PadSplit, a housing model that formalizes workforce co-living in single-family homes, has secured $20.5 million in Series B financing, according to a press release sent to Inman.
The funds will be put toward general growth plans into more domestic markets. The Atlanta-based company currently operates homes in Atlanta, Houston, Richmond, Tampa, Indianapolis, New Orleans and San Antonio.
Workforce housing is defined by the Urban Land Institute as “housing that is affordable to households earning 60 to 120 percent of the area median income.” (Regional definitions of median incomes vary.)
Other common characteristics of workforce housing include close proximity to work centers and public transit.
PadSplit — founded by Atticus LeBlanc, a career real estate investor, apartment developer and self-described advocate for affordable housing — focuses on community workers who serve schools, restaurants, hospitals, grocery stores, hotels and government offices.
PadSplit properties do not ask for a minimum credit score or security deposits, as it underwrites any tenants earning $15,000/year; and, they allow for short-term occupancy, even as short as a week.
Residents of PadSplits have private, furnished bedrooms and shared common areas, as one would expect in a typical roommate situation. Utilities and WiFi are included in the price. All rooms need to at minimum meet HUD occupancy stanards.
The company also deploys an operations backend to coordinate custom rent payment schedules for each occupant while serving as a conduit for landlord and tenant needs and services.
“To date, PadSplit has created more than 2,500 shared housing units and housed more than 5,000 individuals, with rooms available at 40-50 percent of the average cost of a one-bedroom apartment in its markets,” the release stated.
The company will also dedicate funds to launching an private investor-eccentric initiative designed to empower private property owners to “host” opportunities for co-living. The program will offer management and marketing services, as well as tenant matching, vendor coordination, leasing agreements and payment facilitation.
According to PadSplit, measurable benefits of its approach include 88 percent of residents having improved credit scores, saving an average of $420 per month across all housing and transportation costs and the ability to better save for cars and their own apartments and in some cases, down payments on homes.
Credit maintenance and repair services, job matching and telehealth services are also made accessible to PadSplit tenants.
The company is aiming to have 3,500 units under management by the end of 2021.
Notable contributors to the company’s latest financing include Core Innovation Capital, Impact Engine, Citi, Mark Cuban Companies and Cox Enterprises.