Home purchase and benefit

[Hfeline]

Illinois, Chicago suburbs

I've been considering collecting donations and purchasing distressed properties and allowing homeless vet and to do repairs in exchange for rent.

What sort of headaches should I expect?

 

[Zigner]

Illinois, Chicago suburbs

I've been considering collecting donations and purchasing distressed properties and allowing homeless vet and to do repairs in exchange for rent.

What sort of headaches should I expect?

It's a noble cause, but I predict that you will experience numerous and, sometimes, severe headaches.

 

[FlyingRon]

Absent forming a 501(c)(3) or similar vehicle those who "donate" to you can't take a deduction. You may find it difficult to receive sufficient donations to do anyhting useful. Given your business "model" you probably will not be able to get any reasonable financing on these properties.

Despite your noble causes, if you are employing people, you're likely going to have to treat them as employees. This means paying them at least a minimum wage, providing workmans compensation insurance, paying into the unimployment system, etc... Certain jobs are going to require licensed tradesmen and not unskilled labor. Even where not required, you're going to have to have some skilled person supervising your unskilled "vet" labor force.

You may not be allowed to have people residing in "distressed" properties if they aren't legally habitable under the building codes and ordinances.

If one of your vet workers / residents decides not to work, you're going to have to spend the effort to legally evict him (and boy have I seen that happen to people around here).

 

[Hfeline]

Absent forming a 501(c)(3) or similar vehicle those who "donate" to you can't take a deduction. You may find it difficult to receive sufficient donations to do anyhting useful. Given your business "model" you probably will not be able to get any reasonable financing on these properties.

Despite your noble causes, if you are employing people, you're likely going to have to treat them as employees. This means paying them at least a minimum wage, providing workmans compensation insurance, paying into the unimployment system, etc... Certain jobs are going to require licensed tradesmen and not unskilled labor. Even where not required, you're going to have to have some skilled person supervising your unskilled "vet" labor force.

You may not be allowed to have people residing in "distressed" properties if they aren't legally habitable under the building codes and ordinances.

If one of your vet workers / residents decides not to work, you're going to have to spend the effort to legally evict him (and boy have I seen that happen to people around here).

Long story short, I should pay from my own pocket, right? And probably have a stable financial base before I try this, right?

 

[quincy]

Long story short, I should pay from my own pocket, right? And probably have a stable financial base before I try this, right?

What you are envisioning is not dissimilar to Habitat for Humanity's Veteran Build. The major difference is that you plan to fixed up distressed properties instead of building homes from the bottom up, but you could still have a volunteer workforce.

You might want to research that organization to see how you can set up something similar: http://www.habitat.org/volunteers/veterans/get-involved

Certainly having your own money to start is a plus.