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Posted almost 11 years ago

My Most Rewarding Rental

Over the last 25 years I've had or managed just about every type of rental property you could have: including everything from high end residential, commercial offices, garages, mobile homes, section 8, battered women with community action, etc. But none have been as rewarding as my latest project Clearview House; a drug and alcohol recovery house that I opened with my eldest son about two years ago.

How it started...

The idea began when two things simultaneously happened. The market crashed right as I was moving to my new house, leaving my old house (a 3000 square foot, 5 bedroom, in a great neighborhood) upside down. At the same time, my eldest son was just about to become a manager at a recovery house he had worked in for quite some time. So it hit me, I thought why not get creative and turn my old house into a recovery house! It's much easier said that done, believe me, but in a relatively small amount of time we did it.

One of the biggest misconceptions about opening a recovery house is that people think that you need to be zoned properly or that you must find a house that is in the right zone to operate but that is simply not true. Because of Fair Housing laws, people in recovery are considered to be a protected class and technically "disabled" during recovery. As a protected class it would be illegal for a township to throw them out on the street for violating a familial law based on the number of unrelated tenants.

Now that the misconceptions are out the window, I should tell you the two things I found to be absolutely necessary in operating a recovery house. The first is an incredibly good manager. Lucky for me I had my son who had years of experience with recovery and recovery house management. He knows the needs of these guys before they walk in the door and it entails among other things: hosting/scheduling meetings, speakers, activities, employment opportunities, as well as other things that help guide individuals through recovery.

And just as important as management is the environment we have to create for said individuals. Aside from strict schedules we help coordinate between work, chores, activities, we also like to provide structure in the group setting itself. It's tough in the beginning without a reputation and enough guys to fill all the beds, but with quality service and support it builds quickly. The group helps to facilitate recovery and senior members create a hierarchy so newbies have people to look up to, ask questions, etc.

Running a recovery house initially has more challenges and expenses but once it's up and running it's a lot more rewarding socially and financially (12 guys at $160/week in a 5 bedroom can be pretty lucrative when you do the math). Of course we provide meals 4 nights a week and furnish the place, but the guys in the house take turns cooking, doing chores,and even minor maintenance (I've never seen a more varied background in a group of tenants before). They're just so grateful to have a safe bed and nice place to stay where they can focus on their recovery. Without getting too political, insurance runs out for most of these guys after 28 days in recovery, leaving many of them homeless or close to it without a place to go to help them get back on their feet. Now Clearview House doesn't provide a solution to this problem nationwide, but it's certainly a proactive step in the right direction.

Reaping the Rewards

It really feels good to be making a real impact on peoples' lives and a true difference in the community. I also hold a mastermind group for the guys and we cover various life skills and self-improvement. Again it's more of a challenge to teach these guys financial education than a lot of real estate investors, but it's also more rewarding when you get to see them put their lives back together as they save for a car or apartment. My one guy is even ready to buy his first house! It's actually pretty exciting. I never thought when I first got into the rehabbing business years ago that I would go from rehabbing houses to helping to rehabilitate people.

So, if you're tired of the same old rental why not try something new and more rewarding? It doesn't just have to be recovery houses, I have a friend who has 40 units he rents to disabled vets through his non-profit. So don't be afraid to get creative while you help people along the way! So what's your most rewarding rental?

Comments (8)

  1. What a rewarding way of doing real estate! I had some connections with a battered woman's group in my area. Next time I meet up with someone in that industry I'll ask them how it works in this part of the world.

  2. Thanks Dave. In terms of services, the only things you provide are furnished facilities, meals for 4 days a week? Do you also bring in counselor and financial education services? Does your manager actually reside in the asset or just go it on a daily basis?

    1. I teach life skills on Sun. afternoon & we hold a weekly mandatory house meeting. We also have both, an in house manager & my son (who is in recovery) oversees him as well.

  3. Hi Ankit, Just an FYI, my recovery houses are privately run & most of the tenants or their family pay their rent. Once in awhile we get someone on disability, but no government agency pays us. (Maybe that's why we're so effective) My manager & myself network with several detox facilities, AA meetings, etc. to search for residents, but today we have a long waiting list. That's one of the benefits.... you never have a vacancy. BTW, check out Nick Sidoti,, he teaches more about these topics. Good Luck! DVH

  4. Wow this is a great article! I've never thought about this avenue and it is very intriguing. Thanks for opening up the door to even more opportunities in real estate.

  5. Dave Great blog post. Thank you. One question in your opinion, how should an investor go about getting special needs tenants if one does not have a non-profit? Who pays these recovery tenants rental on a weekly basis?

  6. Our church is very involved in a shelter ministry to homeless women. One volunteer is very interested in helping open a boarding house or rooming house for them. Time to start my research to find out what it would take to open something like that in this town...

  7. Dave Van Horn are you telling me you can make money AND help people with real estate? Of course! It's possible to reap financial rewards for being the solution to big problems. Your story is additional proof. Thanks so much for sharing.