Episode 367: Building Wealth Through Strategic Group Home Investments with Jon Wells
I just had an incredible conversation with Jon Wells on the DealQuest Podcast about a real estate niche that most investors have never even considered.
After 25 years in Denver real estate, Jon discovered something remarkable: group homes for mental health and sobriety programs that generate 6%+ cap rates with almost zero landlord responsibilities.
Here's what struck me most from our discussion:
- Jon's "fix and flop" philosophy completely changed my perspective. "My best deals were the ones that didn't sell," he told me. Those failed flips that he couldn't unload? They became his most profitable long-term holdings and led him to this overlooked niche.
- The economics are compelling. While everyone fights over compressed margins in traditional real estate (Jon watched fix-and-flip profits shrink from 25% to barely 10%), group homes maintain 6-13% cap rates even in high interest rate environments. His mentor has accumulated 1,000 beds. Jon manages 30-40 beds that provide what he calls "a great living."
- The structure is brilliantly simple. Operators funded by Medicaid and grants handle everything - maintenance, tenants, daily management. Property owners collect rent. It's "as close to a triple net deal as you can do" in residential real estate.
- The vetting process Jon shared was eye-opening. Drawing from his 1990s experience helping people save properties from foreclosure, he applies rigorous financial analysis to operators. The key: finding those with grant funding, solid track records, and willingness to accept purchase options so they treat the property like their own.
What impressed me most was Jon's disciplined approach to avoiding shiny object syndrome. After a syndication advisor told him "I wouldn't touch that with a ten foot pole," he pivoted back to what he knows works - paying off mortgages and creating owner-carry notes for stable, predictable income.
The lesson? While everyone chases the same crowded strategies, the best opportunities often hide in markets others don't even know exist. Sometimes the path to financial freedom isn't about following the crowd, but about finding overlooked niches that match your values and expertise.
Listen to our full conversation on the DealQuest Podcast where Jon reveals his complete framework for evaluating group home opportunities.
FOR MORE ON THIS EPISODE: https://www.coreykupfer.com/blog/jonwells
FOR MORE ON JON WELLS:
https://www.linkedin.com/in/jonwellsrealtor/
https://abetterwayrealty.com/
FOR MORE ON COREY KUPFER
https://www.linkedin.com/in/coreykupfer/
https://www.coreykupfer.com/
Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
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