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This conversation explores the profound impact that living spaces can have on individuals and communities, highlighting personal stories and emotional connections to homes.
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Charles Rossano (00:00)
we already have a couple properties that are being leveraged by the nonprofits. And to talk to some of the clients about the experience that they have, we spoke to one who, She basically was in the house for a day, and she almost broke down crying saying, I can’t believe I’m living in this type of home. She’s like, I never want to leave. So it’s just the impact that you can have on people’s lives is just tremendous.Michelle Kesil (01:54)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone that I’m looking forward to chatting with, Charles Rossano, who’s been making serious moves as a co-founder of Cohaven Capital, which is a co-living investment fund. So I’m excited to have you on the show today, Charles.Charles Rossano (02:17)
Thank you for having me. I’m very much looking forward to it.Michelle Kesil (02:21)
Of course, I think our listeners are really going to take something away from how you’re approaching tackling the affordable housing market through your co-living strategies. So let’s dive in.Awesome. First off, for those who are not yet familiar with you and your world, can you share what your main focus is these days?
Charles Rossano (02:46)
Sounds great. Absolutely. So as you mentioned, we’re just primarily focused on the co-living strategy, the asset class. So we see affordable housing as just being a tremendous challenge, not just for today, but in the years to come. And so what we do, what co-living in essence does is we focus on acquiring single-family homes or small multifamily properties, primarily distressed. We go in. Weacquire them, we rehab them, we make them updated so they’re beautiful homes, and in essence we rent them out by the room. So we take a three bedroom or four bedroom home, we convert it into a six, seven, or even a ten bedroom home that allows for a multitude of individuals to live ⁓ within under the same roof while ahead sharing a kitchen or common area but having private bedrooms.
Michelle Kesil (03:42)
Awesome, love that you’re doing that, that’s so cool. Are you operating in specific markets? Where are you currently creating this?Charles Rossano (03:52)
Yeah, that’s great question. So we currently are focused on four primary metro areas, so mostly secondary markets. So we’re in Charlotte, Houston, San Antonio, and Phoenix. So we look very closely at migration trends. We’re population migration. We look at a lot of economic factors, as well as regulatory ⁓ components to really identify and determine what markets we’re going to go into before we even acquire first propertyMichelle Kesil (04:23)
Yeah, absolutely. What got you started in this world of co-living? What made you choose this and how did you start your first endeavor?Charles Rossano (05:23)
Yeah, great question. So prior to real estate, my background really has been in around building and scaling small to mid-sized companies. So even being as early as the first employee, so everything from sales, marketing, operations, et cetera. And did that for a large part of my career. Got into real estate about 10 years ago or so. And really came across co-living a couple years ago.And it was really interesting to see what we were trying to do. My partner and I were looking to identify. We were kind of the weekend investors, so to speak, a couple rental properties, fix and flips, et cetera. And what we were looking to do is really marry financial returns, financial impact, with social impact. And so affordable housing, obviously, over the last handful of years has just
exploded as a challenge. And like we said, don’t think it’s going anywhere anytime soon, unfortunately. And so we started exploring different strategies of how we could address that factor and make it meaningful for investors as well. And came across co-living. so it’s interesting. I didn’t know what co-living was at the time. And then I thought back to college days. right? It’s not that much different from that student housing of
you know, being in a house with seven or 10 other of your college friends, except more at a professional level. So we decided to target a population that’s earning about 15 to 30, $35 an hour to really focus on that workforce to fill our rooms. And we acquired our first property probably around middle of last year.
And since then, we’re at about just over 200 units across the four different markets. We’re also starting to formulate relationships with nonprofits. So we’re helping to support not only the private workforce, but also nonprofits in terms of the supportive housing needs as well.
Michelle Kesil (07:33)
Yeah, that’s incredible. totally. Like college, I love that. So how are you collaborating with investors on this project?Charles Rossano (07:42)
So what we do is we bring investors in, capital partners who are interested in either a more sustained conservative fixed income approach that are just looking for that constant return, if you will, as well as those who are looking to become equity partners. So we have offerings for both.⁓ We are looking to work with accredited investors and we bring them in to be again part of that not only that financial impact but that social impact as well. So we’ve had great experience with a lot of our investors. We work very closely with them in terms of making them aware of what’s occurring at all times, providing a lot of transparency through our investor platform, et cetera. But we’ve had a lot of our investors come back and say,
how much more are you scaling? How can we be more involved? And it’s been a great experience thus far.
