Special Needs Housing?

Real Estate Guru, Book & Course Reviews and Discussions 41 Replies

If anyone has worked with Nick Sidoti and had success with Special needs housing I would like to speak with you. The concept is a good one although I'm doubtful one can expect to triple their returns. I'm willing to compensate you for your time.

Hi, David!

I work with non-profit organizations and we provide housing for their clients.

What I did, literally, was call the non-profits in my area that offered emergency housing, offer your property as an opportunity for housing, and they will place you on their list. It's always good to call and meet them in person with a flyer of your property and some other form of credibility (tenant references, brochure, etc.).

Also, keep your ears and eyes to what's happening in the community. Read the paper and listen to the news. There are plenty of org's that are looking for housing but 1. The housing in the neighborhoods aren't visually attractive nor provide safety 2. Most of the active investors aren't in low-income neighborhoods.

It's all about relationships. Check out my recent blog post and hopefully it will give you some insight.

Be Blessed!

Hi Sonja,

Thanks for your response. It sounds like you are doing what Nick Sidoti teaches. I'm looking to buy his course too and it seems like you were able to do a lot of this without splurging for his course.

It also sounds like these organizations are looking for rentals that are in low-income areas? Is that true? Nick Sidoti preaches that this is literally a "waterfall" of "quality tenants" coming your way. Do you find this to be the case? Or do you find that you the non profits you have relationships with have a steady supply of housing providers to choose from?

Thanks again for posting, much appreciated

Jason

Sonja,
I am interested in providing this type of housing, however how is the landlord paid? Are the criteria for rental the same or more stringent than section 8? Hmmmm.... I'm very interested!!

A buddy has Nick's program. She bought a 4 unit for 60K put 10K into it, instead of renting each unit for 1K she rents per bedroom 550 each, the house has 14 bedrooms that 8K 5K after expenses.
She had a 3 family across the street an out of state owner had a 3 family but he was renting for 1/3rd she was. She connected told him she could get alot more $ for his rental. Ten bedrooms all filled she takes $100 month per bedroom making 1K a month on a property she doesn't own.

Ok, here are my replies:

@Jason mak- yes, most of the non-profits have tenants and/or housing in low-income areas. Most of the tenants choose to stay in these areas due to familiarity as well as transportation (i.e bus routes). In my experience, most of the org's that I work with have very little housing resources and yes, the harvest is plenty when it comes to tenants. The biggest issue here in Memphis is that tenants need housing that includes utilities. The tenants either 1. have outstanding balances with MLGW (Memphis Light Gas and Water)and can't get their services activates or 2. can't pay the monthly bill due to fixed income.
Also, org's in Memphis mostly provide temporary housing; we offer permanent housing and their referrals get top priority.Just keep in mind the type of tenants that these org's assist; they are normally not your ideal tenants. The good side of this is that non-profits offer additional support and make the tenants accountable for keeping their units clean/paying their share of the rent (if necessary) to stay in the housing program. Hope this answers your question.

@ Natasha-- From our experience, the req's that non-profits have are not as strict as Section 8; if you ask, they will surely provide a copy of their requirements. They will come out and inspect the unit. If there are items that need to be fixed, they will let you know.

What I did to get our units 100% occupied was really simple, I just googled the non-profits in my area and called every single one (literally) and asked about their housing program. I informed them that we offered rental property and that we would love to support their mission and the phones haven't stopped ringing. Get to know the community and the people who serve in that area. Take part in the events there. We are taking part in Project Homeless Connect tomorrow, offering housing and also small job opportunities (we need a handyman and a resident manager). What better way to support the community than to offer jobs and REAL support, not just making a quick buck. Just some things to think about.

Be blessed, y'all :0)

Sonja Bell : Thanks for your timely information. There have been several posts about this concept and one in particular in GA but It appears as though the concept of renting by the room with full amenities is there but not to individuals with special needs.

Have you been in contact with anyone from the veterans administration? They have a program that helps get homeless vets into a home but I have not been successful with them yet.

Which non profits were the most successful for you?
Do you look to fill large 4 or 5 bedroom homes or could smaller 3 bedrooms properties work?

Originally posted by Michael Lauther:
Sonja Bell : Thanks for your timely information.

Old post. Someone bumped it

Thanks Ken: Did not see the date I have been working on this concept since early last year in my market but not hard enough .

have not met anyone working this successfully.

I have about 15 years involvment with low-moderate income housing in my area, board of directors of our Habitat For Humanity affiliate and started non-profit housing organizations for different needs.

I bet the OP and those making older posts have left the building. Good points that it's all about relationships with other oragnizations. One suggestion starting off is to make sure you are not duplicating services in your community or get into competition with other non-profits. Non-profits live for grants and donations and it's very competitive and political, don't step on another's turf.

@Michael Lauther what are your ideas? How deep are your intentions? Do you want to start a non-profit or act as a landlord with properties modified for special needs?

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

Bill, for now I would get my feet wet by acquiring one property that would be suitable special needs Housing. I have been exploring and posting on this subject for some time but it appears those who are working in this field are not talking.

I contacted one of our members Sonja Bell and asked her to update her experience. She indicated that she is working with The VA in her area. This is precisely where I am at in Dayton.

I need to get to Dayton Soon to facilitate the claim on my recent fire loss so that would be a good time to meet the good people at the VA.

I don't have sufficient resources to make a new non profit venture workable yet but that is an idea I am exploring.

I'll walk you throuh starting any housing entity or arrangement for vets. It should not be difficult or very costly at all, but it is time consuming.

For a non-profit you will need at least three non related parties you trust and can work with as directors and you go in as the executive director so you can be paid for management.

