When Peter J. Burns III started Burn$ Funding last year, the idea was to help existing and would-be entrepreneurs raise capital in non-conventional ways by utilizing credit repair, bridge loan, cost segregation, and shelf corporation acquisition tools, to name a few.
Earlier this week, Burns added a new division that will serve as an outlet for Burn$ Funding clients, as well as outside investors. In Luxury Group Homes, Burns has tapped into a growing trend in eldercare around group homes. But with a twist.
“We’re increasingly seeing a movement where the elderly are being placed in group homes, rather than nursing homes or assisted living complexes,” said Burns. “In Maricopa County (Phoenix) alone, there are 2,000 group homes. There’s a reason for this. Society recognizes that this is a better, more humane approach than moving our parents into an institutionalized setting, such as an assisted living complex, or nursing home.
“At the same time, there are very few group homes for the more affluent members of society. Going from a wealthy environment to a traditional group home can be as shocking as going to an institutionalized environment. This is where Luxury Group Homes comes in. We have purchased and will continue to purchase mansions, and retrofit these mansions so they are compatible for the elderly. Each home will have live-in staff and a chef.”
The concept, born last month, has taken off. Burns Funding has already attracted an investment group for the first few homes, led by Dr. Cliff Janke, an emergency room physician and commercial real estate investor.
“I’ve been investing in traditional rental properties for a decade,” said Dr. Janke. “When I crossed paths with Peter, I immediately recognized the opportunity he is tapping into. I expect that we will be the first of many investors into these projects. Peter has really laid the foundation for a very lucrative business that satisfies one of society’s most basic needs.”
The first pillar of that “foundation” that Dr. Janke alluded to is Phoenix builder Tim Hurst. When Burns sold a mansion that he owned several years ago, he realized how difficult it is to sell such properties, which he calls “white elephants.” Flash forward to early June of the year, and Hurst mentioned in passing to Burns, who is now based in Southern California, that his old mansion was up for sale. The wheels started turning, especially when Hurst, who has a half-century of experience in the construction business, told Burns about his current business model – buying homes and retrofitting them so they can be flipped to group home buyers and operators.
The idea for Luxury Group Homes was born.
Burns was further emboldened after he did his due diligence. Among the things he learned was that the case law is clear; the Fair Housing Act and other federal laws prevent homeowners’ associations from challenging the creation of group homes in any community, as summarized in a legal white-paper on the division’s website. He has since assembled an operational team. Burns, armed with historical proformas that demonstrate the potential profitability of his new division, has secured additional funding sources. He is now targeting other properties.
“Our elderly do not have to be institutionalized as they transition,” said Burns. “The group home concept is an incredible idea whose time has come. Why can’t we take these hard to sell mansions and convert them into luxury group homes? There are thousands of sons and daughters out there who are wealthy enough to make the last years of their parents’ lives more comfortable than they would be at an institution.”
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