Why You Should Never Start a Group Home by Looking for a Property
If the first thing you did when you decided to start a group home was search Zillow or Craigslist for properties, you started in the wrong place.
It’s the most common mistake we see — and it’s the one that keeps people stuck for months without a single resident.
Here’s why, and what to do instead.
The Empty House Problem
Getting a property before you have referral sources is like opening a restaurant before you have a menu, a chef, or a single customer who knows you exist.
You now have overhead, a landlord or mortgage to pay, and the clock is ticking. The pressure to fill beds immediately pushes people into bad decisions — taking in the wrong residents, cutting corners on screening, or spending money on advertising they could have avoided entirely.
We’ve seen students sit on empty properties for months. We’ve watched the stress of it make people quit a business that would have otherwise changed their life.
None of it needed to happen.
The Referral Source Model — And Why It Changes Everything
There are organizations in your city right now — nonprofits, hospitals, VA offices, rapid rehousing programs, probation departments — that have clients they cannot house. They have funding to pay for that housing. And they have been waiting, sometimes for months or years, for someone like you to call them.
When you call these organizations before you have a property, something interesting happens. They tell you exactly what they need. What kind of housing. What demographics. What neighborhoods. How many people they’re working with right now.
By the time you find a property, you’re not guessing what the market needs. You know. And the organizations you’ve built relationships with are ready to send you residents the moment you open your doors.
What Our Students Say About This
Saeed, who scaled to seven properties in five months after arriving in the U.S. from Ghana with $2 to his name, learned this the hard way. His first house sat empty for a full month before he started applying the referral source marketing strategies we teach.
“You have to start marketing. You have to start building relationship. It’ll change the game for you.”
Andrew Lamb, founder of Sober Living Riches, called a homeless shelter director before his first renovation was even finished. That one call opened the door to six referral organizations — all before he had a single resident to place.
Jasmine from Detroit spent weeks building relationships with shelters and transitional housing programs before she ever approached a landlord. When she finally did make that call, she had people ready to move in. The landlord ended up calling her back to chase the deal.
The Practical Steps
Here’s what the first weeks of this business actually look like when you do it right:
Week 1-2: Research the types of referral organizations operating in your area — rapid rehousing programs, transitional housing nonprofits, VA offices, hospital discharge planners, probation and parole offices, mental health agencies.
Week 2-3: Start making calls. Introduce yourself. Ask what they need. Ask how many clients they’re currently trying to place. Ask what kind of housing works best for their population.
Week 3-4: Follow up. Build the relationships. Get emails. Send information about what you’re planning to open. Ask who else you should be talking to.
Once you have 3 to 10 organizations that understand what you’re planning and are waiting on housing from you — some of our students get written contracts before they have a property — then you go find the property.
Why This Also Solves the Money Problem
When you show up to a landlord or real estate investor with referral sources already in place, the conversation is completely different.
You’re not asking them to take a chance on you. You’re showing them a business that is essentially pre-loaded. Residents ready to move in. Organizations ready to pay. Systems ready to manage it.
That’s why the vast majority of our successful students start by leasing their first property or partnering with an investor — with little to even no money up front. The referral relationships are what make that possible.
Start Here
The property is the easy part. The relationships are the work — and they’re the work you’d have to do eventually anyway.
Do it first. Everything else gets easier.
Get the Free Course HERE
Our free 5-part course shows you exactly how to find referral organizations in your market, what to say on the first call, and how to build the foundation before you ever need to write a single check. Enter your email below to get it.
