Latest / Earn Your Leisure / Why Affordable Housing is a Hidden Gem in Real Estate Investing

Transcript

Why Affordable Housing is a Hidden Gem in Real Estate Investing · Earn Your Leisure

• 0:00
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 0:03
  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
• 0:07
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 0:11
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 0:15
  Speaker 1: some of the heinous migrant criminals caught because of President
• 0:19
  Speaker 1: Donald J.
• 0:20
  Speaker 2: Trump's leadership.
• 0:21
  Speaker 1: I'm Christy nom the United States Secretary of Homeland Security.
• 0:25
  Speaker 1: Under President Trump, attempted illegal border crossings are at the
• 0:29
  Speaker 1: lowest levels ever recorded, and over one hundred thousand illegal
• 0:33
  Speaker 1: aliens have been arrested. If you are here illegally, your
• 0:37
  Speaker 1: next you will be fined nearly one thousand dollars a day, imprisoned,
• 0:41
  Speaker 1: and deported.
• 0:42
  Speaker 2: You will never return.
• 0:44
  Speaker 1: But if you register using our CBP home app and
• 0:47
  Speaker 1: leave now, you could be allowed to return legally.
• 0:50
  Speaker 2: Do what's right. Leave now.
• 0:53
  Speaker 1: Under President Trump, America's laws, border and families will.
• 0:57
  Speaker 3: Be protected sponsored by the United States Department of Homeland Security.
• 1:00
  Speaker 4: So let me ask you this, because but you're still
• 1:03
  Speaker 4: a business man and you're in it to make money, right,
• 1:05
  Speaker 4: So when you're doing these projects and fifty of the
• 1:10
  Speaker 4: housing is going to low or middle income or you
• 1:14
  Speaker 4: just talked about where you can buy and it is
• 1:16
  Speaker 4: based off of your income, So how are you making
• 1:19
  Speaker 4: money off of this? The city gives you subsidies to
• 1:24
  Speaker 4: subsidize the price. So like if somebody should be paying
• 1:27
  Speaker 4: four thousand but they're only paying one thousand, is the
• 1:30
  Speaker 4: city subsidized three thousand dollars?
• 1:32
  Speaker 5: Absolutely?
• 1:32
  Speaker 3: So what will happened is there's two types of substis
• 1:35
  Speaker 3: capital subsidy and there's rental subsidy. So so capital subsidy
• 1:39
  Speaker 3: works like this, like, you know, we're doing the development
• 1:43
  Speaker 3: and it costs ten million to do the development, right,
• 1:47
  Speaker 3: but that development can only support six million of debt
• 1:52
  Speaker 3: or six million of capital because of the depressed costs.
• 1:55
  Speaker 5: The city's going to put in the additional subsidy. It's
• 1:57
  Speaker 5: a very simplistic way to look at it.
• 1:58
  Speaker 3: That's kind of how it works and how we get
• 2:00
  Speaker 3: paid is when you create that that budget, our fee
• 2:04
  Speaker 3: is part of the budget. So it's like it's right,
• 2:06
  Speaker 3: it's baked right in.
• 2:07
  Speaker 4: So it's like a building costs ten million, you have
• 2:10
  Speaker 4: six million. The city will put the other four million
• 2:13
  Speaker 4: in for you. But for them pointing four million in
• 2:16
  Speaker 4: for you, they're gonna say we need thirty percent of
• 2:18
  Speaker 4: the market rate. So then the math it works out.
• 2:21
  Speaker 4: It's kind of like an even exchange all lost. That's right, right,
• 2:23
  Speaker 4: right right.
• 2:24
  Speaker 5: They subsidized the city has to subsidize.
• 2:27
  Speaker 3: The building and the operations of affordable housing because otherwise
• 2:31
  Speaker 3: it wouldn't work.
• 2:32
  Speaker 4: What's the what how much do you need to have
• 2:34
  Speaker 4: an affordable housing building? Like like a percentage?
• 2:38
  Speaker 5: I mean, we do some.
• 2:38
  Speaker 3: We have a building that we're bringing to market right
• 2:40
  Speaker 3: now in the Bronx on Union Avenues, to ninety five
• 2:43
  Speaker 3: unit building.
• 2:44
  Speaker 5: It's one hundred percent affordable.
• 2:46
  Speaker 3: But that was done from the genesis with the city
• 2:49
  Speaker 3: with the intention of doing an affordable housing building. And
• 2:52
  Speaker 3: by the way, that's also a joint venture with the church,
• 2:55
  Speaker 3: where we did a deal.
• 2:56
  Speaker 5: With the church.
