Sober living house
Amanda PaugasPro Member
Rental Property Investor · Vernon Rockville, CT · Member since 2015 · 18 posts · 14 votesDoes anyone have experience with owning/managing sober living houses? I’m looking at a portfolio of three homes, buying both the buildings and the business. Quick analysis yields a 16% cap rate, just wondering if anyone has experience with logistics In running these places, paying staff, rent collection, etc. Thanks!
@Amanda Paugas I had one all set up until Covid hit and changed my plans.
I was partnering with Oxford House. I think they operate in 36 states.
I would lease the house to them for an estimated but not guaranteed $x per room. They apply their house rules to the guests so you aren't stuck trying to evict one that relapsed. They can remove a guest in 2 hours if needed.
They require meetings where the house chores and costs are divied up, a house mgr in charge, all that. The guests pay Oxford, Oxford pays you. Seemed like they had the process down.
@Amanda Paugas I had one all set up until Covid hit and changed my plans.
I was partnering with Oxford House. I think they operate in 36 states.
I would lease the house to them for an estimated but not guaranteed $x per room. They apply their house rules to the guests so you aren't stuck trying to evict one that relapsed. They can remove a guest in 2 hours if needed.
They require meetings where the house chores and costs are divied up, a house mgr in charge, all that. The guests pay Oxford, Oxford pays you. Seemed like they had the process down.
I'm just starting to look into it. You can check out Kate's house foundation, and also NARR standards for sober houses.
Just joining BP but this is my area of expertise, we manage 50 properties (own 43 of those) for sober living specifically. Glad to help if I can. Shoot me a message
These can be difficult to finance just an FYI. I know for DSCR especially, lots of lenders don't like sober homes unless there's truly no medical services offered.
Just joining BP but this is my area of expertise, we manage 50 properties (own 43 of those) for sober living specifically. Glad to help if I can. Shoot me a message
Hi Jared - I am just starting to look into sober living homes as an investment strategy. My objective is to just offer housing but also someone who oversees the home and makes sure people are staying sober, going to AA meetings, doing chores in the home etc. Just curious how you are running your homes? do you have someone managing each home or living in? I have watched some Youtubes and most operators say 3-4 bedrooms and 2 baths are ideal. Are you being paid by a local, state or federal program? I've got alot of questions (LOL) but this is a good start. Thank you in advance for your insights
Hey Gloria!
I think it's important to note and I am the investor. We LOVE the impact happening in our homes but we are not the operators of the homes. We lease our homes to organizations who pay us one amount every month on the lease and they are in charge of the operations of the house and how the lease is getting paid.
https://narronline.org is a great resource to learn about operating effective sober living homes and the different levels of homes and care required to meet those levels. You can set up a call with a representative of their organization in your state. Oxford House (https://oxfordhouse.org) is the biggest "peer run" sober living home nonprofit organization in the world, they lease about 3,600 homes nationwide and is a good model to study as well. Hope that helps! Bless you!
Does anyone have experience with owning/managing sober living houses? I’m looking at a portfolio of three homes, buying both the buildings and the business. Quick analysis yields a 16% cap rate, just wondering if anyone has experience with logistics In running these places, paying staff, rent collection, etc. Thanks!
Hi Amanda,
I recently converted a mid-term rental into a Sober Living. I am the Owner/Operator. The home just opened and I have 2 residents in place. Biggest challenge is to network to build relationships with rehab facilities, detox centers, IOP/PHP clinics. I have a live in house manager that is also in recovery. House managers typically are offered free rent, but I am charging half until the house is filled. There are policy and procedures in place. House rules, meeting requirements, and chore's to mentions a few.
@Steve Garcia first, LOVE that you're doing this! Curious what made you decided to operate the house yourself instead of Oxford House or another tenant organization who specializes in this?
@Steve Garcia first, LOVE that you're doing this! Curious what made you decided to operate the house yourself instead of Oxford House or another tenant organization who specializes in this?
Thanks Jared! My son is battling addiction which is where I discovered what a sober living home is. I wanted to open and operate my own to serve the need in my community to help bridge those gaps between families. I am in hopes he will join me in this venture.
