it the right way. Thanks again for being here, Brenda. And also for being so conscientious and so caring about the community, especially our up and comes coming scholars. And for those of you tuning in.

I know you got value from this. Make sure you subscribe. We got more conversations coming from Pete operators just like Brenda, who’s out there building real businesses. We’ll see you on the next episode of Brenda. It’s called *Investor Fuel Real Estate Pros Podcast*. Hey Brenda, tell everybody we’ll see you at the next episode.

Brenda Kwateng (20:33)
Thank you, Joe, and we’ll see you at the next episode.