Building a Long-Term Affordable Housing Strategy

[Harrison Jones]

Hey BiggerPockets Community,

I’m working with an organization that’s aiming to address affordable housing in a way that leverages time as a primary tool. Our belief is that real, sustainable affordability in housing can only be achieved by taking a long-term approach—think 100 to 200 years. The idea is to start now, so over the next 30 years, we can build enough market influence to work effectively with affordable housing programs and truly drive down rental prices.

To kick this off, I’m working on our first project. The plan is to acquire 10% shares in local property management companies whose goals align with ours. The organization would collaborate with limited partners to help fund the acquisitions, with a long-term goal of buying out the investors over time. The resulting real estate portfolio would then be used to fund key community programs, like feeding elders and supporting local economic development initiatives.

This is a new space for me, and I’m still figuring out how to structure something like this. I believe there’s a unique opportunity here to build an endowment for the organization, using real estate as the foundation. Over time, the portfolio’s income could drive further growth, support local businesses, and spur economic development in our community.

My questions for you all:

1. Has anyone here structured something similar, where limited partners are bought out over time by an organization? How did it work?
2. Are there specific pitfalls I should look out for when investing in property management companies as part of a long-term strategy?
3. What’s the best way to attract investors who understand the vision of a multi-decade endeavor like this?

I’d love to hear your thoughts, insights, or even suggestions for resources. This is a 20-30 year journey, but I’m excited to take the first step and would appreciate any advice from this community. Thanks in advance!

[Adam Bartomeo]

First, I would say bravo thinking outside of the box!

Second, there isn't a lot of info here and that is understandable. 

1. No.

2. A PMC is similar to any other business where there are lots of pitfalls, too many to name.

3. This is a difficult sale... finding someone to invest is a difficult sale but asking them to invest for decades is going to be an almost insurmountable sale. 

Based on what you have described I would not invest, and I don't know any investor that would consider investing. My advice is to figure out a way to make the investment more liquid with less risk. Also, I am COMPLETELY confused about what your concept is and what you hope to achieve by buying 10% of PMC's. I don't see the vision...