Real Estate
Part of City Capital’s vision includes initiatives to create affordable housing for working-class families by utilizing and creating unique opportunities for “Socially-Conscious Investing To Empower Urban Communities.” This market is severely underserved, with some estimates showing as much as 15-year backlogs of homes the average blue collar family can afford.
As a result of their national Urban Wealth Tour and the high regard CEO Ephren W. Taylor II has in the national affordable housing picture, City Capital is often requested to come into a city and effect “community renaissance.” The company’s team meets and establishes relationships with government and community leaders, economic development groups, community development corporations (often owned by churches or other non-profits), contractors, property managers, financial sources and other service providers. Together we identify target areas for revitalization, convenient to local businesses and shopping, business districts and corporate headquarters, and public transportation. The company negotiates available incentives such as property tax abatements, infrastructure improvements, block grants and other resources with city and community leaders. We also look for good, family recreational facilities such as parks and swimming pools, and select local programs to support, such as new homeowner training and at-risk youth programs.
City Capital puts as much as 40% of their profits back into the communities themselves in the form of programs such as these and other community initiatives. The company’s practical development and redevelopment programs employ local solutions, and return significant amounts of profit to the local communities. City Capital consistently delivers, and has been called a “Proven Market Maker.” By literally “creating their own markets,” the company also generates significant returns for its cash and credit investors.
Private real estate investors naturally look only at how much profit they can make from individual home purchases, and not a long-term, bigger picture of community change. City Capital believes that a for-profit corporation can and should do the kind of work that non-profits do, and that corporate profits along with individual client-investor dollars, can allow this on a much larger scale. Only by going in with the intention of completing dozens and dozens of quality, affordable homes for blue-collar, hard-working families, can an area undergo a true “community renaissance.”
Our client-investors are “Project Investors,” using cash, self-directed IRA or rollover funds to participate directly in large-scale projects on a profit-sharing basis per project. Each client is established in their own Limited Liability Company, retaining full control over their funding and participation decisions. Projects are acquired at a deep discount, often directly from city, state or municipal government partners, and the company completes the renovation or development before reselling at a higher market value (or operating it at a profit). Investors may also direct a portion or all of their profits in a project go to their local church or favorite charity.
Another way we accomplish our Community Renaissance objectives is through our national Credit-Investor program.
Originally created in 1999 as an alternative program exclusively for the company’s client-investors, the program has gone through many changes and adaptations. It was originally merely a credit version of the company’s cash and rollover investing programs, with splits of profits. In 2006, the program was modified to make it available for any qualified investor with at least a 700 FICO score and $70,000 household income. Credit-Investors are matched with fully-renovated properties within our Community Renaissance Initiative Areas around the country.
No upfront cash is required, and each property has 15-20% immediate equity and is fully owned by the Credit-Investor at closing. In addition, a qualified tenant is provided, assuring cash-flow from the beginning, and the mortgage payment is guaranteed for the first full year if it’s vacant any month. And, the Credit-Investor keeps 100% of the net rental and net resale profits.
The company makes sure each home is renovated to our stringent guidelines. These include items such as new plumbing, green improvements such as new energy efficient furnaces or heat pumps water heaters and appliances, and energy-saving double-pane windows and insulated steel doors. Whatever needs to be done is done, depending upon the area and home, to make it right from day one for Credit-Investors, tenant families, and ultimate homeowners.
The value of the home is based on the independent lender’s appraisal process. Individual investors alone, without any baseline community or local government support or incentives, cannot create the kind of positive community changes required to sustain positive market changes. There is no crystal ball as to future value of a particular property, but only a master plan approach such as this can effect the kind of dramatic changes described. Everything possible is done to ensure that, at resale, Credit-Investors have a piece of a much bigger vision, and get to share in the profits of our overall success along with the community and families involved. And then do it again. And again. And again.
