저자: KevinPafrath · 외국인
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Kevin이 House Hack에 대한 사기 의혹에 반박하는 영상. 운영비 42% 절감, 매출총이익률 56%→63%, 부동산 $50M 매입 후 $60M+ 평가, 5% 전환사채 발행 설명. 의혹 항목(투자 사실, ETF 종료, 자산 매각, LLC 명칭, 임대료, 이사 보수 등)에 대해 해명하며, 2024년 8월 가치평가 기준 $99~140M로 본인이 제시. 비상장 회사 관련 발언으로 상장 자산 가격 예측은 없음.
다듬은 글
Hey everyone, me Kevin here. In case you haven't heard, I run a real estate startup and it is a great growing company that I expect will be here for the next 50 plus years and I'm really excited about it. But we've had some haters make some fraudulent allegations against House Hack. And what I'd like to do is just clear the air by giving you my perspective.
And ultimately, there are always going to be some people who, no matter what I say, aren't going to believe it. And then there are a lot of people who will listen and see what it's like being on the entrepreneurial journey. That is, you're always going to have haters, you'll have supporters, and you'll have people in the middle who are sort of watching.
And that's okay. That's the whole point of America is you get to build businesses and talk about successes, failures, mistakes, wins, and share the journey with everyone. And that's why I love YouTube and that's why I started on YouTube sharing everything as transparently as I could. And in that or sort of in that vein, if you will, that's exactly why we decided to do our first quarter earnings call on Sunday, which is really cool because not only did we decrease our operating expenses by 42% on an annualized basis, which is really impressive.
And our gross margin increased substantially from 56% to 63%. which is great for a startup. Like we're just getting started on our margins and our profitability obviously in my opinion. We're building out ADUs. We're expanding our business. We're developing lots. We're trying to turn House Hack from a little real estate company where we started this company with an idea in 2022.
Hey, invest and we'll figure it out. And we turned it into a business that raised $45 million and then another now $13 million. We bought $50 million worth of real estate and renovated it. That's worth over $60 million now, which means we're up $10 million on the investments that we made. And we're not even done with our ADU projects or our developments, which we think not only will increase our cash flow, but increase the value of our entire portfolio.
And we also bought in areas where prices have been going up through Q1 rather than down like we've seen in some parts of Florida or Texas. We did that because we conducted our research in Florida and Texas and we knew the timing wasn't right for those areas and we did that transparently on the channel.
So, we've done really incredible things at the company, but that hasn't stopped some people from picking up on some small details of the company which I think it's just easiest to address headon. So that way whether you're looking to join sort of just hey what's it like being an entrepreneur in the public space or you're just trying to get a little bit more color on your investment because you've already invested or maybe you're thinking about investing because after all we do have a 5% convertible bond right now.
Well maybe it's worth looking at the details of this video to see what you think about it. Now quick reminder the way that works is with a 5% convertible you know sometimes I see these comments where people are like oh you only make 5%. I'd rather invest in something else. No, this is actually a venture capital investment.
So, you're investing into House Hack with the hope that House Hack could be worth more in the future. Obviously, there's never a guarantee. In the meantime, we're paying you 5%. Until your stock converts if it's worth more than it is today, or at least was in August of 2024 when we had our last valuation done, which we'll talk about that in just a moment.
We actually think that's pretty incredible. Most venture capital companies you invest in, they don't give you earnings updates. They don't give you quarterly earnings calls. They're not transparent on YouTube. They're not providing you a yield. They're not providing you that diversification or backed by real estate aspect.
They're not providing you these things. But that's okay. I'm not saying that those are bad investments. I'm just saying what we're creating is something different. And we think we're doing this in a transparent way to provide value for our supporters and even those who want to watch the journey. Unfortunately, you're always going to have some people that take that transparency for granted and then they abuse it and they come up with lies, fraudulent lies.
Fraudulent lies, by the way, that the company, House Act, could sue for and we have in-house legal staff. So, it's like it would not be a big deal at all. But here's the thing. Is it really worth our attention and efforts to go through the legal system for years? No, it's not. Because in the long term, all this sort of like hate and critical commentary, which we'll address head-on in just a moment, will just be noise.
The true supporters of House Hack know that if this is the worst haters come up with, it's actually kind of sad. And it actually proves and doubles down on how much of a quality company we actually are. So, it's really exciting to me. Now, what's fascinating is some of the people that I see that sort of make hate content, uh, they've either just lost their job, they've gone through a divorce, they're broke.
They're people who are miserable or down on their luck. And the easiest way to try to hitch their wagon onto someone on on social media is to find another YouTuber and bag on them and make insinuations that are either wrong, fraudulent, or just outright lies. And again, we'll address those in just a moment.
