What exactly are Trans Homes? Transitional living homes provide short term housing to homeless individuals who are on a low income housing program. These housing programs are provided by multiple state and local agencies to assist individuals with low incomes, one such program is the Section 8 Housing Choice Voucher program.
This program is targeted to people with sufficient income but no money saved for security deposits or fees. Trans Homes residents are selected from individuals who are in situations of homelessness due to extreme financial hardships, abuse and addiction. This type of housing is also frequently used program for those re-entering society from a corrections facility and those needing rehabilitative services. Residents usually stay in the Trans Home from 6 to 18 months.
Transitional homes are not a permanent housing solution for the homeless; halfway houses provide long term housing solutions to the homeless and are a totally different investment.
How does it work as an investment?
There are two ways you can go about investing in Transitional Living Homes. You can either run the entire operation yourself (including forming a non-profit corporation, working directly with the state and federal agencies, finding, screen and managing clients) or you can outsource the entire operations and focus on just owning and managing the property.
Unless you are dead set on running a group home, it is better to partner with Community Services Provider who already runs Trans Homes and are looking for houses for their clients. This gives you the opportunity to make this a truly turn-key investment.
The Community Services Provider will find, screen, place and manage the Trans Home residents. They collect the rent and then pay you. In each home there is one resident chose to be the on-site manager, giving the Community Services Provide eyes and ears in each home. The homes tend to be well maintained. Residents who do not abide by the rules of the home can and will be kicked out of the home and risk losing their government subsidy. Along with on-site management, this provides significant incentive for the residents to take care of the property.
Why turn key investments?
Turn-key investments are the only way to truly passive income. Passive income allows you to fund your live style and allow you to pay for the things you want now and allow you to put money away for things you will want in the future. A turn-key investment minimizes your time and efforts needed to generate an income.
What kind of government regulations apply to my investment home?
Unlike Adult Foster Care Homes, there are no government regulations on the home owner other than providing a clean safe home with a city certification. But that is a totally
What is the demand?
At this time there is an almost unlimited demand for space inside a Transitional Living Homes program. This is one of those investments that are aligned with the current economic trend. The additional economic hardships that are coming will only increase the demand for this type of housing as more people become homeless due to job loss or reduction of income from working less.
How is the home managed?
Assuming that you “outsource” the Community Services Provider portion of the business, you would be responsible for only the home. That includes home repair, home maintenance, snow removal and lawn care.
Opportunity to give back
Unlike with most investing there is a tremendous opportunity to help people who are homeless while at the same time create outstanding investments. This is investing at its best.
What are the exit strategies?
There are two basic Trans Homes exit strategies. The first one is base on the basic premise of the program, which is to help homeless individuals integrate back into society by helping them get a job and own a home. The goal is to get one of the residents in the home to a point where they can carry a mortgage and subsequently purchase the home where they are living.
The second option is the provide 30 day notice to the services provide to vacate the premise. It will usually take another 30 day to relocate the current residents. So in about 60 days you can be in a position to sell the home.
How much money can I make at this?
Let me give you an example, a house in Detroit that would normally generate about $850 a month income will now get over $1,920 a month income when converted into a Trans Home. The best part of the story is not the income but the profit.
That home in Detroit will have about a $700 / mo holding cost. So your profit is only about $150 / mo. When you make it a Trans Home, you profit goes from %150 / mo to over $800/ mo! That is over a 5 fold increase in profits.
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