@Jared Galde - I saw you mentioned that you are leasing your home to an organization that operates the sober living house. I have been presented this same opportunity and I just want to make sure I have the right insurance. Do you have standard property insurance for your houses since you are leasing to the organization that would ultimately carry the insurance for operating the sober house?
@Amanda Paugas I had one all set up until Covid hit and changed my plans.
I was partnering with Oxford House. I think they operate in 36 states.
I would lease the house to them for an estimated but not guaranteed $x per room. They apply their house rules to the guests so you aren't stuck trying to evict one that relapsed. They can remove a guest in 2 hours if needed.
They require meetings where the house chores and costs are divied up, a house mgr in charge, all that. The guests pay Oxford, Oxford pays you. Seemed like they had the process down.
Hi Steve,
Thanks for your post and info on Oxford House. Did you change your plans and decide to go back into investing in sober living homes?
These can be difficult to finance just an FYI. I know for DSCR especially, lots of lenders don't like sober homes unless there's truly no medical services offered.
Key is to just mention it as an investment property
@Steve Garcia first, LOVE that you're doing this! Curious what made you decided to operate the house yourself instead of Oxford House or another tenant organization who specializes in this?
Thanks Jared! My son is battling addiction which is where I discovered what a sober living home is. I wanted to open and operate my own to serve the need in my community to help bridge those gaps between families. I am in hopes he will join me in this venture.
Just curious if you've started the process of opening your first home and how thats going? Looking at opening a home this year in California but in the research stage and trying to learn from others.
Does anyone have experience with owning/managing sober living houses? I’m looking at a portfolio of three homes, buying both the buildings and the business. Quick analysis yields a 16% cap rate, just wondering if anyone has experience with logistics In running these places, paying staff, rent collection, etc. Thanks!
Hi Amanda,
I recently converted a mid-term rental into a Sober Living. I am the Owner/Operator. The home just opened and I have 2 residents in place. Biggest challenge is to network to build relationships with rehab facilities, detox centers, IOP/PHP clinics. I have a live in house manager that is also in recovery. House managers typically are offered free rent, but I am charging half until the house is filled. There are policy and procedures in place. House rules, meeting requirements, and chore's to mentions a few.
Hi Steve, Thanks for your post and info on Oxford House. Did you change your plans and decide to go back into investing in sober living homes?
Nope, I stopped hunting altogether when I tapped out in '22. Sad.
If another seller of a good house for sober living called me (large, near the bus and amenities) I'd do it.
I'm also on the lookout for warehouse space for the Women's Service League and Stage Kids.
Higher purpose stuff than a box LLs overcharge people to sleep in😎
@Steve Garcia first, LOVE that you're doing this! Curious what made you decided to operate the house yourself instead of Oxford House or another tenant organization who specializes in this?
Thanks Jared! My son is battling addiction which is where I discovered what a sober living home is. I wanted to open and operate my own to serve the need in my community to help bridge those gaps between families. I am in hopes he will join me in this venture.
Just curious if you've started the process of opening your first home and how thats going? Looking at opening a home this year in California but in the research stage and trying to learn from others.
@Steve Garcia I'm looking into investing in a sober home and wanted to know the pros and cons of dealing with the Oxford House vs operating it myself. I want to help those in need and make more $$ than a traditional rental so I can pay my mortgages off faster without constantly repairing my houses after a tenant moves out.
@Steve Garcia - Thank you for the info. I think marketing is the key before you even get started with a home at least thats what I'm seeing from various comments and also Youtube videos.
@Steve Garcia - Thank you for the info. I think marketing is the key before you even get started with a home at least thats what I'm seeing from various comments and also Youtube videos.
These can be difficult to finance just an FYI. I know for DSCR especially, lots of lenders don't like sober homes unless there's truly no medical services offered.