Now, the sad thing about that is YouTube rewards that sort of content because it's juicy and then you get sort of like the allegation comments are like, "This is a scam." So, that sort of engagement actually promotes that sort of content. But here's the reality. If somebody made a YouTube video on the CEO of, let's say, Invitation Homes and his $3.5 million golden parachute, nobody would watch it because the person's not a YouTuber.
Nobody knows the person's name. So what we've tried to do and what we've done to do the opposite is we've actually gone to a higher standard of transparency. Again, quarterly earning call, earnings calls, but also PCAOB audits. These are the highest levels of audits that you could get in America. The people commenting on our business probably don't even know what a PCAOB audit is.
It's an IPO standard for public companies. The scrutiny on our books is the most it could possibly be. And what you find when professionals, PCAOB auditing professionals who are putting their entire company's reputation on the line for our books are telling us, "Wow, you guys are transparent. You do great work with contracts.
You do great job with your documentation for receipts and your books." Means we're doing something right. Anyway, let's go ahead and analyze some of the commentary. So, uh the first thing we already talked about, we're an EVA profitable business. Uh even if you throw in our interest expense, I think right now we're about -37 per quarter, which for a company with 70 million assets is pretty dang low.
And again, this is convertible debt. So, we have no debt bank debt. So in the future when hopefully our convertible bonds convert into stock because the company is worth more uh we don't even have any interest expense at that point and we'll be massively profitable on a cash flow basis remarkable but anyway to me again this is my Birkshire Hathaway that that's my hope that's my vision but just remember there's you know I'm the CEO of the business so obviously there's going to be upside bias in what I say uh and so you know take everything with a grain of salt uh and uh you know make your own determination.
to see if something like investing in a nonacredited round or the accredited round for you know 5% paid you on a monthly basis plus upside in the stock and you have a debt position which basically means you have downside protection against other equity holders you're in a pretty good spot backed by real estate right in order for the business to go bankrupt you really have to see all of the real estate collapse in value of course maybe a nuclear bomb hits and that happens there's risk with everything so anything could happen But for me, I see this as relatively low risk.
But again, I'm biased. But let's get into some of the allegations. So number one, you never invested into House Hack. Okay, this is wrong. It's a factual lie. House hack could literally sue over it and the person would lose miserably. They would be pretty smart to go unlist and delete their videos, but honestly, at this point, they could just keep them up because we got them downloaded.
And um let's just say again, we don't really care because the person's a fraud. But then again, uh you know, they make content uh and and they get paid for making hate content. And that's fine. Let's be clear. Not only did I invest over $5 million into House Hack, just in this bond round, for example, over $5 million of my own net worth was invested into House Hack in cash.
No debt, nothing. just cash right into house hack. So I'm actually investing in this higher bond valuation round at a buck 40 per share just like everybody else is who's investing right now. The people who just invested approximately about $13 million into this round. I'm in at the same round and the same valuation because I believe in the upside.
So this idea that Kevin never invested, it's just a lie. It's wrong and it's not true. And it's also worth mentioning that I've never taken a commission dollar from one of our sales at House Hack. I've provided my license for free to the business when we were first operating. Now I ended up licensing House Hack as the real estate brokerage.
So it has its own MLS accesses. I paid for salaries to develop our employees before House Hack was operating. I paid for 100% of our flights to find our properties in 23 24 and every single flight that we've had in 2025 so far I have personally paid for outside of house hack the most investors can say is oh yeah or like the most like these these haters can say is oh sure you did Kevin all right well I'm going on record saying it and we're subject to audit and the haters aren't so it's fine true investors and fans know that I'm all in on this company mentally, physically, energy-wise.
I've put a lot of credibility and money into this business, and I'm not going to stop just because somebody makes a hate video. I don't really care. In fact, we've got some wonderful things coming to the uh Meet Kevin YouTube channel over the next few weeks. So, I'm excited for you to be part of that.
Just stay tuned for 9:00 a.m. every day uh for the next uh for the next uh at least uh you know, hundred-ish days. Stay tuned. It's going to be fun. But uh this is just a blatant lie. I'm investing in the same round with over $5 million right here. Number two, uh an allegation that comes up is your PP ETF was delisted and people say that to imply that somehow my project was shut down.
This is actually incorrect. So I chose to close the ETF and advisory business to focus on house hack. See, my ETF returned over 24% to investors in under two and a half years with hedging for a market downturn. See, a lot of people look at just the tail end and go, "Oh, well, you know, the S&P outperformed at the tail end a little bit." The S&P didn't include any downside hedges.
But people don't value that. And I was very transparent over that. We had over $30 million in a hedged ETF return over 24% for investors in two and a half years. and we outperformed the S&P 500 for 70% of the time it existed. I chose to close the ETF at the top of the market and return cash to shareholders before the March and April market decline, which means people would have gotten their cash.
