Wow, what an awesome thread! Thanks for posting @Madeline J. I've also been wanting to do this too for the last couple of years, but first I had to solve my own cash flow challenges so I could get started investing. While working on that, I've read several posts like this and come up with the following process. I will definitely check out these resources from @Al Williamson, but here's my input for now.
1. Get started investing in B class properties to learn the challenges of every landlord and provide some stable income. You'll learn financing, rehab, maybe even the eviction process.
2. Get to know the people needing help. Volunteer for a local non-profit, and not just in the food line or handing out clothes. Get to know the people, learn there stories, and get an idea how you can help. Help may, or may not, be needing a place to leave. Poor and homeless is a mindset. "Poor people have poor ways" is something a friend of mine always says. If you have a hammer, every problem can look like a nail. If your property is the hammer, make sure their main problem is a nail before you go trying to solve it.
3. Buy that D class property, planning for high rehab and vacancy costs, and not planning to make a profit. Focus on helping the person rather than just putting a roof over their head. @Dawn Anastasihas some good points. I love the idea @Michael Wentzel puts out here for Financial University and Scholarships.
@Michael Delpier writes that "There are low income people that work hard. These people can be helped. There are low income people who want the world given to them. These people cannot be helped." I believe they can all be helped, but the description of the ladder person first needs to become the former. Some people have to hit rock bottom before they're motivated enough, and if you get the latter as a tenant, you're going to have to evict them so you can move on to someone else.
"Poor people are that way due to factors you cannot change" is something that @Ed Emmons points out. We can't, you are right, but God can. This is where I think many people fail, and why this business plan is often poo-pooed. I won't expand here because that isn't the purpose of this site, but I cannot emphasize enough the importance of this spiritual aspect when trying to change people.
4. Don't think this D class property is real estate investing. It's really people investing. It's social work, plain and simple, and if you want to earn a profit on the real estate you must invest in the people. This takes time and energy. And if you can't do it hire a social worker (not a property manager) who can. This is what step 2 was for - to learn this part. Your maintenance staff, lawn care team, and anyone who comes into contact with the tenants representing you should have an understanding of how to interact with them and be willing to provide tough love when necessary.
As people (your tenants) start to change, your real estate will earn a profit.
Don't assume they know how to mow the lawn or paint. But if they need to learn how to provide value to their community, show them how.
5. Ultimately, the goal is always to move people out into good jobs and nicer homes. This can only be done with a healthy local economy, and I think with some economic and business education, some of the 'graduates' of this process will go on to start businesses and provide real outlets for others. Some 'graduates' will turn out to be great resources for you in perpetuating your work in this ministry.
At this point, this is just a plan for me. Real estate is expensive, but while I save, books and reading BP posts are cheap. If you want to change the world, it must be through people. The condition of homes and neighborhoods is just a reflection of people. Thanks for reading my long post and God Bless!
