Real Estate Investing to Give It All Away

[Kealan Hobelmann]

Hi all, long term reader and podcast listener excited to be officially joining the BP community.

My brother and business partner Cody Hobelmann and I have a little bit of a unique story and goal when it comes to real estate investing. Both of us work in other professions and are happy with our current careers. We also have all the income we need, and aren't looking for any additional income streams. In fact, we've each chosen an income limit for ourselves and our families and give away everything that we earn over those limits. We call that limit a financial finish line, and everything over that limit we use on others, either through nonprofits serving people all over the world or by helping people directly.

While that concept isn't something we came up with ourselves (many others have done the same), it turns out that when you give away money to help others, it starts to get addicting. And as we have been able to give more and more, we have started to seek larger scale strategies to augment what we are able to give.

Our goal is to invest in BRRR SF and small MF homes to stabilize them, rent them out, and give away the cashflow indefinitely. As I mentioned before, we have no need for additional personal income streams. We are more interested in using real estate to produce "giving generators" that ultimately will produce far more impact that the upfront capital required to create them.

Our first goal is to use our own funds to BRRR several SF or small MF homes to iron out our processes and to give away the cashflow. Longer term, our goal is to crowdsource larger scale funding from like-minded people to scale our strategy and allow others to augment their giving in the same manner.

Essentially, we would be modelling off the microfinance organization Kiva (www.kiva.org/) which allows people to make small scale microloans at 0% interest to people all over the world to start small businesses. (i.e. start up cost to buy a sewing machine in Haiti to start making clothing, or buy a chicken in Indonesia and sell the eggs, etc).

Our goal would be to source projects and attach them to local or global causes (like a BRRR SF home with monthly cashflow supporting a charity drilling clean water wells in Africa, etc). Crowdsourced donors (or "investors") would provide 0% interest loans over 1 year to fund the project, and then after rehabbing/refinancing the property, they would get their "donation" back to keep or to reinvest in another project.

The goal is not to provide returns for the donors/investors, but rather to provide a cyclic augmented giving option for people who were already planning to donate money. However, in this sense, they'd actually get their donation back in the end.

I'm curious what kinds of issues you might foresee in getting something like this off the ground. Specifically:

- What kind of organizational structure is best suited (LLC, nonprofit, etc)

- How would you approach this from a tax standpoint (people are essentially giving 0% interest loans, so can't be tax deductible donations, but also likely no capital gains)

- What issues would you foresee and what kinks are there to figure out

All ideas welcome! Thanks all, looking forward to connecting.