Halfway Houses for recovering drug addicts

[Jacob Wohlgemuth]

Hey Everyone, If you are experienced with investing in halfway houses I'd love to talk with you and maybe chat over a cup of coffee sometime. I live in the Golden/Denver area. Also if you know anyone familiar with this area of investing it would be appreciated if you could tag them in this forum. Thank you so much.

[Mat Trenchard]

Hey @Jacob Wohlgemuth,

I've looked into this myself in depth. As @Trevor Eweneluded to, you need to be sure you're covered insurance wise. I'm only familiar with this in the Texas market so take it for what it is worth. There is a difference between a "Half-Way" house and a "Sober Living Community". The former requires state licensing, licensed chemical dependency counselors on staff, etc. A sober living community is more just a house where the residents self govern. Obviously being licensed, a half-way house can charge more per bed. Here are the big issues that I ran into, which ultimately kept me from pulling the trigger at the time (not to say I won't revisit). You need to spend a lot of time networking at rehab facilities, counselor's offices, etc. because you are constantly turning beds. You would at least need to hire a full time manager/director if you are not planning on doing this yourself. The average stay per bed was between 2-3 months. So let's say you turned a 4 bedroom house into a 8-11 bed facility, you are turning each bed 4-5 times a year....better have a solid pipeline. Also, in my market to be competitive the houses need to be furnished (and not with crappy stuff from the side of the road), and you need to at least provide dinners during the week (which presents it's own logistic difficulties and cost difficulties). When I started putting numbers to paper, it looked like I was going to need at least 3 houses with at least 8 beds each for it to make sense. The main issue for me was the time management, this was something I was looking into for a relatively passive investment and it became clear that was not going to happen, especially at the beginning. That was my experience looking into it as a business, not to say it can't be done because it absolutely can be. It just wasn't something I had the time to dedicate to. Feel free to reach out to me and I can discuss in more detail with you.