Do you need to own the property to operate a group home?
**INTRODUCTION**
One day, my husband came home after helping a client mine and declared, "Let's open up our own group home." He was confident that we could do it ourselves and would be able to help many people, especially people in our network from the treatment Center "https://beittshuvah.org/r where we had met each other. One thing about my husband I must share with you is that he is a big risk-taker and has no fears, at least compared to me. This statement started a path that has filled my heart and my passion for ending the homeless crisis in Los Angeles, California.
Fueled by a genuine passion to assist others, starting a group home begins with finding a property to house those needing housing. However, not just any property but finding the "Right" property is key. The three most important things about finding a property for a group home are Location, Location, and Location. (Check out my blog post "Location, Location, Location" for more insights.)
Starting a group home can be incredibly rewarding, but navigating the property market to find the right property can present challenges, particularly in states like California, where housing prices are outrageous. Finding a property, whether you are planning to rent or buy it, is not a feat. It will take time and research if you are not using a property you own.
In 2009, we tried to purchase a property or two in the Long Beach area of California. The real estate bubble had just burst, and everyone offered cash for properties at the listing price or below. We also explored the option of buying a house in foreclosure, and I sent David, my husband, to the courthouse steps where foreclosure sales occur in California. He came home with his tail between his legs as the foreclosure sale was populated with the “bottom feeders.” Investors with tons of cash come with 20 cashier checks in different amounts to buy properties and flip them. It just was not the time for us to purchase a home. Unfortunately, we didn’t have the cash to purchase a property and needed to take out a loan, but cash buyers already acquired all the good properties.
Never give up! We changed our approach, sought funds from a bank, and then demanded money lenders, even with a hard money lender who charges exorbitant interest rates. I put our plan to buy a house out into the community, and one day, I received a call that changed our lives.
Despite our best efforts, we could not purchase a property with all the Foreclosure Sharks buying and flipping the properties. This fueled our determination to explore various avenues, including hard money lenders and realtors, as we searched for a suitable property for a group home. After months of calling everyone and anyone, visiting properties, going to open houses, and searching the internet, I received a call from a hard money lender I had called when we first wanted to purchase a property. This lender told me about a friend who had just remodeled a 4-unit apartment building alongside a single-family house and was looking to rent it to Section 8 tenants or someone interested in starting a halfway house for men exiting the justice system. Ironically, this property had previously been a halfway house but had fallen into disrepair due to gang and drug activity before the new owners revitalized it.
David and I visited the area where this 4-unit apartment building, located near the projects, and saw the apartment building. The property had previously been a drug-infested halfway house, and there was even a covenant recorded on the property that mandated it be used as a halfway house. After touring the property, we were a little too eager to rent it as we hastily signed a residential lease with the landlord. We didn't know then that he had put common area maintenance charges in it. We had agreed to be responsible for the upkeep of the property, as well as the landlord's taxes and insurance. In hindsight, had we paid more attention to what we were signing, we might have negotiated with the landlord over the additional responsibilities under the lease. It was a lot of money to pay for all repairs, maintenance ce and upkeep of the property along with the landlord's property taxes and insurance.
The silver lining was this property would be very profitable even with the additional costs of the lease requirements. The property's location was also fantastic as it was only a block from a shopping center with several fast-food restaurants and a supermarket. Yet it was also in a less-than-pleasant neighborhood across the street from a public housing project. I thought at the time, who would want to live here? Yet we had no problem renting beds at the house and what happened was it is the most requested property of all our locations! This location became the foundation for our shared housing business that has over a one million dollar operating budget.
While it certainly comes with challenges like high rental costs and maintenance responsibilities, it has been a successful path for us. Each situation is unique, and for anyone considering operating a group home, it’s crucial to evaluate your options and seek valuable partnerships while keeping a keen eye on financial implications. If you own a house with enough bedrooms suitable for at least two beds, go for it. If you have money to invest in a property, choose wisely and consider scheduling a one-on-one consultation with us. If you look hard enough, you may even find an owner willing to partner with you if you manage the group home operations and split the profits with them. Leasing a home can be costly when you have to provide the first month's rent, security deposit and, in some cases, the last month's rent.
Each situation varies based on individual circumstances. If you already own a home with enough bedrooms suitable for at least two beds, go for it. If you have money to invest in a property, choose wisely and consider scheduling a one-on-one coaching call with David. Some homeowners may be willing to partner with you if you manage the group home operations and split the profits with them. Leasing a home can be costly if you need to come up with a security deposit plus the first month’s rent.
In conclusion, finding and securing a property for a group home can be challenging. If you do the work and know where to look (why a mentor is helpful in this situation), you will find the right property for your group home. I know a property is waiting for you to convert into a transitional home for the target population you seek to help.
Take time to carefully plan your steps in finding a property and the right one for your business. I faced my fears and overcame the challenges in starting your own business and so can you. I am sharing with you what I use when faced with challenges in business; it's called the three P's: Planning, Perseverance, & Passion. You can do this, and it's a lot easier to do with a mentor or coach!
Schedule a Free Introduction Call with us at https://www.soshousing.org/booking-calendar/15-minute-introductory-consultation?referral=service_list_widget
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