I built a co-working space that pays for itself—here’s how

So where I'm headed to now is a coworking space that I built with my partner Mike. And we built this coworking space during COVID because we wanted to basically have a cool place to office. And part of having a cool place to office is having other cool people around you. So much like a WeWork or something like that, like I decided I wanted to handpick who were gonna be badass folks to office with us. Basically went and found a spot and created this coworking space. And the cool thing about it, and I'm gonna tell you how to do it in this video, is we didn't have to put up much money at all, like actually very little. And we actually get expenses paid for and we get a great office and we get to choose who we office with. So it's just like a huge win and it all has turned out superbly well. And I wanna tell you how to do this because I think you should go do this in your city if you're an established or an emerging business person with a bit of a network and you wanna create a cool like office and working environment for yourself, this is the thing to do. I'll walk through everything on how we did it, tell you how to do it, and then, uh, go from there. Hi, my name is Michael. If you're new here, uh, I do videos, content for people, uh, who are doing what I'm doing, which is being an entrepreneur, owning multiple businesses, uh, doing right by ourselves, our community, and our families. And if you're into that kind of stuff, these videos are hopefully to help you get better and do cool stuff that maybe you haven't thought about. So if you're If you like that kind of stuff, click the follow button. I would love to show you more. And well, in the end, it'll help with my self-esteem if you click follow. So please do it. How I ended up here starts back during the pandemic, which many stories start that way, which is during the pandemic, I, like many of you, was sick and tired of working out of my house. I was also kind of lacking in terms of finding a place to be a good office. I had office kind of downtown San Antonio, and the pandemic hit downtown San Antonio incredibly hard. Wasn't super pleasant during the pandemic. Basically, I said, you know what I need? I need an office that is not my house. I need to get out of my house. I am so sick of this and my family's sick of being around me. And I called my buddy Mike, and Mike is my partner in this coworking space. And I said, hey Mike, like, do you want to work together to go find an office space and we'll share it and we'll create a little coworking space there? And would you be interested in doing that? And he said, yeah, let's do it. We'll partner on it together. And we went from there. So our initial idea in putting together the coworking space was, well, we'll use it to fund a real estate investment. We'll go and we'll buy a property, and ideally it will have some office space in it, and be able to kind of rent out some of the other offices and rent ourselves offices as well, right? Potentially build up equity in owning the property. And so we called some real estate brokers and we said, let's go look at stuff. It turns out, I don't know if you've noticed this, real estate, really expensive. And we kept running into situations where people would say, hey, we're not interested in selling, but we will potentially lease to you. And, uh, when we did the numbers on what it would cost to basically lease something, it was like stupid cheap, like so much better deal compared to buying something. Well, the reason for this is, like the building we ended up in here, which is the building we eventually set up in, uh, for our coworking space, is a lot of these folks have bought these properties 30, 40, 50 years ago. So their cost basis is super low. So there's no place they could go take that money if they were to sell the property and reinvest it someplace else. So ultimately, like, we kind of backed into because, well, the real estate market is so hot that really our only option was to, well, lease some offices. So we pivoted from trying to buy and went straight towards trying to lease. Mike and I are— well, I'm 50 this year. Mike's a little older than me, pretty established in business. We've been in San Antonio each for a while. So we started making phone calls and asking around, hey, do you know, you know, of a property that would be good for what we're trying to do? We're looking for 3,000, 4,000, 5,000 square feet with some offices, and we're gonna rent 'em out. And, you know, we'll rent the space and then we'll rent out some other spaces to, you know, the other folks, like basically build a coworking space. So since we're established, we, you know, started to reach out to everybody. We started a network and say, hey, do you have an office space that you would be willing to rent? Or do you know somebody that would have one? And it turned out like, there was a lot of offices for rent. 'Cause here fundamentally is a problem. There are not that many large office tenants anymore. The days of people coming in and leasing entire floors like the one we leased here, like it's pretty rare. A lot of law offices, for example, that used to occupy spaces like this, they've gone down to everybody working from home. And that's just the nature of things. And some of that's changing with return to office. But at the time, and I still think it's the case, it's pretty easy to get a space like this. People are desperate to basically rent office space to folks like you and me. So, you know, Mike and I started to put out the whole kind of call into our network to see, hey, do you know something? We're looking for 3,000 to 5,000 square feet. And it turned out we got a lot of spaces we could go tour. And it turned out a friend of ours who offices actually downstairs from where we are here in this building knew of this space becoming available. So he connected us with the landlord. We came over, we did a tour, we said, Okay, make us a proposal of what it would take to rent this. And then basically Mike and I did some fundamental math to understand, okay, if we rent out the offices to ourselves at X rate and we rent out the rest of the offices to other people at Y rate, and then we factor in some buffer for risk, right? Because that's part of the deal here. Like, we— Mike and I signed the lease to lease this office, and then we hope we fill the offices because there's a problem here