It's not like a memecoin that rugpulled. No, people don't, you know, people should be making videos on the memecoin rugpoles that are going on, but instead, oh, oh my gosh, you closed a fund with over $30 million in it and he didn't rug pull. You gave everything back. Like, yeah, that's the right way to do it.
I tried and we did a great job. Were we perfect? Of course not. This is also the first time we've ever done it and we're so grateful for the opportunity we had. But guess what? We closed it to focus on house hack. Any other insinuation is just a blatant lie. But that's okay. As they say, haters are going to hate.
Then people say, "Oh, but Kevin, you say you're going to launch a new ETF, the Meet Kevin Successor Trust Public Documents." The ME Kevin Successor Trust was launched last year because we were going to move PP from the title investment trust to our own investment trust because of the frustrations that we had with the title financial group.
Now, I don't want to go into the frustrations and the limits of operating with another company involved, but what we decided is in order to go from the title trust to the Meet Kevin trust, we'd have to spend about $150,000 and hold a proxy vote to make that happen. So, we'd have to get the majority of shareholders in the PPEF to vote to move from title to meet Kevin.
It would probably take a six-month process. And what we decided is it's not worth the stress to do that. Let's focus on house hack instead. And so both of these are closed. There's no new ETF. That's done. Number three, people say, "Oh, but Kevin, you sold one of your properties to Houseack." Yeah, we did.
In fact, I remember when our board independently of me was going through this and saying, "Kevin would be dumb to sell this property to us for this price because it's worth more than that." In fact, I remember Ross Gerber on our board saying, "Kevin, I I thought you were a capitalist. Why are you selling this for like $200 or $300 $1,000 less than it's worth?" It's because this is my legacy.
I want to give Houseack every single edge possible. We had three independent appraisals on that property, licensed appraisers, independent, and the board decided the value of the property without me involved. One of the appraisals actually put zero value on our ADU plans which we've already broken ground on for that property and that average valuation or that valuation was lower than the other two.
So we had two local appraisers, one outside like 4hour away appraisal. I still wonder why they chose to pick that appraisal but whatever. They didn't value the ADUs. They don't understand the market here which is fine. That's okay. If you average those three appraisals together, we sold the property for less than the average of those three appraisals.
And if you take out the one that didn't value the ADUs, and you look at the other two, we sold the property again for a two to three, maybe even $350,000 discount, depending on which appraisal you're looking at. And again, why? Because I'm all in on house hack. I don't care about a quick buck here or there.
I care about the long-term success of this business. Now, in my opinion, this building is going to be an 8-unit building that's likely worth somewhere around $3.5 million once it's done. It was bought as a 4-unit building. We had permits ready to go for two and then we expanded to two more units. So, we'll be at eight units when it's all said and done.
We've already broken ground. Now, some people are making fun of the naming of the LLC that I carried all my real estate in uh to sell the property to House. And I think this is interesting because the only people who make fun of this are people who don't know that in my courses I teach you should always use funny names for your LLC.
And not only is it an anonymity tool, but it is also a tool that I mean, think about it. You know, what's more attractive to an attorney looking for uh juice, as they say? You know, the millionaire LLC or the really toxic LLC. All right? So, I always look for clownish names for my LLC's and it's something I've done for a very long time and it's actually what I advise in my courses.
In fact, I say if you have a family trust, you should look up Well, you I don't I don't publicize what my family trust name is, but let's just say it's not the Kevin Pafrath family trust. I always recommend people use something like the Mickey Mouse trust. Or if you look up uh N69er for Papa uh my plane that I own uh that House Hack does not pay a dime for.
If you look this vehicle up, you could actually see the LLC naming of it is not my Tesla LLC. Again, I'm always looking for something somewhat entertaining and it's TSLA, like Tesla stock. Number four, uh we've already covered this. I've never taken a commission dollar from House Hack that hasn't been given to House Hack.
Uh number five, uh people talk about 2024 and uh some of the bonus incentive structure that we had in 2024. So, there were a couple things that happened in 2024. First of all, we reduced our staff from like 13 to four full-time and just contract. We really found that we could be much more profitable by contracting out a lot of our work.
Like in-house contractors, bad idea, don't do it. Contracting contractors, great idea. And so we reduced our staff substantially. And not only did that expand our operating uh, you know, margins, but it also expanded our gross profit margin substantially. Uh and so as a result of sort of like the shifted responsibilities and what we went through in 2024, yeah, not only were there stock comp bonuses, but there were also uh we now have four salaries sitting at about 250k each.
And we think people who work really hard for this business and are all in on it deserve to be highly compensated because they do a great job. We have in-house property management, in-house investor relations, in-house bookkeeping to some extent. Uh we also contract with outside professional CPA firms.
