$90K/Year With Just ONE Creative Real Estate Investment

TL;DR

Devana and Reid create profitable sober living homes with a community focus.

Transcript

this is real estate rookie episode 265. I also reached out to the sober living Coalition in our our area and we started going to their meetings and they gave out like a kind of a packet I guess of some sorts that had and some intake papers and then Reed and I really sat down and and thought about what what what our why was how we wanted people to f... Read More

Key Insights

• Devana and Reid transformed their personal experiences with addiction into a successful real estate investment by creating sober living homes, offering a unique niche in the market.
• Their sober living facilities provide structured environments with accountability, helping residents maintain sobriety while generating significant passive income.
• They emphasize the importance of creating a supportive, clean, and well-maintained environment, which reduces tenant turnover and increases satisfaction.
• The couple manages three sober living homes with a total of 47 beds, achieving a 48% cash-on-cash return despite initial high investment costs.
• Devana and Reid highlight the importance of screening tenants carefully to ensure they genuinely want to be in recovery, which contributes to their low turnover rates.
• They provide housing at affordable rates, ensuring residents can sustain themselves even with entry-level jobs, fostering independence and respect.
• The duo advises potential investors to have a genuine passion for helping others, as this balance between profit and purpose is crucial for success in this niche.
• Location is key for their properties, with considerations for proximity to public transport, job opportunities, and recovery networks being essential for their business model.

Questions & Answers

Q: What inspired Devana and Reid to start sober living facilities?

Devana was inspired by her personal experiences with addiction in her family and the loss of a close person to a heroin overdose. She wanted to transform her anger into something positive by helping others in recovery, which led to the idea of starting sober living homes. Reid supported this vision, bringing his construction expertise to create quality living spaces.

Q: How do Devana and Reid manage their sober living facilities?

They employ live-in managers who handle daily operations, including rent collection, monitoring chores, and conducting drug and alcohol testing. These managers are often residents who have proven themselves responsible. Devana still handles tenant screening to ensure the right fit for their homes, maintaining a low turnover rate and high resident satisfaction.

Q: What are the financial benefits of investing in sober living facilities?

Devana and Reid achieve a 48% cash-on-cash return on their investment, with a net monthly profit of $7,580 from one of their homes. Despite initial high costs, the long-term financial benefits are substantial, as they have low turnover rates and consistent demand, resulting in stable income.

Q: What challenges did Devana and Reid face when starting their business?

Initially, they faced challenges in understanding the operations of sober living facilities and in dealing with unpermitted structures on their property, which required unexpected construction costs. They had to develop their processes and procedures over time, learning from experience to streamline operations and maintain high standards.

Q: How do they ensure a supportive environment for residents?

Devana and Reid focus on creating a clean, well-maintained, and supportive environment by investing in quality furnishings and decor, conducting regular inspections, and encouraging a sense of community among residents. They also provide amenities like cable TV and air conditioning, making their homes desirable places to live.

Q: Why is location important for their sober living homes?

Location is crucial as it needs to be near public transport, job opportunities, and recovery networks. This ensures residents can easily access meetings, work, and other necessary resources, contributing to their recovery and independence. They also consider neighborhood dynamics to maintain good relations with neighbors and avoid conflicts.

Q: What advice do they give to those interested in starting similar facilities?

Devana and Reid advise potential investors to ensure they have a genuine passion for helping others, as this balance between making money and providing support is essential for success. They also recommend starting with one location to develop effective processes and avoid being overwhelmed by the challenges of managing multiple properties.

Q: What role does tenant screening play in their business model?

Tenant screening is crucial for maintaining a low turnover rate and ensuring a supportive community. Devana asks specific questions to assess whether potential residents genuinely want to be in recovery. This careful selection process helps avoid issues and ensures that all residents are committed to maintaining sobriety, contributing to a stable and harmonious living environment.

Summary & Key Takeaways

• Devana and Reid turned their personal experiences with addiction into a profitable real estate venture by creating sober living homes. These homes provide a structured, supportive environment for individuals in recovery, ensuring a low turnover rate and high tenant satisfaction.

• Their business model focuses on offering a quality living space with amenities and support, which not only helps residents maintain sobriety but also generates significant passive income. They emphasize the importance of genuine care for tenants to achieve success.

• The couple operates three homes with 47 beds, achieving a 48% cash-on-cash return. They stress the importance of careful tenant screening and choosing the right location for their properties, ensuring proximity to transport, jobs, and recovery networks.