BiggerPockets

Renee

Quite a challenge. Best of luck.

Check with your city, county and state representatives. If you can find a local economic development organization, they could probably help, too.

You'll likely find multiple government sponsored programs to help fund such endeavors, for both startup costs and the acquisition. Also, starting something like this, you might find there are state and federal tax breaks later on.

Why not rent your space?

You need to find an angel investor. Someone you can meet and get to know personally, and who believes in your business. And who can fund your startup and down payment costs. I'm sure this is possible because my wife works in a very similar situation where a guy with a vision much like yours started with help from an angle investor.

I don't think you're going to find that person here. You need to find someone in your area who sees the same future you do, and who has the money to get you there.

Take a add out in your local paper and see what that would get you. Go to some local churches and speak with the pastors and see if they would not mind you coming in to speak about the GREAT OPPORTUNITY. also, I would go to some of the facilities like the one you are trying to open and speak with the people inside and see how they got where they are.

Great idea, but you have to be the one that spearheads it.

SUCCESS BREEDS SUCCESS

To answer your questions, when I started this I did want it in Berryville but received opposition from the community. So, I decided to move my project to Eureka Springs. Eureka Springs is more "diversified" in every since of the word. They even passed a law legalizing marijuana in the city limits or something to that effect. The building I want is zoned C-2. I have a letter from the city secretary stating that it is zoned for what I want to do. The city is in a down turn as far as their tourism goes and the facility I want to put in will help with some of the economic stress the city has been feeling lately. The parents will have to come visit their children (or at least the ones that are able) and they will have to stay in motels and they will have to eat. Granted it will be mainly on the weekends but it will help. I did have another hotel picked to rent. But the rent was higher than the payments will be on this building and it is not the size nor does it have the ammenities this building provides. As far as location, We are surrounded by more populous cities. Northwest Arkansas was (I havent checked lately but as of a couple of years ago) the fastest growing area in America next to Las Vegas. At this time I do appraisals in five counties so I know for sure we can accomodate those five counties and then some considering there are no other facilities in the state quite like the one I am wanting to open. I do have an Executive Director chosen but like she told me, I am basically doing her job to begin with. I have contacts with the Department of Youth Services, the Arkansas Drug and Alcohol Prevention and with Medicaid. I do however need a Mental Therapist because Medicaid does not pay for just Residential Treatment although they did pass a bill recently where Medicaid will pay but it will be a year away. Why bills take an entire year to take effect is beyond me. I have a Governing Board and I am already getting people who work for the local hospitals and doctors offices such as insurance claims and nurses wanting to work for me. There is a man who has had a foundation for abused children for about twenty years that I am meeting with this month to discuss grants, etc. He is a very nice man and is very knowledgable and helpful. My long term goals from here are to start another facility in south Arkansas, near Little Rock and eventually in Oklahoma and Missouri and Texas since we are in the corner near the state lines. There is a facility for adults in Springdale and in Bentonville and one in Heber Springs that have been giving me advice and have taught me all the licensure information I have needed. I have a policy and proceedures manual and all the forms needed for clients and employees. What I originally wanted to do was start with 20 kids because you have to have one counselor for every 20 kids but for some reason this has grown into something larger due to the involvement of the Department of Youth Services and the need for such a facility. In counseling they teach you to answer to your "higher power" and for some reason lately my Higher Power seems to be pointing me into the direction of bigger is better. There are other facilities for juveniles near hear but they are all very very expensive and take a small amount of kids. I guess I am taking my stance from Sam Walton- charge less but have more. I talked to the Juvenile Probation Officer in Berryville today. Just in our small rural county (population less than 10,000) there are 90 kids in the system. I think that is so sad. She said there are more everyday in need of treatment. When I talked to probation officers before within five counties there were over 200 kids. And those were also small rural counties. One of the men at the Department of Youth Services told me that I was the only one who was crazy enough to take this kind of project on and that basically I was the only voice these kids have as of right now. He even asked me to be a lobbyist. But lobbyists are not very popular right now and I told him that I wanted to learn everything there is to know about the business before I even think about being a lobbyist. Once I get this open it will be the largest facility of its kind. If I am at full capacity which is 160 kids for now and they stay for six months to a year in 10 years that is 1600 to 3200 kids I have helped. I know that to everyone the bottom dollar is important (and FYI the rehabilitation business is the most successful business in the United States) but the 160 to 320 a year is what keeps me motivated. Once I have helped my first 160 kids then I feel I will have success.

Angels are partners. You don't want partners.

Banks want 20%. You don't have 20%.

And a loan for the down payment would leave you over-leveraged. Do you have capital for the expenses you will incur early on? Do you have capital to at least pay interest for the first year?

I would have to think that you need a silent partner to get it done. You want a loan for the down payment amount, but what about the risks? Do you expect to be so profitable so soon that you can pay back all of this leverage you're trying to amass?

Practicality is necessary for success. You have used a lot of emotion to describe your mission, and that's awesome. You even called your B-plan 'awesome', but all an investor cares about is that bottom line, and I haven't read too much about that, even though you wrote quite a bit.

You called this thread "who wants to make some money" and you've talked about what YOU need and how much YOU will make, but what about the investor? That's what matters. If your B-plan doesn't get to this point, and quite quickly, it's not 'awesome' to an investor, fund manager, banker, etc.

I see a pitfall in the fact that it's all about helping people, and there is little talk of the bottom line.

Also: if you can get $200k, take it! Start a smaller operation and build investor confidence with your real-world figures! It will go ALOT farther than anything else you talked about.

Talk to business people like business people and have some skin in the game.

Good luck.

I'd say you're on the right track with the smaller building. Be patient. Use the cash flow from the 52 bed gig to at least have X-amount of interest payments available. That would make an investor feel alot safer.

You are just sending out feeler letters, so realistically--and this has been touched on by Jon--you don't have a business yet. You have an idea. You have a model.

Go into business. Generate cash flow. Extrapolate that proven success into a bigger scenario. THAT'S what investors want to see. If you can turn $20k into X amount of $$$, then you can create an exec summary with that as support.

Glad you're moving forward.
Good Luck

I found out that I have to be Incorporated. I found the site for filing papers but I am not understanding the "shares" part. How many shares and how much each share is worth. How do you determine this?

You're too new to business. You should start VERY SMALL because your mistakes and ignorance will be magnified if you bite off more than you can chew.

You should have known this already, and your corporate structure should be a part of your awesome B-plan.

Read more books before you start, because you have one chance at a first impression, and investors will kill this plan of yours immediately.