#336: Sobriety Living Homes, Scaling Business Models, Accreditation, and So Much More! -with Sherri and Frank Candelario
August 17, 2021
Sherri Candelario, Ph.D. is a pharmacologist from the University of Washington Medical School, becoming an expert in how opioids affect the brain and is a federally registered patent counsel for numerous biotech companies.
Frank Candelario is an experienced broker skilled in zoning, acquisition, and identifying and financing housing for multi-use.
After experiencing sober living recovery homes with a family member, and assessing the pitfalls of current this recovery approach, Sherri and Frank decided to take matters into their own hands. They developed a business model that enabled people in recovery to regain control of their lives.
In 2016, Sherri and Frank founded Kate’s House Foundation, the first nationally accredited sober living homes in Washington State. Together, their mission in real estate is to end homelessness for disadvantaged women and veterans.
Frank: “What realized quickly is that… that to own beautiful property we needed to get much higher cashflow so ironically all these things meshed at one time to where if you lease by the bed for a clean and sober program you can get tremendous—2-3x the normal cash flow.”
Frank: “…our goal is not to rent to a husband, wife, two kids, and a dog. Our goal is to have a home that if necessary we could sell to a husband, wife, two kids, and a dog. Our business model created great cash flow that enabled us just to keep growing.”
Sherri: “I would say if you want to scale this appropriately, is [to] do what we are always doing which is trying to find the talent in the house to manage it.”
Sherri: “I think from day one we realized that a lot of people didn’t really know how to live together in a house because they hadn’t had one growing up… so when we look at the tragedies that people have gone through, you have to be sensitive to it but then you have to realize that you are providing a home for the first time and you’re providing a basis for people to launch into a wonderful life.”
02:46 – Sherri and Frank tell listeners about their experience with addiction & recovery, what ultimately helped Kate maintain sobriety, and how they got into the real-estate space.
05:32 – They tell us how the last sobriety house Sherri’s daughter, Kate, lived in differed from other sobriety houses she first lived in. Sherri also delves into how she and Frank came about their first sobriety housing model.
09:12 – Frank tells us about the cash flow of their first sobriety property.
12:09 – The two talk about day-to-day operations at their properties.
15:10 – Frank and Sherri answer the question: how do you determine what the demand is for recovery group homes in a given area?
18:46: Sherri tells us about the accreditation process for sobriety housing and the way their homes are utilized.
24:15 – Frank and Sherri talk about the price point they’re aiming for on their prosperities.
26:46 – The two discuss how they handle NIMBY syndrome.
29:22 – Frank and Sherri tell us if they have any personality clashes within their housing arrangements.
30:39 – They discuss their biggest challenges of scaling out models.
34: 22 – Frank and Sherri go over some of the downsides/negatives to this sort of business model.
38:38 – They talk about the regulatory risk associated with this sort of business model.
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