Investors Can Both Do Well & Do Good in the World—Here’s How

Investors Can Both Do Well & Do Good in the World—Here’s How

3 min read
Joseph Asamoah

Joe Asamoah, MBA, Ph.D., is a leading property investment strategist. He owns an impressive real estate portfolio of over 30 single-family homes in the Washington Metropolitan area—one of the highest-priced markets in the United States.

Experience
A 30+ year industry veteran, Dr. Joe’s commitment to investing in people and properties is central to his approach toward buying and renovating neglected homes in prime locations. The majority of his properties are rented to tenants with government housing vouchers. These low-income families would otherwise be unable to live in affluent areas where Dr. Joe champions preserving neighborhood diversity.

As an involved community entrepreneur, Dr. Joe spends ample time working with new, intermediate, and seasoned investors. In this capacity, he has made significant strides toward educating diverse groups on building sustainable wealth through real estate and landlording.

In 2018, Dr. Joe formed the Legacy Investment Network, a free, community membership platform. It is composed of thousands of investors and industry professionals who have access to Dr. Joe’s expertise, relevant topics, and real estate opportunities. Through his Joint Venture (JV) Program, Dr. Joe gives participants an opportunity to learn his systems and methods as they “look over his shoulders” while he completes BRRRR projects in real-time. Dr. Joe has taught over 500 students his unique investing system—designed to build wealth by leveraging the power of cash flow and appreciation.

Dr. Joe lives in Maryland with his wife and their two children.

Press
Dr. Joe actively shares vital market advice and trend analyses on his weekly “Wealth Wednesday” Facebook and Instagram livestream events and his bi-weekly BiggerPockets livestreams. Dr. Joe had the honor of being featured on the cover of the April 2020 inaugural BiggerPockets Wealth magazine issue. He is a sought-after presenter and has been featured on numerous radio programs, speaking forums, and in major media outlets like the Washington Business Journal.

He’s been featured on podcasts such as the BiggerPockets Real Estate Podcast #356 and the Real Estate Rookie Podcast #3, and has contributed several articles to the BiggerPockets Blog.

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Recently, I was a guest on the BiggerPockets Podcast. One point that resonated with many listeners was my desire to make a positive impact on the lives of my tenants while building wealth as a BRRRR investor. This got me thinking about what our responsibility as real estate investors should be toward making the world a better place.

Last week, I met a gentleman at a local real estate investors’ meeting. He is a successful syndicator. That is, he puts together partnerships to buy apartment buildings.

This investor and I were trading ideas and experiences, and he began to tell me about a mid-level apartment complex an hour’s drive from the Washington D.C. area. He was thinking of buying it.

Of Course Investors Are in It to Make Money, But at What Cost?

He talked about how the property was under-performing. He said he had a plan to complete some improvements, and after all was said and done, he would raise the average rent from something like $850 per month to around $1,550 per month.

That sounds great, right?

investment-thinking

Related: How Giving Back Can Help You Invest in the Future

Great for him and his partners for certain… but what about the current tenants—the people who occupy the 50 or so units? What happens to them once average rents go up by over 80 percent?

When asked this question, my new investor friend simply shrugged and said, “That’s their problem and not mine. I’m in this to make money.”

Now, I don’t mean to make him sound totally callous (or even mean). He’s simply—like many investors—looking at the bottom line: his return on investment, cash-on-cash return, net operating income, etc.

Yet it got me thinking…

Can Investors Both Do Good and Do Well Financially?

In my opinion, we can. I have met many investors who, like me, believe that real estate investing is a unique vehicle. It’s unique because it’s not only a great way to make short- and long-term gains, but it also provides a way to help people.

Think about it: Not many other asset classes can do that in as direct a way as real estate investing. Buying stocks and bonds, investing in precious metals, or even funding or starting a business doesn’t have much of a socially conscious component the way real estate investing does.

How Investors Can Lift Up Others

Consider a simple fix and flip. As a flipper, your primary considerations are the purchase price, fix-up costs, holding costs, and ARV (after repair value). All of this is at the very center of the BRRRR principle, right? Buy, rehab, rent, refinance, and repeat.

Related: BiggerPockets Podcast 356: 30+ Rentals (in a Pricy Market) Through BRRRR and Section 8 with Joe Asamoah

Yet even a simple flip without the holding component offers you at least three opportunities to help others:

  1. You help the seller out of a distressed property, relieving them of a burden and putting money in their pocket.
  2. You offer work to contractors—often local guys or small operators who appreciate the opportunity and make a living from your efforts.
  3. You offer a buyer a nicely renovated home and a chance to get into something of higher quality in a good neighborhood—often at a discount.

Take it one step further, as I do. After you fix up the property, you offer it for rent.

I’m a big believer in the Section 8 program—for several reasons. First, it’s pretty much a guaranteed stream of premium rent. Every investor loves that. And second, I get the chance to help lift up a family who otherwise couldn’t afford the type of houses I provide.

These folks are looking for a new start in life, a way to get themselves out of whatever situation has dragged them down in the first place. By renting to them, I’m able to offer these families a quality home that’s safe, comfortable, and in the kind of neighborhood where they and their children can be a part of a community.

Tomeka family
Tenant move-in day

Creating a Win-Win Situation

So many Section 8 families live in typical “Section 8 houses”—houses owned by landlords who don’t give a damn about the tenants or the property. From their perspective, it’s about the money—pure and simple. They just want that big government check every month.

Well, I’m sorry, but I think that for me, there is an opportunity to do more than the bare minimum. I think we can try and help these folks.

And I’ll be honest, I’ve profited mightily from it!

The Value of Mutual Respect

You treat people with respect, and they’ll treat you and your property with respect. When you treat voucher holders this way, they tend to be very loyal and stick with you a long, long time.

As every buy and hold investor knows very well, by far the biggest expense and profit killers are turnover and vacancy costs. So, treating these tenants, who never miss a rent payment, like people has significant benefits. You’ll enjoy a far more stable stream of residual and long-term profits.

Last but certainly not least, you will do some good in this world, as well.

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Do you strive to do well financially while doing good philanthropically? How so?

Share below in the comment section.