Photo: Suchat Pederson, The News Journal. Delaware Online
Sitting on the conjoined staircase that leads to the porches outside of two abandoned homes on E. 17th Street in Wilmington, Joel Amin Jr., Bryce Fender and Demetrius Thorn shared their big dream.
The 20-year-olds chose this area to highlight the growing problem facing the city as vacant properties bring wooden boards to blocks throughout Wilmington.
This specific block had five vacancies, a small fraction of the 1,700 or so houses in Wilmington that remain without residents.
Their dream, through their company WilmInvest: Buy distressed properties, renovate them and lease them out as supportive housing. They describe it as “social impact real estate investing.”
The trio, area natives who first met at Conrad Schools of Science, spent the summer working on their venture as entrepreneurs in the University of Delaware’s Horn Entrepreneurship Summer Founders Program. Amin and Fender are both UD students while Thorn attends the Wharton School of the University of Pennsylvania.
Students in the program were encouraged to identify a problem, get out in the field and research, then come up with an applicable solution.
For WilmInvest, that means building relationships with government and social agencies.
“We noticed there was a disconnect between the government, community organizations, and the private sector,” Fender said.
WilmInvest is hoping to be a bridge, and the trio thinks it will be able to turn the idea into a booming business in which all parties win.
The three all have different roles. Amin’s background working with his father’s plumbing business has him focused on the renovation aspect. Thorn, whose focus in college is in finance and real estate, is the lead on acquiring the properties. Fender will take on the role of working with social service organizations to put tenants in units.
Right now, they’re still in the fundraising stages. They have one property on 6th Street, which only Amin has equity in through his father, and are hoping to secure funding by the end of 2017 to help launch their business.
“We’re at the point where we’re looking at where we can make a significant impact that people will notice,” Thorn said. “You do that by buying five properties, fixing them up and putting people in these homes.”
Those five houses would mean 15 bodies into homes.
“When those people don’t have housing, they’re costing money to the average person through being in ERs (emergency rooms), homeless shelters, incarceration,” Amin said.
Their overall business model isn’t very complex. Money from investors, grants or other government funding would be used to purchase the distressed properties, which average around $20,000. The renovation portion involves working with contractors and social groups like Two Fish Home Renovations, a company that works with formerly incarcerated young adults to teach them a trade and give them initial employment.
In terms of leasing, WilmInvest hopes to work with groups like the Sunday Breakfast Mission, Horizon House, Connection Community Support Programs and others to find tenants and build rental agreements.
The difference between WilmInvest and, say, Habitat for Humanity, is simply the potential for profits.
“We are not a nonprofit by any means,” Thorn said. “We have a substantial social mission. What we’re doing without a doubt has a significant social impact. We can attract investors that are going after significant returns.”
First, they need to get in a position to do so.
On Thursday, Gov. Carney signed House Bills 187 and 188. The bills allow local governments to both pre-qualify bidders at sheriff’s sales and also place a lien on a vacant property in violation of maintenance standards to recoup enforcement and abatement costs.
Amin called on the city’s land bank program, one of many across the country that acquires and converts tax-foreclosed properties into productive use. He said the city had an “obligation” to work with the startup community and young persons at places like UD to bring a younger group and perspective into the future of Wilmington.
“It’s our time to have some skin in the game,” Amin said.
WilmInvest hopes to be positioned and has an active portfolio when and if the city finally kicks its land bank program into gear and distributes properties to responsible owners.
WilmInvest is the third venture the trio has tried to produce. The others included a crowdfunding real estate platform to allow everyday people to invest in real estate projects.
What makes this one seem different?
“It feels way more real. It’s tangible,” Fender said.