So they sign off on our financials. Like for example, our Q1 earnings call signed off by a CPA. These are not financials that we put together. A CPA signed off on them and that's of course following our PCAOB audit. So we do everything to the highest of standards possible. Uh and so uh as part of this 2024 that did include some of the original founding shares uh that were created when House hack was created.
We created about a million voting shares for the company. Uh and I never received a dollar from House Hack. Like some people were like, "Oh, Kevin, House Hack lent you money and then forgave it." No, these were like about a million founding shares. Those are the voting shares for the company because remember I hold the voting shares for the company much like Mark Zuckerberg holds the majority of the voting shares for Meta.
I think it's one of the reasons Facebook has done so well uh is because Mark Zuckerberg has had those voting shares. But anyway, you get that founder vision, right? Anyway, uh the the value of those founding shares, yeah, as we founded the company, those were given to me. So, I have those founding shares, but they don't have any yield.
those founding shares, they don't pay anything, but from an accounting point of view, they look like foregiven debt because they're shares given to me, but I never got a dollar for those. Uh, so it's worth clarifying that. And there are allegations. Oh, but Kevin's collecting rent for Houseach's office.
It's true. Houseach does rent a building from my company. Uh, that is about a $6,000 lease. Probably about 4,000 in value of that is the building. Maybe about $1,500 of that are utilities. Uh, and then measly leftover over $500 go towards actual like infrastructure in the property, whether it's security or the $30,000 gym that's in there or whatever.
These are sort of employee benefits and perks that exist at the property. House hack pays a monthly basis, you know, on a monthly basis for this. For what it is, I actually think it's cheap. And I would argue uh my company is actually taking the loss on that because of how much we spend at that property uh on on making it a great facility.
So it's a great facility for house hack. It's once again a a deal for house hack, but again a hater is always going to spin it as it's a grift. I mean they're the ones who got fired from their job and their spouse divorced them and they have to lie to make YouTube content. We're the ones that are PCAOB audited that have raised over $58 million from investors and we're doing exactly what we say we're doing.
So, you kind of have to value where where the commentary is coming from. Uh then people talk about what about like mini funds or equity hack. Look, all these things are not presently core ideas or plans. These are simply outside ideas that maybe in the future could make sense. Today, all we're focused on is how can we grow our ADU and developments to increase our rent and cash flow for the business.
If there's a better opportunity to strategically sell real estate in the future or to do equity loans or whatever through some form of app or fintech or whatever, great. We'll decide that at that time and we'll do what is in the best interest of the company at the time to limit risk for the company and maximize profitability for the company.
But today, we're not promising any of those will happen. We have ideas just like any company has visions for how they can become even more profitable in the future. Then there's some complaint about Ross Gerber earning $5,000 a month. You know, for a board member that has over $3 billion in assets under management and as a financial adviser, reviews our books and reviews our the strategic direction of our business is an independent adviser to the company.
We actually think we're getting a wedge deal on him. We actually think we are underpaying Ross Gerber. Uh so that's our opinion and he really provides a great balance uh to our board as well. Uh and this is very important. So, that's an overview of all of the hate and allegations. And honestly, when you kind of look at that in the grand scheme of things, none of that is that bad.
Like, really exposed for the name of an LLC. Oh, it's kind of sad and it's kind of laughable. But in the meantime, if you want to invest with me on this journey, go check us out, househack.com. You get 5% paid to you on a monthly basis. On top of that, you're diversifying away from the stock market.
You're diversifying away from, I would argue, almost all tariff risk. You're diversifying away into discounted fixer uppers. And we do all the property management in-house. I touch the properties and you're, in my opinion, getting a great deal for this company. Some people say, "Oh, but Kevin, you know, what about the valuation?" Look, we had a valuation in August of 2024 at 1.4 to two times book.
If you take that today, assuming our bonds convert, which we expect that they will, assuming our bonds convert to shares, that would leave us with no debt, no liabilities other than a few miscellaneous payables. Based on the real estate we have today and based on the cash that we have today, we would be worth somewhere between 99 to about $140 million as a company.
That's based on the 1 to4 to $2 book valuation we got in August when we were losing money. I believe that valuation is antiquated and dated and low and I believe our because of that our bonds are going to convert and so the valuation of our company is probably significantly greater than this. But keep this in mind I'm the CEO of the company.
I could be wrong. That's my opinion. There's risk with every investment and it's really important to evaluate that for yourself. We're open to nonacredited investors. If you want to invest $20,000, uh that's currently our minimum and you want to get your 5% yield and see what it feels like to get our yield payments and then see how our earnings evolve over the next few months, you can do that as well.
And if you ever have any questions, feel free to reach out to us at househack.com. What's remarkable is I have not seen a single email from an actual investor concerned about any of these hater allegations, which is a sign to me that people who actually study what we're doing see the good in what we're doing.
And the only people that are the loudest are the ones who refuse to let facts and data convince them. .
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