For-Profit Investing with Philanthropic goals  

I have personally struggled with running a successful real estate company that specializes in affordable housing and manufactured housing parks. I can’t help but feel like I’m profiting off the backs of the most vulnerable tenants in America.

I explored the nonprofit housing space in earnest at first, meeting with both public and private industry leaders. And while I cannot overstate the importance of these entities and the services they provide, I walked away with a clear conclusion: Ethical, for-profit investment in affordable housing is critical to creating enough housing for the diverse socioeconomic population in this country, especially in the expensive Pacific Northwest.

To that end, I believe the most important service I can provide is to create an infrastructure that allows for-profit investors a means to achieve ethical goals of affordable housing while also generating favorable financial returns.

Can we end homelessness?

If you live, love, or visit the great Pacific Northwest you probably already know that affordability is of great concern here, and the growth of the homeless population shows that there is neither affordable housing nor a concrete plan to address it.

Like any large, multi-faceted problem, ending homelessness cannot be accomplished with a single strategy or any single entity. It will require multiple solutions working in concert to slowly reduce the problem in a sustainable manner. Community efforts seem to be focused largely within the nonprofit and government sectors, but what the private market can bring better than either of those entities is speed.

Increasing available unsubsidized housing at a rapid pace is that private market’s opportunity to excel in providing a long-term solution to our affordability challenge. Hopefully, investors can see the potential in not only serving their communities but also creating excellent investment vehicles for long-term value growth. Ideally, the provision of these units will also come with opportunities for home ownership, so that the lowest-income population can begin to build wealth in a tax advantaged manner.

Here’s a secret: It’s okay to make money

This has been a personal challenge for me, because generating a profit while working in affordable housing created a fundamental contradiction in my mind: If I’m making money, doesn’t that mean I’m taking wealth away from my tenants? In a scarcity mindset, these types of arguments find traction—if I win, that means someone else must be losing.

In truth, I don’t believe the world functions in this manner. And by adopting an abundance mindset, I’ve realized that I can create more: more wealth for investors, better conditions and communities for my tenants, and a better life for my family. None of these need to work in opposition, and in fact I find more frequently that they work in concert with one another. I encourage anyone who may be struggling with a similar feeling to embrace an abundance mindset and understand that investing in affordable housing with an expectation of financial return is still an honorable and ethical pursuit. In fact, generating excellent financial returns is the best way for me to increase affordable housing in the Pacific Northwest.

Attractive returns will generate further investment, thus enhancing my ability to accomplish my fundamental goal of solving homelessness.          

Why is manufactured housing the best way to solve homelessness?

I understand potential trepidation in listening to a manufactured housing investor and developer who states manufactured housing is the best solution, but here’s my guiding philosophy:

• Cost: Whether it's buying into and improving an existing park or building a new property, the economics of manufactured housing consistently outperform similar multi-family products. That said, a highly skilled operator and manager is needed to unlock this value (and they are in short supply), but on an absolute value basis there is not a more cost-effective housing product.
• Home ownership: It is not enough to simply “house” fellow PNW residents. They need a means to build long-term, sustainable wealth that can permanently stabilize and provide a foundation for them and their families. Manufactured housing provides an opportunity for individuals of limited means to purchase a home, begin building equity in that property, and build wealth in a tax-advantaged manner.[1] In addition to the value creation for tenants, home ownership provides a much more stable, long-term resident base that is literally invested in the community.
• Breadth: Manufactured housing allows for a wide variety of products to accommodate different markets, from “tiny home developments” in dense urban locations to more expansive rural areas that can accommodate larger homes, mobile homes can be suited to literally any community in the Pacific Northwest (and nationally).
• Improvement costs: Unlike an apartment building or other multifamily property, the inherent modularity of this type of housing means that problems can be isolated and removed in a way that is impossible otherwise. A recently acquired property can have dangerous, dilapidated homes simply removed and replaced with safe, affordable housing units without disrupting or damaging the others. This not only creates a much more efficient rehabilitation process, but also minimizes the disruption caused to residents during this time period.
• Sustained affordability: By creating and preserving home units that can be owned by tenants, manufactured housing allows residents to directly benefit from the value creation being undertaken by the property investors. A nicer, improved property means increased desirability, which leads to a wider prospective tenant base willing to purchase homes in the community. In turn, this increased demand leads to better prices for tenants wishing to sell their homes.

By adopting an abundance mindset about investing in, operating, and developing manufactured housing properties in the Pacific Northwest, I have a renewed sense of purpose and drive to continue this mission. I hope you’ll consider further researching this promising product type and location.

[1] Yes, this system can easily be abused by unscrupulous investors and managers; but with proper lease and purchase terms, manufactured housing owners can be protected and build wealth just like any other homeowner