• 2:57
  Speaker 3: They owned the land and they had aspirations. I mean,
• 3:00
  Speaker 3: it's a really good, really nice church. They had aspirations
• 3:03
  Speaker 3: to stay there.
• 3:05
  Speaker 5: They wanted a new church facility.
• 3:07
  Speaker 3: And you know a lot of their members have passed
• 3:11
  Speaker 3: away or retired, moved away, and the congregation dwindled. So
• 3:17
  Speaker 3: when we were introduced to them, we had an idea, Listen,
• 3:19
  Speaker 3: let's work out an affordable housing deal. We brought them
• 3:21
  Speaker 3: into the partnership where they are thirty percent owner as well,
• 3:24
  Speaker 3: and they get a new church facility. But all that
• 3:27
  Speaker 3: was done under one budget that includes a developer fee.
• 3:31
  Speaker 3: So we're able to do you know, do good help
• 3:33
  Speaker 3: this church create affordable housing, but we made money by
• 3:36
  Speaker 3: doing it too.
• 3:36
  Speaker 5: That literally is what's happened to my church in the Michelle.
• 3:39
  Speaker 6: We're going to be on the bottom floor, there'll be
• 3:42
  Speaker 6: retail space, but they you know, there's going to be
• 3:44
  Speaker 6: a tower above it. You said something about, yeah, we
• 3:48
  Speaker 6: will sleep for a while, but now we need to
• 3:49
  Speaker 6: be woken. Part of it is seeing people like you,
• 3:51
  Speaker 6: but we need to see more people like you. And
• 3:53
  Speaker 6: I know you're on the board for the New York
• 3:56
  Speaker 6: Real Estate direct So can you talk about your role
• 4:01
  Speaker 6: and the importance that that organization plays in that process
• 4:05
  Speaker 6: of developing more developers that look like us?
• 4:07
  Speaker 3: Yeah, I mean so, NYREK is the New York Real
• 4:10
  Speaker 3: Estate Chamber. It is the leading advocacy group for all
• 4:14
  Speaker 3: the diverse developers in New York State. So if you're
• 4:17
  Speaker 3: you know, anyone doing any project of scale, and note
• 4:20
  Speaker 3: that's a black or brown developer. Female developers is a
• 4:23
  Speaker 3: member of this organization, and you know, thirty years ago
• 4:29
  Speaker 3: you wouldn't see anybody like us doing real estate right.
• 4:32
  Speaker 3: It has just been a very undiverse industry, no diversity.
• 4:37
  Speaker 3: And so I'm on the board. I'm actually chairman of
• 4:40
  Speaker 3: the board. Cheryl McKissick is a board member with me.
• 4:42
  Speaker 3: Don Peeples is a board member with me. But we
• 4:44
  Speaker 3: have a bunch of other board members and developers that
• 4:48
  Speaker 3: are for profit and not for profits, but we all
• 4:51
  Speaker 3: work towards the same thing, to increase access to economic
• 4:55
  Speaker 3: opportunity and capital for diverse developers. And we've been making
• 4:59
  Speaker 3: a lot.
• 5:02
  Speaker 6: Erners.
• 5:02
  Speaker 5: What's up.
• 5:02
  Speaker 6: You ever walk into a small business and everything just
• 5:05
  Speaker 6: works like the checkout is fast, the receipts are digital,
• 5:09
  Speaker 6: tipping is a breeze, and you're out the door before
• 5:12
  Speaker 6: the line even builds odds are they're using Square. We
• 5:16
  Speaker 6: love supporting businesses that run on Square because it just
• 5:19
  Speaker 6: feels seamless. Whether it's a local coffee shop, a vendor
• 5:22
  Speaker 6: at a pop up market, or even one of our
• 5:24
  Speaker 6: merch partners. Square makes it easy for them to take payments,
• 5:28
  Speaker 6: manage inventory, and run their business with confidence, all from
• 5:32
  Speaker 6: one simple system. If you're a business owner, or even
• 5:35
  Speaker 6: just thinking about launching something soon.
• 5:38
  Speaker 5: Square is hands.
• 5:39
  Speaker 6: Down one of the best tools out there to help
• 5:41
  Speaker 6: you start, run, and grow. It's not just about payments,
• 5:45
  Speaker 6: it's about giving you time back so you can focus
• 5:47
  Speaker 6: on what matters most ready. To see how Square can
• 5:50
  Speaker 6: transform your business, visit Square dot com backslash, go backslash
• 5:55
  Speaker 6: eyl to learn more that Square dot com backslash, go
• 6:00
  Speaker 6: backslash eyl. Don't wait, don't hesitate. Let's Square handle the
• 6:04
  Speaker 6: back end so you can keep pushing your vision forward.