Another way is to contract with an existing non-profit, much easier, and the more guidance you can provide the more valuable you would be to them. Thinking in terms of one property, IMO is not sufficient, more like ten at a time, but remember, if you partner with an existing non-profit you can have alot of horsepower to get things done. Financing can be entirely different than what you have probably done.

We can run through whatever here, but what do you have in mind?

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

Sonja, Bill was responding to my interest in special needs housing. I would be interested in how you became involved with non profits and which ones are the best candidates for working with landlords.

Bill I would be interested in learning more about setting up a non profit to provide these services but am not sure if this is the forum or perhaps a new topic.

In any event much of this topic has been spurred on by the marketing of Nick Sidoti's claims of 3x market rent with no landlord headaches.

Soja, are you aware of Sidoti's program or have you been operating in this market for some time?

Michael and Sonja, be happy to address the subject of each, I'll start another thread.

As to that claim;

I can see where a group home, converted from a SFD with a special use permit for zonning can produce 3 or 4 times the revenue for specific tenants. The one I was affiliated with had been added on to to facilitate 4 residents, wheel chair dependant and who had shared assistance, set up much like a nursing home but with mediacl care. Because no similar housing was available rents were higher on a sq. ft. basis, but construction was major and was not the cash cow it would appear to be saying 4X higher rents.

SFDs in this area are slightly higher than the norm or at pretty much market rate. The great part is that tenants don't move as much so you get a long term tenant.

Sounds to me like hype again for this program mentioned.

Leasing to existing non-profits long term will not generate higher rents, in fact they want a better deal. Having your own N/P and generating your own tenants can get slightly higher rents but they need to be justified. It depends on the modifications too, wider doors, open cabinets, pull under sinks, reinforced ceiling attachments for slings and bars, larger bath rooms, roll in showers, exterior ramps, van accessable garage with additional space and ramp, bed and bath alarms and open floor plans are hard to find. Some conversions are inexpensive, some are not.

The best thing about N/P special housing is 1. generally a great tenant, 2. Longer lease terms and stability. 3. Actually providing a needed service and a good reputation in the community (depends on what king of housing). Lastly, almost zero liability under state law for N/P corporations for Officers, directors and employees, they have to really mess up as intentional acts are not covered, but such persons acting in good faith under a N/P can not be held personally liable!

I'll start another thread...

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

I am looking forward to it Bill. Thanks

Folks - Please do not post solicitations in this thread; I've removed 2 already. This is a discussion area. If you want to advertise yourself or your services, please post an ad in our Classifieds forum (you must be a PRO member to do so).

Thank you.

Medium fbprofileJoshua Dorkin, BiggerPockets | http://www.biggerpockets.com | Podcast Guest on Show #100

Originally posted by Michael Lauther:
Sonja Bell :
Which non profits were the most successful for you?
Do you look to fill large 4 or 5 bedroom homes or could smaller 3 bedrooms properties work?

Some of the non-profits that we've been successful with are the Salvation Army, The Community Alliance for the Homeless, and MIFA (this one is local to Memphis). You'll have to research the local agencies in your area that specialize in helping the homeless.

Regarding the types of housing to purchase, I wouldn't purchase anything until you talk to the agencies about their needs and what their housing vouchers include (if they offer vouchers).

Originally posted by Bill Gulley:
One suggestion starting off is to make sure you are not duplicating services in your community or get into competition with other non-profits. Non-profits live for grants and donations and it's very competitive and political, don't step on another's turf.

I agree with Bill. I originally thought that starting a non-profit would be the way to go, but, especially when it comes to applying for city funding, you can partner with a non-profit and get more accomplished. They provide the funding and the need while you provide the expertise in property rehab/management.

Simply visit the non-profits and ask, "How may I help you?" :0)

Originally posted by Michael Lauther:

Sonja, are you aware of Sidoti's program or have you been operating in this market for some time?

I just got involved in special needs housing about 2 years ago. I haven't heard about Sidoti's program but I've heard of other programs that provide online membership access to housing grants. Unfortunately, you have to pay for additional assistance. Waste of time and money.

Good point, I have no idea of what is in that book and I have never heard of the guy. If you are interested in this segment you can ask here. Another source of information will be through the public housing autorities and the National Association of Hoisng Officials (title might be longer ?).

I believe that the PHA in Broken Arrow, OK was one of the first to blaze this trail and received national attention.

The subject is pretty open book stuff so I don't think you would need to go a guru route. Good luck....

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

Sonja, Thanks for replying to my questions you have been helpful. Glad to see you back on BP I will keep you and Bill posted on my progress In Dayton.

Very interested in the special needs housing niche that Sidoti talks about. I too am interested in hearing if anyone has had any experience with his methods.

I have actually spoken to Mr. Sidoti on the phone about this program because I was very interested in it like it sounds like many of you were/are as well.

He was a nice guy but here was the BIG thing that sent me running.

He didn't talk in a lot of detail about how his program actually works but one thing he did say was something that sounded highly dishonest. He said that he teaches his students to go into these local government agencies, basically smooth talk them and get them to sign a contract that he provides that says that they cannot get out of the arrangement (and a bunch of other things in the small print). He said that you have to do this first without giving them any details on what you are trying to do because many officials won't accept your proposal by giving details first because they are skeptical. He also said that it is very important to try and target happy go lucky government workers who don't question what you are trying to do as much…..I know….He literally said that!

When he started going into this I ran as fast as I could away from it. He also said that without using this method it can take years and years to get through all of the government red tape so of course, he wants you to believe that it can't be done without him.

I would not recommend his program to anyone because basically it was based on conniving and being dishonest to get these government contracts and I don’t believe that any form of business should be shrouded in dishonesty just to make an extra buck.