{"id":80549,"date":"2021-09-20T09:30:00","date_gmt":"2021-09-20T15:30:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=80549"},"modified":"2023-11-07T07:23:39","modified_gmt":"2023-11-07T14:23:39","slug":"sober-living-home-investing","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/sober-living-home-investing","title":{"rendered":"Socially Conscious Investing: How to Start a Sober Living Home"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC8077857601&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p>Fairly often, people hit me up for advice on opening and running a recovery house. What they may not realize is that it could be considered another form of special needs housing.<\/p>\n\n\n\n<p>My journey with special needs housing began almost 25 years ago. At that time, I was providing low-income housing through government Section 8 programs, which provide subsidies for those of low income due to various reasons, including disability.<\/p>\n\n\n\n<p>My second experience came from working with folks who utilized Community Action either for emergency housing or for down payments or rent, often due to a distressful situation, such as being homeless with children or being a battered parent or spouse with children.<\/p>\n\n\n\n<p>But my third experience, which led me to owning and operating a drug and alcohol (privately owned) recovery house, happened pretty much by accident. My oldest son was in recovery, and he was asked to manage a house for the owner of several recovery houses in a nearby county. This is where my son had gotten well after having a long run of multiple attempts at recovery with little previous success.<\/p>\n\n\n\n<p>The second part of the perfect storm was that my wife and I were looking to downsize from our primary residence, mostly for lifestyle reasons, but the real estate market had already tanked. So, we both took some chances and decided we would open up our own recovery house with our primary residence, especially since there was a drastic shortage of facilities in our area.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a sober living home?<\/h2>\n\n\n\n<p>Sober living homes offer safety and support for people who are recovering from drug or alcohol abuse. These are homes where you live in a substance-free environment while navigating the responsibilities of the real world. These types of homes allow you to be substance-free, but you still have to deal with everything you would deal with in the real world so that you don\u2019t fall into a sense of false security.<\/p>\n\n\n\n<p>All successful sober living homes have rules and regulations that you must follow to live there, and while these rules may vary, the general guidelines are usually the same no matter where you go. Sober living homes, also called recovery houses, are group residences. This means that you live with a large group of people, all of whom are recovering from some form of addiction. Residents must remain sober while living in the house and comply with any drug testing requests.<\/p>\n\n\n\n<p>The owners of these types of homes are usually private, but charities and businesses may also own sober living houses. Most homes are located in residential neighborhoods. If you live in a sober living home, you may have your own room or have a roommate, depending on the size of the home and the number of people the house takes in at any time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to start a sober living home<\/h2>\n\n\n\n<p>The first thing you need to do to start a sober living home is write a business plan. You need to describe the type of residence you want, detail how many residents you plan to allow into the home, and provide a nice list of similar operations in the area where you are hoping to open a home. Doing all of this allows potential investors or lenders to decide whether you\u2019ll have too much or too little competition. Having too little competition means that you might be required to take in more residents than you can accommodate.<\/p>\n\n\n\n<p>You\u2019ll also need to obtain an IRS employer identification number.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Calculate the overhead costs<\/h3>\n\n\n\n<p>In your business plan for your sober living home, you should also explain how you plan to attract residents, what you will charge, what services you provide, and how to gather operating capital. You should also plan to calculate the overhead cost, even if it\u2019s just an estimate. This shows that you know how much it costs to run a residential home for sober living.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Research the licensing, regulations, and zoning laws<\/h3>\n\n\n\n<p>When you consider opening up any kind of residential home, you have to research zoning laws in your area. You must rent or purchase a dwelling, and it needs to handle the number of people you want to house. Oftentimes these areas are residential in nature, and you might face backlash from the community when you try to start a sober living home in their neighborhood. However, with regard to community backlash, the federal Fair Housing laws and the Americans with Disabilities Act are on your side and protect people who need to live in sober living homes. You do not need a license or certification to open a sober living home, but some states require voluntary certification processes to be met first.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Establish resident criteria and find a house manager<\/h3>\n\n\n\n<p>Sober living homes are usually male-only or female-only; rarely do they house both genders. By establishing this, you are setting the guidelines for who can stay in your sober living home.