Michelle Kesil (08:38)
Yeah, incredible. What have been some of the keys that have allowed your business to grow and to run smoothly?Charles Rossano (08:47)
So that’s a great question, Michelle. Some of the keys has really been my partner and I have really focused on building a solid foundation and really focused on formulating the right type of processes, the right technology. We’ve even built our own internal property management company specific for co-living.So what we’ve done is we’ve laid the groundwork to allow ourselves and our fund and our business to scale, where one of the biggest challenges in this space is that a lot of operators are able to bring on one, two, three, maybe even five properties. But once you get to that point, it’s almost like a ceiling that you can’t break through because it just becomes too dynamic. So we’ve built that in advance.
And as I mentioned, we’re past the 200 unit mark and we’re continuing to scale there. So that’s really been a strong advantage for us, as well as the networks that we build. So for the type of growth that we’re looking at, the acquisition of properties, the network that we built in terms of off market, deal flow, curated properties that we’re getting to before they’re coming to market, even on market, the type of deals we can get, as well as
boots on the ground in terms of all the markets we’re in to make sure that the rehabs are being done correctly on time, as well as the properties are getting filled with the right type of individuals through our screening process that we leverage, and then making sure that everyone in the home is getting along well to be able to maximize the experience for everyone.
Michelle Kesil (11:07)
Yeah, amazing. Yeah, how does that work with making sure everyone that’s under the same roof is like the right fit?Charles Rossano (11:14)
So that’s a question that everyone asks. And it’s hard enough even when it’s your own family under one roof to get along together. And so what we do is we spend a lot of time up front in our screening process, Michelle. And we have a multi-tiered system where it’s not as if somebody who just raises their hand and says, can I stay in that room? We say, sure, that’s great. We actually do background checks. We do criminal checks. We do a screening interview.To make sure that they’d be a right fit for that that home and what we’re looking to do is we’re looking to build a community within that home So for us the terms of the stays are either 6 9 or 12 months oftentimes We have automatic renewals So we want to make sure that as these people are living under the same roof together that there is the right type of community feel and so
We do that, but there’s also the little things that we do. And what I mean by that is there may be situations where, you know, every other Friday, we may even buy ingredients for them to do a Friday night meal where they cook together. Or little community events within the house to build those relationships, to build that relationship equity, so to speak. We also, have processes in place where, you know, de-escalation processes.
If people aren’t getting along well, if there’s an argument, things along those lines, we have processes in place that we help deescalate and it runs very smoothly.
Michelle Kesil (12:46)
Yeah, I love that. That’s good to hear. I’m sure that people living under the same roof are appreciative of those things.Charles Rossano (12:56)
Absolutely.I’ll even give you one small example, but it goes a long way, believe it or not. We’ve color coded plates and utensils. So even from the standpoint of making sure that these are your dedicated plates, or if you’re, you know, if somebody doesn’t clean their dishes, everyone knows who those dishes belong to. Believe it or not, those are the small things that can escalate very quickly within a home. And so that really goes a long way.
Michelle Kesil (13:24)
Yeah, that’s definitely a smart thing to do. Cool. So what are you most focused on solving or scaling to next in this business?Charles Rossano (13:34)
So we’re most focused right now on really helping transition quite a bit on the nonprofit sector as well. It’s amazing what the need and demand is to help with ⁓ housing, not just from, the. again the private sectorbut the nonprofit. We’ve been in conversations with a multitude of nonprofit organizations where their client, what they call their clients, they’re either housed in motels or hotels where the quality of living is just completely diminished. They don’t have long stays there. They can’t even provide enough rooms for those that they need.
Unfortunately, it almost feels like there’s an infinite need for that. And so what we’re looking to do is we’re looking to aggressively help tackle that. Obviously, we know we’re not a silver bullet that’s going to solve all the problems, but we’re looking to do our share. And so with that, we’re looking to partner with a number of very strong nonprofits. it’s amazing when you talk to some of their clients
we already have a couple properties that are being leveraged by the nonprofits. And you know to talk to some of the clients about the experience that they have, we spoke to one who, She basically was in the house for a day, and she almost broke down crying saying, I can’t believe I’m living in this type of home. She’s like, I never want to leave. So it’s just the impact that you can have on people’s lives is just tremendous.
Michelle Kesil (15:54)
Yeah, that’s really beautiful that you’re able to help people and make them feel at home.Charles Rossano (16:01)
Absolutely, absolutely. And then in addition to that, obviously to be able to again marry that with the financial returns for our investors, it just makes it a holistic opportunity.Michelle Kesil (16:12)
Sure. Are there specific qualities or characteristics that the investors need to have in order to join this project?Charles Rossano (16:23)
Yeah, that’s a great question, Michelle. So we, to your point, we don’t bring on just any capital investor. So for us, clearly the checking of the box is, you know, accredited ⁓ investor. We look for oftentimes those who are either have invested previously in real estate or at least somewhat knowledgeable. But by the same token,We’re looking for those investors who not only are looking for the strong returns that we’re able to provide, but do understand the impact that we’re looking to have. And it really resonates with them. So we’re looking for kind of the, what we coin investors with the soul. So that way, you know ultimately we’re all in alignment. We’re all moving in the same direction, which ultimately benefits everyone.