• 6:10
  Speaker 6: This episode is brought to you by P and C Bank.
• 6:13
  Speaker 6: A lot of people think podcasts about work are boring,
• 6:16
  Speaker 6: and sure they definitely can be, but understanding a professionals
• 6:20
  Speaker 6: routine shows us how they achieve their success little by little,
• 6:23
  Speaker 6: day after day. It's like banking with P and C Bank.
• 6:27
  Speaker 6: It might seem boring to save, plan and make calculated
• 6:30
  Speaker 6: decisions with your bank, but keeping your money boring is
• 6:33
  Speaker 6: what helps you live a more happily fulfilled life. P
• 6:37
  Speaker 6: and C Bank Brilliantly Boring since eighteen sixty five. Brilliantly
• 6:42
  Speaker 6: Boring since eighteen sixty five is a service mark of
• 6:44
  Speaker 6: the PNC Financial Service Group, Inc. P and C Bank
• 6:48
  Speaker 6: National Association member FDIC.
• 6:52
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 6:56
  Speaker 1: in Massachusetts. An MS thirteen gang member from El Salvador
• 7:00
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 7:04
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 7:08
  Speaker 1: some of the heinous migrant criminals caught because of President
• 7:12
  Speaker 1: Donald J.
• 7:12
  Speaker 2: Trump's leadership.
• 7:13
  Speaker 1: I'm Christy Noman, the United States Secretary of Homeland Security.
• 7:17
  Speaker 1: Under President Trump, attempted illegal border crossings are at the
• 7:21
  Speaker 1: lowest levels ever recorded, and over one hundred thousand illegal aliens.
• 7:26
  Speaker 2: Have been arrested.
• 7:27
  Speaker 1: If you are here illegally, your next you will be
• 7:30
  Speaker 1: fined nearly one thousand dollars a day, imprisoned, and deported.
• 7:35
  Speaker 2: You will never return.
• 7:36
  Speaker 1: But if you register using our CBP home app and
• 7:39
  Speaker 1: leave now, you could be allowed to return legally.
• 7:42
  Speaker 2: Do what's right. Leave now.
• 7:45
  Speaker 1: Under President Trump, America's laws, border and families will be protected.
• 7:50
  Speaker 3: Sponsored by the United States Department of Homeland Security, We've
• 7:52
  Speaker 3: been i think achieving a lot of success. We are
• 7:55
  Speaker 3: looking to recruit and bring as many folks who are
• 7:59
  Speaker 3: interested in real estate development into the fold as possible
• 8:02
  Speaker 3: because of the knowledge that we have has to be shared.
• 8:04
  Speaker 3: It's the only way we're going to grow our ranks, right,
• 8:07
  Speaker 3: and I like to borrow, you know, rubric from our
• 8:11
  Speaker 3: Jewish brothers and sisters. I see so much collaboration in synagogues.
• 8:15
  Speaker 3: You go to any Synegague unit, see five or ten
• 8:17
  Speaker 3: businessmen who work together. And we try and do the
• 8:20
  Speaker 3: same thing. Don Peebles always says, you know, when he
• 8:22
  Speaker 3: sees another black developer, he doesn't see a competitor, he
• 8:26
  Speaker 3: sees a potential partner. And that's how you know, we
• 8:28
  Speaker 3: look at it. In Iraq, we are doing a lot
• 8:30
  Speaker 3: of deals that are larger because we collaborate with each other,
• 8:35
  Speaker 3: like Affirmation Tower, you know, the People's Organization, my company,
• 8:41
  Speaker 3: the Bolstero in Atlanta and Third and Urban one an
• 8:46
  Speaker 3: RFP last month to develop a huge site next to
• 8:50
  Speaker 3: Microsoft's ninety acre campus.
• 8:53
  Speaker 5: Right.
• 8:54
  Speaker 3: It's just going to be you know, one point two
• 8:55
  Speaker 3: million square feet that will develop, which will consist of
• 8:58
  Speaker 3: four hundred and ninety five units of houses, an office building,
• 9:03
  Speaker 3: and a hotel. That's going to be done right at
• 9:06
  Speaker 3: the bank Head train station. We're going to build a
• 9:08
  Speaker 3: platform over transition in Atlanta and go vertical, and we're
• 9:11
  Speaker 3: getting busy in Atlanta anyway. We love that market. We
• 9:14
  Speaker 3: want to do as much as possible so growing markets flourishing.
• 9:17
  Speaker 3: The government is super supportive of these types.
• 9:20
  Speaker 5: Of public private partnerships.