in this whole scheme, which is if you sign the lease, you're on the hook. You have to make sure that you find enough other tenants to cover your expenses on the rest. So that's the risk in this whole scheme. When you go do what we did, which was rent this space and then sublease out the other offices to other people, you run the risk that, well, you could end up upside down and losing money every month. Fortunately, we've never had that problem. We've had almost 100% full the whole time, which has turned out great by charging, well, basically just market rent and going from there. So Mike and I started at that point. Once we understood what this office was going to cost, we went to go validate the other side of stuff, which was, can we find anybody that wants to take these offices? So we started to reach out to everybody that we had talked to over the past couple of years who had expressed an interest in being in a coworking space like this. And the pitch was pretty straightforward. Hey, we're building a coworking space for badasses. It'll be people that are entrepreneurs, family office folks, different types of folks that do all kinds of cool business stuff. You'll be in a community of cool people. We'll schedule monthly lunches. You can get to know people in the hallway and you can have your own office with a door that'll close. And here's the rate. And so the pitch was you would be part of that and you'd pay a good market rate. And we went and tried to go see if a few people would sign up. And only once we knew that we had 2 or 3 people out of the 5 offices that were available who would want to take these excess offices and pay for what we were going to do and de-risk it a bit, then we went and signed the lease with the landlord. And yeah, it's been off to the races since then. And I'll give a tour of this whole space. Ultimately, like what has made this work is we've made this place super awesome. If people ask for a particular amenity, like they want to get a cool TV or we want to get a specific type of drink or snack or whatever, we order it. And we provide those drinks and snacks as part of the tenancy here. Like you get drinks for free and you get a monthly lunch for free. If people ask for a specific thing or get it fixed, like, we make sure this place is top-notch. It's like ready to go. And so it is a high-end— I would say not luxury, but I would say pretty awesome space. And that's not just inside the building here, which, you know, we have all kinds of stuff from the snacks to the private bathroom to the offices that I think do a really good job, to outside as well, where we have the little tiny train that goes by. We're next to a big park here called Breckenridge Park in San Antonio. We're centrally located. It's nice and quiet. It's just a good space to be. There's lots of greenery around and really a positive type of environment. So, you know, we placed ourselves, I think, at a premium end of the market where customers who want something really nice can get excited about it and they're willing to pay a fair price for it. We're not the cheapest office option. And that's what's actually happened since we opened this up. A lot of small coworking spaces like this have opened up. Every office owner who suddenly had vacancy post-COVID has started to open coworking spaces inside their building. So we have competition. But we've managed by kind of staying at this awesome end of the market with good amenities and good co-tenants and good community. We've managed to stay full, which has been terrific. So we're coming up— we just renewed the lease for an extra 2 years. We're going to be coming up on ending the whole thing, the whole experiment, after 4 or 5 years here shortly. So I'm not sure what I'm going to do next, but by and large it's been amazing. And I recommend this for anybody because it becomes just an amazing networking tool. The people we have that come for lunch are awesome because people invite guests to come in and hang out with us. The people that we have that office here are super cool. I learn a lot from them. When there's smart people that you run into in the hallway or in and out of the office, or you say, "Hi, how was your weekend?" Like, it's just great. You learn from those people. And lastly, I've seen people here do business deals, like become business partners with folks because they meet them here in the office. And it's just kind of the idea of, you know, the quality of your network is who you spend time with. And, uh, This enables these folks to spend time with some really high-quality folks, and it all works. So people are happy, I'm happy, you know, and we haven't lost money on it, which makes me even happier. So, you know, money-wise, there's risk here. Like, you can get upside down if you have vacancy. You still owe the rent every month whether you sublease out one of these offices or not. On the upside, hopefully, you know, you have enough left over, which we do, to cover things like having cool amenities and improvements to the space and great conference tables and TVs and great snacks and all that kind of stuff. And you can do all that for, you know, hopefully by charging a market rate both to yourself, which we charge ourselves rent, but then we do it to other folks who are here. Fair price for, I think, what is a great value. So it all works out. Haven't lost money yet, which I'm pretty excited about, and my network has grown by leaps and bounds. It's totally worth the hassle. And if you have an opportunity, do it. And the coolest thing is, notice I didn't talk about writing a big check in any of this. Basically, we have any money that we fronted up front to kind of build things here in the office— conference tables, chairs, TVs, all that kind of stuff, snacks. Like, revenue from the tenants has helped cover all that, and we've gotten paid back the investment that we made to start the place. So pretty cool. And the last thing I'll leave you with— we named the place the Rainwater, uh, and it's named after a guy named Richard Rainwater, who is the inspiration for this whole thing. He had a famous co-working space up in Fort Worth, uh, amongst a bunch of just kind of ballers back in the '80s, and we named it after him. So that was my idea, and we did it. All right, cool. Well, thanks for being here. Uh, hope you build your own coworking space. Here's how we did it, and, uh, hopefully you can do it too. See you. Bye.