Andrew Lamb advises real estate investors to start sober living homes in areas with high demand for treatment, like cities with many recovery programs or dense populations. Most investors should begin where they already own property or have connections, though some target expensive coastal markets like California and Florida for long-term appreciation.
Where should you put the home? I always start with market research first, because simply just choosing a house and saying, hey, I hope this works is not really a strategy. We got to make sure that we're putting the home where the need is. And so a lot of people, I mean, if you're looking to really make this a big business, you can look at where there's a high prevalence of substance use disorder, where there's a high concentration of treatment programs, or there's a high concentration of just people in general, looking at metropolitan areas, big cities, things like that. But for most real estate investors, you already have real estate that you want to convert into this model, or you have the ability to buy, but you're more familiar with a certain area. And so instead of thinking like with the huge lens of where you could buy it, although we certainly have students in our program who have done that and they've chosen certain areas of the country in order to buy lots of real estate and partner, it makes more sense, I think, to think about where do you live now, where do you currently have relationships, where do you want to own real estate to begin with and start there? Some people want to own real estate on the coast, like in California or Florida. In certain areas where, you know you're going to get that appreciation, it's going to be a higher entry fee for sure, but you're going to be able to kind of bank on the fact fact that if you're owning real estate, it's going to appreciate, it's going to probably be worth double in 10 years, 15 years than what it is today. You can depreciate it. So if you're somebody who is a high income earner, this is a really good way to avoid having to pay taxes because you can depreciate a higher dollar volume than let's say if you bought a $60,000 home in Ohio, buy 10 of those, it still won't equal the depreciation I get on one house that I purchased in California.
