All Forum Posts by: Charlsi Kelley

Hi Barb- 

Congrats on making the big decision to convert your primary into a rental! That is a huge win and your future self is thanking you already. It sounds like you are very detail oriented :-) which is amazing! I can't answer all your questions in depth - some are best suited for your accountant and lawyer- but I will say that there are a number of resources. I converted my home to a rental a few years ago and I did not set up any special accounts- just a regular checking account. In the past for other rentals I have used software such as rentready which can walk you through the application process for screening tenants. Since you won't be local- it may be worthwhile to use a property manager. I do that now here- even though I am local- because it gives me more time to focus on my business and I like that the tenants have someone (besides me!) that they can contact for any issues. I have found that this service is well worth the management fee. 

Here in SC we have a ton of programs for downpayment assistance and even lower interest rates- I would consider taking advantage of something like that as opposed to renting here. This is a strong market and it's a good area to hold real estate. I sent you a message and would love to connect if it's something you'd want to consider. 

Best wishes on your upcoming move!! 

 I will check that out! Thank you Nicholas! :-) 

 YAY!! So much power in positivity and a shared vision. PMing you! :-) 

I suppose some clarification on our target demographic will be helpful. I think there is a common misconception that when you say "single mom" you think of poverty/low education/low income. That is not really the case. I think we can make the most impact working with people in the 35-50k salary range. They are above poverty and therefore do not qualify for public benefits- and probably not going to qualify for enough of a mortgage to buy a decent house (at least in my area). They may have a good education and the tenacity to work hard and provide- but the costs of living and daycare are making it so difficult to save or even consider purchasing a home. This is a way for them to lock into home ownership and create some stability and solid financial footing. If I go buy a house as an investor right now using a rent to own model- there is no way the market rent would cover the nut- investors have had a hell of a time trying to even break even these past couple years. If we can get some subsidies/grants by being a non-profit to make it more affordable then that could make it do-able. Again- not profitable- this is not an investment strategy. Simply a way to actually help people that deserve it get into a safe, clean, affordable, stable home.  

 Definitely a great place to start Billy!! We have a very active United Way here that does a lot with the demographic we are aiming to serve. 

 Carini- That's so awesome to hear! That makes me so happy to see people out there being positive and doing good...this world needs more of that! 

 This is a great perspective Steve! I am DMing you :-) thank you! 

 Absolutely- I totally know the challenges firsthand working with this demographic and watching as affordability has completely been obliterated in the past 4 years. One of the ladies in our group - a single mom herself- started a nonprofit and works to get these moms into affordable rental housing. Each participant in her program has to commit to going back to school/job training and she works with them to improve financial literacy and grow their income. Her aim is more focused on simply providing safe affordable housing - on the rental side. But there is definitely a need for the segment that makes more than minimum and does aspire to own a home and build wealth. I know it's not just a house - it has to be a holistic approach that genuinely gives someone a path upwards.  

No we definitely would not be able to discriminate. I guess we will have to broaden our sights and help ALL people with the power of home ownership. I can get behind that for sure! 

Hi fellow BPers-

Do you have experience with starting a non-profit OR with starting a rent-to-own program? If so, I would love to connect! 

A little background, my business partner @Sarah Kozlik , and I both grew up with single moms and saw the struggle firsthand. We have also both been fortunate enough to see the wealth building powers of real estate. When we formed our real estate business in 2021, we knew that our "big why" was always to be able to help single moms achieve home-ownership. We are getting more clarity on what exactly that may look like and have recently joined forces with two other amazing women who are aligned with our mission. One is a lender and the other is a developer and works closely in the affordable housing space. Between the four of us we have a solid team and shared vision- we just need some tactical advice on actionable steps we can take to get this going. 

Our vision is to start a non-profit that acquires properties and enables home-ownership with a rent-to-own model- which we have concluded would probably be the most efficient way to make the most impact. Here is the rough idea:

Step 1- Use a combination of grant $ and private funding to acquire the properties **ensure the mortgage is ASSUMABLE.*

Step 2- Tenant signs lease agreement with the rent-to-own clause outlining the details. They will have a mentor that will work with them and connect them to resources (credit repair/employment/childcare/education/etc) so that by the time the balloon is due, the tenant will be able to qualify for a mortgage. 

Step 3- at the balloon period - 3-5 years - tenant will assume the mortgage balance and transfer ownership of the home. 

-obviously this is super high level and I don't have all the details figured out....but I'd love your input. 

A few issues I see- raising capital- as you can probably tell, this is not going to be profitable. I find it hard to believe that there are investors willing to give money, knowing that there is not ROI. My partner and I know we will probably have to start small and have considered purchasing one or two properties ourselves this year to test this out- but our business is not at a place yet where we can afford to sustain the losses on a monthly basis (we are well aware that we will be cash flow negative given the rates and what we will be able to charge for rent). I am mindful of building something that we will be able to scale and make more impact- and I know making this beneficial to investors in some capacity will be key.

I would so appreciate insights from others who have experience with a rent-to-own model at scale or who have started a non-profit with incorporating real estate. 

Happy New Year and looking forward to connecting and doing what we can to make a POSITIVE impact !  

-Charlsi