<\/p>\n\n\n\n<p>You need to invite a person of the appropriate gender to be the house manager to help run the house, and in situations where you have combined genders, you might want to have two house managers to even out the gender ratio. The house manager should be sober for six months to a year, and you should contract with that person for an established period of time. It\u2019s a good idea to offer a promotion from resident to house manager after a resident has met a specific period of time sober. This gives them the motivation to continue to be sober. You must pay house management. Often their lodging is free, and so are their meals, but this does not negate the need to pay them.<\/p>\n\n\n\n<p>You should be able to determine if a person should reside in your house. You should list the information an individual will need to provide during the application process, which can be anything from identification to proof of residency and references.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Promote and market your sober living home<\/h3>\n\n\n\n<p>You need to ensure you are promoting and marketing your sober living home for what it is. You don\u2019t want to be misleading, and you don\u2019t want people who do not fit the criteria to live in your home to reach out to you. It will take up a lot of your time to go through application processes only to find out the person doesn\u2019t fit your needs\u2014or, more accurately, that you don\u2019t fit their needs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The challenges of owning a sober living home<\/h2>\n\n\n\n<p>Once we had the buy-in of me as owner and my son, who had lots of experience with recovery, as a manager, the rest was the easy part. Having a good property, location, and furnishing a place might not seem like the easy part to the typical real estate investor, but it is. The hardest part is having a good manager, culture, and reputation.<\/p>\n\n\n\n<p>It also helps to have a big \u201cwhy.\u201d That\u2019s what keeps you going during the tough times. Most real estate investors have dollar signs in their eyes when they think about renting beds out, but there\u2019s also a lot of responsibility and liability that can go along with it. Personally, my son and I don\u2019t really do it for the money, as there are much easier ways to make a buck.<\/p>\n\n\n\n<p>In the beginning, besides filling up the house, the biggest challenges for us were the township and neighbors. Everyone thinks a recovery house is a good idea as long as it\u2019s not next to them. The truth of the matter is that we never really have had any criminal problems.<\/p>\n\n\n\n<p>The types of issues we usually have are things like an uptick in turnover or someone breaking the house rules. Occasionally, though, we do lose a resident or former resident, and it\u2019s a grim reminder of the life-and-death battle being fought out there on the streets in terms of addiction.<\/p>\n\n\n\n<p>Another challenge for us is the enabler in the addict\u2019s life\u2014usually a parent or spouse\u2014who inhibits the resident\u2019s recovery. The most common traits I see in a typical resident are selfishness and a lack of maturity. We have been times when we had to tell a parent that they needed to let Junior grow up and stop calling the house.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The benefits of owning a sober living home<\/h2>\n\n\n\n<p>There is some light at the end of the tunnel, though, just in the fact that you never have a complete vacancy. Residents also do chores, like maintaining the grounds and shoveling snow. There is some wear and tear on the home, but usually, someone at the house is handy in a trade. For example, some residents have been chefs, plumbers, electricians, and so on. Also, residents can span anywhere from age 18 to 65 and are from every walk of life.<\/p>\n\n\n\n<p>By far, the best part about owning and running a recovery house has been what it\u2019s done for my son and me, as it\u2019s probably one of the most rewarding things I\u2019ve ever done in my life. I\u2019ve had people come up to me crying and saying that my son or I have saved their life, their child\u2019s life, or their spouse\u2019s life\u2014and it\u2019s very hard to put a price on that.<\/p>\n\n\n\n<p>Nothing is better than to see a resident or former resident move on, land a good job, get married, buy a house, or even start a business. It\u2019s one of the greatest feelings of accomplishment in the world.<\/p>\n\n\n\n<p>Many of us know someone struggling with addiction and feel like we would like to do more to serve this community. So, if you are contemplating opening some type of drug and alcohol recovery house, a great resource when starting is the <a href=\"https:\/\/www.oxfordhouse.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">Oxford House website<\/a>, where you can learn more about running recovery houses in general.<\/p>\n\n\n\n<p>Anyway, who says you can\u2019t manage rental properties and do some more socially conscious investing at the same time?<\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_79e4195b7d28b5e94874518ca6572dca\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_736d48486a59e00a03bfe79559a8af3e\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_9cc62627cf2b9a05a7d836e5fff7d27e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/sober-living-home-investing&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/sober-living-home-investing&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Who says you can\u2019t manage rental properties and do some more socially conscious investing at the same time?<\/p>\n","protected":false},"author":807,"featured_media":140004,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524,7119],"tags":[],"class_list":["post-80549","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/80549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/807"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=80549"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/80549\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/140004"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=80549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=80549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=80549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}