All Forum Posts by: Craig Herrmann

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $270,000
Cash invested: $67,000

This is our 2nd single-family property with long-term tenants in recovery. What a great opportunity to serve this community with safe and affordable housing. We design for living.

What made you interested in investing in this type of deal?

Recovery housing is a major issue in the United States. we are not just proving safe and affordable housing, but helping people in different communities get back on their feet and help serve others.

How did you find this deal and how did you negotiate it?

The property was presented to us by the organization we work with. We made an offer based on the organization's proposed monthly rent.

How did you finance this deal?

I financed the property as an individual and placed the property in an LLC.

How did you add value to the deal?

We turned the dining room into a 6th bedroom and replaced the HVAC unit and hot water tank.

What was the outcome?

The terms of our lease start at a 2-year minimum and can expand to 3-5+ years in length and routinely twice the amount of normal market rent, providing stability and high cash flow.

Lessons learned? Challenges?

When analyzing investment properties, always research property taxes for non-owner occupied properties. We learned the hard way that investment properties (non-owner occupied) pay higher property taxes, similar to owning commercial property. In this particular case, it was almost 3 times that of owner-occupied single-family homes.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

This property was financed through Ridge Lending Group.

@Paige Howarth, when compared to a single-family rental, I am getting above-market rent, and the lease term is for two years. They gave me a suggested monthly rent price. If the numbers didn't work for me financially, I would have countered with my suggested rent number. If they couldn't swing that number, then my offer for the property would have been lower.

Do you own any properties that you are leasing to OH?

@Leatha L. Luttrell, I just got my first property leased to an Oxford House charter in South Carolina, and looking to do more. I hope you've had some progress.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $116,000
Cash invested: $25,000

My first rental property! This is a single-family dwelling with a long-term lease for recovery housing.

What made you interested in investing in this type of deal?

My design business vision is rooted in faith, so being of service to others is a major part of my real estate investing business plan. Providing safe and affordable housing for recovering addicts and alcoholics fills that desire to serve others.

How did you find this deal and how did you negotiate it?

Working with a coach that invests in recovering housing opened many doors. It was a team effort. The process was very similar to a whole sale.

How did you finance this deal?

It is a BRRRR. I paid cash for the property, did some minor repairs, rented it, and now refinancing to get cash back to do more.

How did you add value to the deal?

Turned a half bath into a full bath, creating a laundry room and opening up the kitchen, dining room, and living room.

What was the outcome?

This is a single-family house with 4 bedrooms and 2 baths. It sleeps 6 adults with a lease for 2 years. It has a CoC of 20% and cashflows of $500.00 a month.

Lessons learned? Challenges?

It is an out-of-state investment property, so coordinating the repairs and renovation work has been a challenge.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am in the process of refinancing with Ridge Lending Group. They have been great to work with.

@Patti Robertson, thanks for your reply. I am in direct contact with a Northeast regional manager from NJ and they want to expand their charters in New England. I plan to document the process and will keep the BP community informed about all the amazing things Oxford House is doing.

@Patti Robertson, quick question. What was it about the location that the Oxford House didn't approve?

@Jacob Sampson, thanks for the reply. I reached out to the main office and heard back from a local outreach member from Rhode Island. They are having their convention in DC this weekend and hope to hear back next week. I'll keep you posted.

@Vic Liang, are you the owner of this Oxford House? If so how are things going for you? Have you bough anymore single family homes for them?

@Leatha L. Luttrell have you had any progress with this opportunity? I am also interested and researching.

@Lora P., same questions applies to you as well. Any luck with this concept for you?