Sober Living Homes --or "Recovery Residences" as the industry is now trying to move toward as far as "names" goes, CANNOT offer services. A Recovery Residence that claims to offer services should be classified as a Residential Treatment Center-which includes staff and usually medical personnel. Then they will be required to be licensed. Recovery Residences (specifically Level 2) offer housing only. DSCR lenders asked for the market rent of the property, they didnt care what I was doing with my house. I actually WISH DSCR Lenders would consider the income projections based on operating a Recovery Residence! I'd be able to scale 5 times as fast.
@Steve Garcia first, LOVE that you're doing this! Curious what made you decided to operate the house yourself instead of Oxford House or another tenant organization who specializes in this?
Thanks Jared! My son is battling addiction which is where I discovered what a sober living home is. I wanted to open and operate my own to serve the need in my community to help bridge those gaps between families. I am in hopes he will join me in this venture.
Just curious if you've started the process of opening your first home and how thats going? Looking at opening a home this year in California but in the research stage and trying to learn from others.
@Steve Garcia - Thank you for the info. I think marketing is the key before you even get started with a home at least thats what I'm seeing from various comments and also Youtube videos.
Finding a House Manager should be the first thing. They are the boots on the ground, the most important piece of the entire operation.
Just joining BP but this is my area of expertise, we manage 50 properties (own 43 of those) for sober living specifically. Glad to help if I can. Shoot me a message
Hi,
This is Hannah from RJERR LLC,
We currently marketing a property at 2635 Ridge Manor,GA and I’m exploring the idea of reaching out to Oxford House to offer it as a rental option. Oxford House is a non-profit organization that helps individuals in recovery find sober living housing, and I feel this property might be a good fit.
I’d love to hear from anyone who has experience working with Oxford House in Georgia (or similar organizations) on how to best approach this. What are the most effective ways to market properties through them? Are there any tips on how to make my listing appealing to Oxford House or other recovery housing networks?
Any advice, resources, or even potential contacts would be greatly appreciated!
Thanks in advance!
Jumping in a bit late here—looks like this thread was last active a year ago, but since others might still be exploring sober living, I figured I’d share some insight.
I’ve been operating recovery homes for nearly a decade and have worked with developers and investors across the U.S. who own the real estate and lease to sober living operators—or run the operations themselves. A 16% cap rate sounds promising on paper, but the logistics matter a lot: staffing, guest intake, rent collection, compliance with local/state regulations, and community relations can all make or break the business.
We’ve helped folks who purchase existing homes and those starting from scratch—developing systems for managing staff, automating collections, maintaining certification, and keeping occupancy high. If you (or anyone else reading) are still considering this asset class, I’m happy to share what a solid setup looks like and how to avoid some common pitfalls.
Jumping in a bit late here—looks like this thread was last active a year ago, but since others might still be exploring sober living, I figured I’d share some insight.
I’ve been operating recovery homes for nearly a decade and have worked with developers and investors across the U.S. who own the real estate and lease to sober living operators—or run the operations themselves. A 16% cap rate sounds promising on paper, but the logistics matter a lot: staffing, guest intake, rent collection, compliance with local/state regulations, and community relations can all make or break the business.
We’ve helped folks who purchase existing homes and those starting from scratch—developing systems for managing staff, automating collections, maintaining certification, and keeping occupancy high. If you (or anyone else reading) are still considering this asset class, I’m happy to share what a solid setup looks like and how to avoid some common pitfalls.
Hi Hunter, I’d like to invest in such a home but do not want to conduct any operations. I have a cabin right now on 10 acres that I am trying to rent out. I am considering making it a sober living facility. Can you provide any details or next steps so I can research more?
@Hunter Foote yes, I am interested in learning more from the angle of a supportive housing partner. I want to act as pretty much the landlord, not the business operator. I was part owner of a group home years ago so I understand the structure plus I know several people who are in the mental health field , connected to veterans , drug/alcohol addicts , etc who are always looking for houses to rent.
@Hunter Foote I'm interested in learning more. I don't know anything about sober houses as an investor but I'm 4 years into the real estate game, have done 4 flips and own 2 rentals. I am a community activist who love to help others but didn't know about this until reading here ...but sounds interesting