Quote from @Brian Joseph OConnor:
Yes I am very interested in this REI space myself. I am underwriting properties 4+ BR's and 3+ Baths with no HOA's and the COCROI/Cash Flow is really good. I'll link to a current house I am underwriting and I would buy FHA and live in the basement mother in law suite as a house hack. Then I'd affiliate with Oxford House Sober Living organization for some help with oversight and infrastructure but essentially would rent our all 5 bedrooms as double occupancy for men only and charge $150/week per bed. The oxford house model requires that all tenants pay equal share of the rent per week + utilities no matter how many beds are filled so if all 10 beds are not filled then the weekly rent/utilities goes up for the remaining tenants so its super predictable and consistent for the landlord. The COCROI is 85% and cash flow is $1900/month after PITI and 5% capex/5% repairs. No need for vacancy or prop mgmt contigencies. Also, the oxford house has strict rules for each tenant with 10pm curfew, weekly drug testing, weekly required AA/NA meetings, and required job/school. If any tenant fails a weekly drug test then they are immediately booted from the house no questions asked and they cannot come back until they attend a 28 day rehab and show commitment to sobriety. Also, the landlord signs the lease with "oxford house" rather than individuals so if someone gets booted for cause then there is no eviction protections or delays.
I own and operate a real estate brokerage in Phoenix, AZ. We specialize in several niche areas including:
- -Sober living facilities
- -Residential treatment facilities
- -Halfway houses
We work with many different clients in this space including Oxford House. To help our clients, we have developed proprietary software for real estate investors operating in these spaces. The software continuously checks the MLS for properties which meet both the metrics of the treatment organization (Oxford House, for example) as well as our clients cost, income, and ROI metrics, to see which homes satisfy both conditions.
For example:
- -Our clients may want to spend no more than 500K, be in specific zip codes, be buying cash and want a certain ROI.
- -Oxford House may want to be in walking distance to a minimum number of entry level job opportunities, public transit, and 12 step programs.
Our software checks for properties which meet all of the above criteria, so that our clients can purchase them and offer them as an Oxford House.
We originally developed the software to help SFR funds on Wall Street underwrite and acquire SFR assets. However we simply decided we didn't want to be in that space and exacerbating the problems those funds have been causing in Phoenix, so we instead retooled it to help investors in this space. We feel much better about operating in these spaces and using our software to help the community! :) The software is 100% free, we simply would like to be the brokerage on the purchase or sale of any properties it finds for our clients.
For dispositions, we have a wide network of clients in the sober living, residential treatment, and halfway house spaces. As such, when a client wishes to sell a property, we already have a large database of potential buyers. This is extremely helpful because no matter the niche our investors operate in, many of these facilities have the same underlying needs—particularly a high bedroom count, locations with walkable proximity to employment opportunities, strong public transit, no HOA, etc.
If anybody is operating in these spaces in Maricopa County, AZ, or wishes to, please contact me!
Aaron Gough
