The Graduate House: Sober Home for Long Term Tenants

[Douglas Chandor]

Investment Info:

Single-family residence buy & hold investment in Wollaston.

Purchase price: $740,000
Cash invested: $185,000

6 bedroom home with 6 sober men (1 tenant is on-site manager) - $225/wk per room = lower turnover, higher quality tenants and still provides positive 5 figure cash flow every month. Also, a low maintenance long-term hold that builds equity at the same time.

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

Most sober homes pile tenants in - often 2-3 per bedroom. Quality of homes is typically atrocious. Forces those in the recovery process to move out of sober living before truly prepared. Need more sober house owners willing to put recovery/tenants needs - over the bottom line.

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

Found it myself - used local broker to close it.

How did you finance this deal?

Investment prop mortgage - 25% down.

How did you add value to the deal?

Recognizing the need for more stable long term sober housing. Quality home that puts one bed in one bedroom.

What was the outcome?

Tenants stay longer and they stay sober longer too! Consistent positive cash flow and long term equity being built.

Lessons learned? Challenges?

More sober homes should follow this model - just don’t want to be the only investor willing to do it!

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

Worked with @SeanEisnor - who is a great agent with eye for value and opportunity.