Responding to Allegations Against my Startup, HouseHack.

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. Anyway, thanks for

watching. We'll see you in the next one.

Goodbye and good luck. Why not advertise

these things that you told us here? I

feel like nobody else knows about this.

We'll we'll try a little advertising and

see how it goes. Congratulations, man.

You have done so much. People love you.

People look up to you. Kevin Praath

there, financial analyst and YouTuber.

Meet Kevin. Always great to get your

take.