The First Steps to Opening Your Group Home

#1 How Much Can You Charge

The easiest way to start your Group Home, no matter what specific niche it is if you do want to target 1 specific niche, is to simply provide housing. Outsource any licensed care to Home Health Companies so you don’t have to deal with additional licensing and regulation, and charge per bed or per room. We typically charge per bed, and the fee is going to vary depending on your market. Figure out how much a 1 bedroom or studio apartment goes for on average in a comparable area, plus all bills: water, electric, cable, internet, etc. Then charge 50-60% of that. We operate in areas where this price is ~$1,000 and charge around $600 per bed.

#2 Be Aware of Local Rules & Regulations

You need to abide by the same local property codes that any other housing providers need to follow. If there are any restrictive laws that prohibit “Unrelated Occupants”, these can and have been challenged by Federal laws that prohibit discrimination in housing. Check out the OXFORD HOMES for example, OUR FOUNDER has dealt with this many times, and you can listen to Merline’s short run in with Code Compliance HERE. Once the Fair Housing Act was brought up they were quick to leave. However, you do need to know how many tenants per square feet are allowed and things of that nature. You don’t want to be operating out of a home with small bedrooms, then find out you can’t house 2 people in that room. Check out THIS ARTICLE HERE for more details on that.

#3 Marketing

Now, why is this before the next step you may ask? Think about it: do you want to put a down payment or deposit down on a home, then scramble to find tenants before the first payment is due in 30 days? You might have the resources and time to do this, but many of our members do not! So the first step before acquiring the property for most people is to start marketing. Build a contact list using the keywords taught in OUR FREE 10-PART COURSE of organizations serving the population in need of this type of housing and start reaching out to them.

OUR FREE 10-PART COURSE will provide marketing material and scripts, but essentially you just need to find people looking for housing. The tenants will be on either assistance for their housing, or these organizations will be paying you directly. We recently had a client call us frantic! She needed a home! Why? Because she followed our marketing steps and she had caseworkers checking in with her every week! “Hey, we still have about 10 people that need housing, have you found your home yet?” This is a great problem to have and when you’re in this position, you will be much more motivated AND confident to move on to the next step.

#4 Finding a Home

You don’t need a large commercial property or building or anything like that. We operate in residential homes/neighborhoods, and the majority of our members do the same. You do not need to own the home. We have many members get started with little money by renting, acquiring properties with creative strategies that we teach in OUR FREE 10-PART COURSE, just like JAMIE DID, or partnering with Real Estate Investors if they have ZERO to start (Email me for a FREE SCRIPT YOU CAN USE). Look for as many bedrooms as possible. We will typically look for 4-5 bedroom homes that have convertible garages. Your acquisition cost will not directly correlate with the amount of bedrooms the home has. For example, if a 3 bedroom might rent for $1800, a 4 bedroom in the same neighborhood is not going to be $2400. It will typically be around the same price of the 3 bedroom. Your REVENUE will directly correlate though! If you were charging $600 per bed, your revenue per bedroom would be $1200. In a 3 bedroom home your revenue will be $3600, 4 bedroom it’s $4800, 4 bedroom with a converted garage it’s going to be $6,000! See the power of this business model yet??

#5 Getting the Home Set Up

This step is actually pretty simple. You don’t need a bunch of medical equipment because remember, you are outsourcing any care that requires a license. You just need beds and furniture. It doesn’t need to be fancy at all! In fact, we don’t even recommend high end stuff unless you are targeting high end customers. If you’re on a tight budget, like many of our members are, you can use “crowdfunding” through Facebook, or even through more creative strategies like THIS MEMBER did. OUR FREE 10-PART COURSE will come with full shopping and grocery lists and you can check out one of our homes HERE.

#6 Simple Systems to Put in Place

If you follow the simple systems that OUR FREE 10-PART COURSE teaches, your “role” as the operational manager will be very similar to property management without the typical stresses. Use the “How to Get Paid Guide” to get set up for guaranteed payments every month. Set the tone from the very beginning and let tenants know what will happen if they don’t follow the rules. Avoid the eviction process with our License Agreement. Your House Supervisor will be the eyes and ears on the ground. When or founder was full steam ahead, each operational manager oversaw FIFTEEN HOMES. This was a full time job for sure, but check out the next step.

#7 Create Your Lifestyle

Refer back to steps #1 and #6. Let’s do some math to really see the power of this business model. Let’s say you have a 4 bedroom generating $4,800 in revenue. Remember we will convert to more bedrooms, but we’ll keep it simple for the example. Say you spend 50% on expenses (bills, rent/mortgage etc). Your NET is now $2,400. Now go head to biggerpockets.com, take a look at all of the investors that post their success stories about cash flowing $200 per month and have a giggle. Now remember #6, an operational manager can handle FIFTEEN HOMES at full capacity! That’s hustling though! Even with the systems, you’re going to have maintenance calls, tenant inquiries, showing the property, getting rooms ready, shopping for supplies etc. etc. The day to day activities can definitely add up and this can become a full time job. But let’s do some math.

You’re netting $2,400 Per Property Per Month
On Fifteen Homes that is $36,000
We already factored expenses! Is that per year?? NOPE! PER MONTH!
Annualized, that comes out to $432,000
So FOR SURE it’s a lot of work, 50 hours plus sometimes, but think about it…does that give you enough to replace yourself?
A high paid Property Manager makes around $75,000 per year. Do you think you could find someone like that to handle the day to day activities? What do you do with the leftover income? What do you do with your time?

WHATEVER YOU WANT

If you want to scale even bigger you can. Check out the Business Plan that Andy used to do just this in OUR FREE 10-PART COURSE Important Document Section. Now you can see why Andy had the time to put together all of this material, run his other businesses, invest in Real Estate, and go on vacation whenever he wants. And the best part…

He’s Helped THOUSANDS of people in need!! These are the real “Riches” we talk about!

It’s not Rocket Science and you can do the same thing!