REI as a Vehicle for Social Change?

Question

Good morning/afternoon, all!

So I'm currently living abroad doing volunteer work, and when I get back stateside in a year and change, have plans to start investing in real estate, mostly house-hacking and transitioning into accumulating MFHs.

My question is : does anyone have creative ideas for ways to use real estate investment as a positive social change vehicle? I guess providing low-income housing in general (Section 8/whatever the new name for it is) fits the bill, but I'm looking for any out-of-the-box ideas. Is this possible only in, say, commercial property, or can anyone think of ways that residences can be used to promote social welfare beyond low-income housing and still be profitable?

Thanks in advance, I look forward to hearing everyone's thoughts!

Bill Gulley · Answer

@Steve Vaughan

Sounds like you learned a lesson, real estate investors are good at redeveloping properties, not people. "It takes a village to raise a child" there are adult children. A LL can take Billy out of the hills, but not the hills out of Billy, that takes other skills in social work, literacy, education, mental heath and sometimes the courts. There are predators on both sides of the fence. :)

Bill Gulley · Answer

Sounds like you need to work in urban planning as that is an area they strive to address.

Try looking up a thread here on BP, "Profit in Non-Profits". Social aspects of RE are not limited to low income tenants, far from it.

Look too, for the National Association of Housing Officials and Redevelopment (NAHRO).

Here are some organizations or other folks that deal in RE within their realm.

Office of Aging

Assisted Living

Advocate Organizations for the blind, handicap, children, etc.

City P&Z Offices

Dept. of Defense, especially the Corps Of Engineers

Dept. of Education

Dept. of Health and Human Services

Economic Development identifies blighted areas and funds redevelopment.

HUD/USDA have social and economic skills education

HOA organizations

Look to your local United Way, they are often the gatekeepers for funding going to community service organizations and they will know non-profit housing entities that serve an area.

Developers base growth from social impact studies, demographics are the social and economic movement of populations.

I don't know what you mean by "social change" is that a hippie farm or a community where members have like attitudes, goals and standards or are you changing the area to some perceived standard?

As to specific dwellings, this subject hasn't come up so much before, I think most "investors" don't look past the property line or understand the impact their property has on others. Housing is a human need, a social responsibility which makes RE unique to other assets. Revitalization of an area begins with one property, it could be yours.

As to seller financing, I've heard the song "I'm helping you" the question to ask (and see proof) is  the success rate, dealing fairly, not jacking up the price and selling to those who don't qualify since that is basically how money is taken, not really "made". But, yes, seller financing is a great tool and over time you can create a nice portfolio.

The issue is that you need to begin near the bottom rung to bring others up, that usually means renting first and teaching skills, first steps, then after that success they can move to homeownership.  There are organizations that have this niche, Habitat For Humanity for example but they can't use government funding and others move in where they leave off. Many rehab one house at a time and use seller financing.....BTW, non-profits are exempt from Dodd-Frank requirements.   :)

Josh Caldwell · Answer

Yes, I create home ownership by creating owner finacing deals and then passing them on to people who cant get traditional finacing.  Turning someone from a life long renter into a home owner, and providing the sense of responsibility that comes along with owning a home can alter the trajectory of a family for more than a generation.  That and you can make piles or money doing this.

Steve Vaughan · Answer

All I try and do is be a compassionate landlord with an interest in the neighbor's and communities' welfare.  For the first 6 years or so, compassionate LL just meant 'sucker.  I was burned more than most, listening to sob stories and getting screwed.    Now I have learned my limits and will direct the homeless young family to the social services designed to help them.

Social change is a very broad statement, as Bill Gulley !  I do admire the desire to be a good person in REI.

REI as a Vehicle for Social Change?

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