And so with that being said, really, our mission as well as our return has to resonate with the type of capital partners that we work with
Michelle Kesil (17:25)
Yeah, absolutely, that resonance is really important.Where do you see this business heading? Like what are your goals that you have for the future of this?
Charles Rossano (17:34)
So we’re we’re we already have the two the next two years math down. So we were looking to bring on.a minimum of 250 to 300 more properties online in the next two years. And I use the term minimum strongly. We’re gonna look to branch off into probably another three to four metros as well while we’re doing it. And we’ll continue to build in parallel the private sector component of our co-living as well as continue to engage with additional nonprofits.
Like I said about the nonprofit component, unfortunately, it almost feels like it’s an infinite need. So we’re going to do what we can to continue to help grow and support that. But ultimately, you know, it’s not only about doing the support and the execution, but Michelle, it’s also about the education. It’s about the education. So our goal is to get word out. So it’s not just about what Cohaving Capital can do, but it’s also about
what other operators, what other investors can do to help solve these real world problems as well. So I have I talk to operators all the time and people talk to me and ask me, aren’t you worried about competition or, you know, don’t, don’t give out the secret sauce or whatever it may be. And to me, it’s about there’s such a demand and a need out there. I’m more than happy to kind of open up the doors and help anyone who needs it, who’s going to actually
Move the needle to help solve these challenges.
Michelle Kesil (19:10)
Yeah, definitely. What are some of the main challenges that you foresee?Charles Rossano (19:15)
So some of the challenges that we really foresee, some of them it’s already been enacted where, as I mentioned, a lot of operators within the co-living space, they get challenged around that three to five property mark where they can’t scale past that because of the lack of process and framework around it. So we’re helping to try and educate a little bit around that.From an overall market perspective, some of the challenges could be, in the future, tighter regulations around the number of non-related tenants that live under one roof. Although the tailwinds are actually with us, where states and towns or metro areas are actually opening up regulations, because the need is just prevalent everywhere, and they’re looking for solutions.
what we’re able to provide is that solution. So we’re actually reaching out directly to local governments telling them, here’s what we’re doing, here’s what we’ve done over here, and how we can help in this local area as well. So we’re working hand in hand with them to help solve their challenges as well.
Michelle Kesil (20:30)
Yeah, amazing. That’s really beautiful to work with the local authorities and yeah, make those solutions happen.Charles Rossano (20:37)
Absolutely.absolutely
Michelle Kesil (20:41)
When it comes to growing the business, whether that’s through networking or other modalities, what has made the biggest difference for you?Charles Rossano (20:49)
Great question, Michelle. For us, the biggest…aspect of what’s really moved the needle has been really the co-living community, if you will. So before we acquired our first property, we dove deep in terms of education, in terms of learning how to formulate, but really what the biggest part about it was reaching out to others who had already been doing it for a few years or were familiar.
I will tell you that the great majority of operators or those who are in this strategy asset class, everyone’s willing to help everybody else. And so the ability to learn from others what’s worked, what some of their challenges have been, that’s accelerated our business by years by itself. And so we continue to talk and learn from others. And we share our information as well.
in terms of lessons learned and what we’re seeing. And so the overall community itself, again, it doesn’t come from a position of scarcity or a perspective of scarcity. It comes from abundance. And I think that that really in of itself has just been a tremendous benefit for all of us who are trying to, again, make that impact against this affordable housing challenge.
Michelle Kesil (22:13)
Yeah, I love that. That’s really key in order to continue to make that impact.Charles Rossano (22:19)
Absolutely.Michelle Kesil (22:20)
So before we wrap up here, if someone wants to reach out, connect, learn more about what you’re doing, where can people reach you?Charles Rossano (22:28)
Yeah, I appreciate that, Michelle. So the best way to reach out to me is either look me up on LinkedIn. And so just feel free to connect there. Or you can reach me by email. It’s just Charles @ cohavencapital.com. And whether it’s interested from an investment standpoint, or even you’re in co-living itself, or just want to learn more about the strategy, the asset class.I’m more than happy to have a conversation and give whatever insights I might have on.
Michelle Kesil (22:59)
Perfect. Well, I appreciate your time, your story, and your perspective. Thank you for being here.Charles Rossano (23:05)
Michelle, thank you so much. Appreciate the opportunity.Michelle Kesil (23:08)
Of course. And for the listeners tuning into the show, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Charles who are building real businesses, and we’ll see you on our next episode.