• 9:21
  Speaker 3: They're aware of developing assets in an economically diverse way,
• 9:27
  Speaker 3: so that we could create some affordable housing in combination
• 9:30
  Speaker 3: with commercial and market rate development just makes a lot
• 9:34
  Speaker 3: of sense. So collaborating together allowed us to win that.
• 9:38
  Speaker 3: And there's we have a lot of instances even amongst
• 9:40
  Speaker 3: other direct members where you know, other members have collaborated
• 9:44
  Speaker 3: or winning There's a there's a you know, group one,
• 9:47
  Speaker 3: a great project up in Boston associated with a train
• 9:50
  Speaker 3: station not not too long ago. They're winning deals with NISCHE,
• 9:54
  Speaker 3: the New York City Housing Authority, where we have our
• 9:56
  Speaker 3: members taken down you know, five six, seven, eight hundred
• 9:59
  Speaker 3: unit that they're going to renovate and put back into
• 10:03
  Speaker 3: service and help improve the overall physical condition of those
• 10:08
  Speaker 3: buildings that they've been so dilapidated for so long. But again,
• 10:12
  Speaker 3: this is all being done through collaboration. So we want
• 10:15
  Speaker 3: to work with as many folks who are interested in
• 10:18
  Speaker 3: real estate development and we welcome people into the fold,
• 10:21
  Speaker 3: and we want to grow our ranks.
• 10:23
  Speaker 6: It sounds like you have almost right if you're talking
• 10:26
  Speaker 6: about Iraq, that's obviously here in New York, but working
• 10:29
  Speaker 6: in Boston, having development in Atlanta, you're working with other
• 10:32
  Speaker 6: municipalities domestically. Is there one or is there thoughts of
• 10:36
  Speaker 6: this creating one that can create on a national level?
• 10:39
  Speaker 5: We'd love to, man.
• 10:40
  Speaker 3: I mean, I think when you look at what's happening again,
• 10:42
  Speaker 3: that seven million unit housing opportunity, right, I would like
• 10:46
  Speaker 3: to see a lot of minorities and women take advantage
• 10:50
  Speaker 3: of it, right nationally, So I look at direct as
• 10:53
  Speaker 3: being a model what can happen through collaboration. There's also
• 10:57
  Speaker 3: a lot of advocacy that we do with elected officials, right.
• 11:02
  Speaker 3: We have to spend a lot of time with not
• 11:04
  Speaker 3: only elected officials, but government agencies on the state, federal,
• 11:08
  Speaker 3: sometimes in city level, trying to make sure economic opportunity
• 11:12
  Speaker 3: is awarded fairly because for a long time, you know,
• 11:16
  Speaker 3: we were persona non grata. There was nothing coming to us.
• 11:19
  Speaker 3: And it's a shame because you have in most urban environments,
• 11:24
  Speaker 3: in most cities around the country, no mayor gets elected
• 11:28
  Speaker 3: without the black vote. So we're going to put people
• 11:31
  Speaker 3: in office to make sure we get in a piece
• 11:33
  Speaker 3: of economic pie. So we'd love to take Iraq or
• 11:36
  Speaker 3: an organization like Iraq nationally and have the same type
• 11:40
  Speaker 3: of contract and the same type of mechanisms we use
• 11:44
  Speaker 3: here replicated around the country.
• 11:53
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 11:56
  Speaker 1: in Massachusetts. An MS thirteen gang member from El Salvador
• 12:01
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 12:05
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 12:09
  Speaker 1: some of the heinous migrant criminals caught because of President
• 12:13
  Speaker 1: Donald J.
• 12:13
  Speaker 2: Trump's leadership.
• 12:14
  Speaker 1: I'm Christy Noman, the United States Secretary of Homeland Security.
• 12:18
  Speaker 1: Under President Trump, attempted illegal border crossings are at the
• 12:22
  Speaker 1: lowest levels ever recorded, and over one hundred thousand illegal aliens.
• 12:26
  Speaker 2: Have been arrested.
• 12:27
  Speaker 1: If you are here illegally, your next you will be
• 12:31
  Speaker 1: fined nearly one thousand dollars a day, imprisoned, and deported.
• 12:35
  Speaker 2: You will never return.
• 12:37
  Speaker 1: But if you register using our CBP home app and
• 12:40
  Speaker 1: leave now, you could be allowed to return legally.
• 12:43
  Speaker 2: Do what's right. Leave now.
• 12:46
  Speaker 1: Under President Trump, America's laws, border and families will be protected.
• 12:51
  Speaker 5: Sponsored by the United States Department of Homeland Security,