Commercial PropertyRebuilding Neighborhoods For Fun, Profit And Community Satisfaction
Is it possible to be altruistic and profit-motivated at the same time? One California CEO believes so.
She heads a California investment group with a unique idea - to invest in homes in distressed neighborhoods by helping the neighbors spruce their homes up, too.
Affinity Neighborhoods began in 1996 when David Frayne encouraged friends and family to purchase and improve houses in an Oakland neighborhood for investment. His idea was that if they all improved their homes at the same time, the values would go up.
The idea worked, as all the homes have either sold or are in contract to sell for about twice what each investor paid.
Just to make sure the profitable idea wasn"t a fluke, the group teamed up again to transform a neighborhood in Long Beach, and saw another jump in their property values.
Ingrid Johanns, one of the original investors became CEO of the "real business," Affinity Neighborhoods. Today, the firm buys properties funded through its private investment funds such as its Affinity Neighborhoods, LLC and Leonardo, LLC. Affinity Neighborhoods has 22 investors, 31 properties, and about $1.7 million invested in about $7.8 million in real estate, according to a recent CNN article about the company. Investors can jump in for $50,000 and are required to have either $200,000 in income or a net worth of $1 million.
"In a nutshell, we are successful real estate investors who not only fix up houses, but we also fix up whole neighborhoods," explains Johanns. "We go into areas with high crime, buy property, and then work with nonprofits and residents to transform the neighborhood while we work on fixing our houses."
The company works by holding large neighborhood improvement events, which includes the investors and neighbor volunteers.
"They"re very inspiring events," says Johanns. "Lots of neighbors and kids come out and join us. We generally have about 50 volunteers show up. We pick up trash, plant trees, paint houses and fix fences on a block in one of these distressed neighborhoods."
While it"s nice to make money, Johanns also enjoys the satisfaction of making a difference, too.
"One little 7-year-old boy said to me last weekend while we were planting flowers together," says Johanns, ""Wow - this is more fun than playing video games!""
That made Johanns laugh. "I thought so, too, " she says. "It"s incredible what a little possibility does to a neighborhood."
She says, "We believe it"s possible to transform all high-crime neighborhoods into beautiful communities."