Half way house - Good or bad investment?

Question

I found a property for sale that cash flow's a good amount each month ($1800-2000) after all expenses paid. It is a 15 unit building, with three bathrooms and a community living room. It is currently licensed by the state (MN) as a Department of Corrections half way house. Does anyone have experience with these? Pros/cons? I'm assuming rent is guaranteed by the state, but you probably cannot set the rent rates. Any insight would be appreciated.

Chris Seveney · Answer

I can only imagine what the expenses would be for this type of property. Lots of cons including I believe 75%+ of people have a relapse. Which would mean the place could have a lot of drug/alcohol activity or nearby it. Lots of calls for police to the property.... Not worth the headache IMHO

Bruce Woodruff · Answer

Doesn't sound like anything I would want to be associated with. You have little control and never will. That's an immediate pass for me.

There are easier ways to make money....although this may sound like good money, don't get greedy, it never works out.

Craig Sloan · Answer

@Matt Frazier if you are seriously considering it, I would check out the current lease.  Is it long term?  What are it's limitations?  Who pays it and how?  I would also want to know what the maintenance budget is.  There is the potential there for a lot of damage to the property.  I'm not saying I wouldn't do it, but I would do a ton of due diligence.  As you work through the due diligence things will become more clear.  Best of luck.

James Hamling · Answer

@Matt Frazier I suggest calling the DOC and sharing your knowledge level and consideration for there input, I say this as someone who nearly opened one. There is so much to know, it's a book in and of itself.

Denny Mears · Answer

Having a crazy person on drugs in your house can make life a living ( ask me how I know !) .. having 15 crazy addicts in one house will likely make you want to take drugs yourself !

Half way house - Good or bad investment?

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