How Modular Construction is Changing New York City Real Estate
Brownstone NYC is building 30 homes using Modular Construction in 2023
Modular Construction is a common technique used in home construction. However, today’s need for more affordable housing has led to a revolutionary way to build and renovate existing homes with environmentally sustainable construction. Brownstone NYC has been at the forefront of the push for modular buildings as a part of Joint Venture initiatives to bring affordable housing to New York City and throughout New York State.
Modular construction involves building parts of the building or the entire project off site before transport to the final location to be put together. Many construction delays and budget increases are related to construction, weather and other factors which can be better controlled in a warehouse or off site facility. By keeping the development in a single location, manufactured homes can be built to suit and then transported for final assembly.
Using modular technology allows projects to be built efficiently thanks to the material, process and sustainable operations. Segments can be joined for faster development and streamlined inspection. This allows for a much faster turnaround time allowing many projects to be completed in only 60% of the time a traditional build requires.
In Westchester County, New York, Brownstone NYC has entered into a joint venture with developers to build affordable homes using Modular and Green technologies. As equity partners we will participate in four separate projects that will build 40 homes in Westchester over the next 24 months.
The New York Green Housing Development project will focus on our ability to protect the environment and integrate new technologies to enhance quality of life and reduce our carbon footprint. The project has taken into consideration the plans from the Westchester County Climate Change Action Plan. We are excited to demonstrate the building capacity that reduces our carbon footprint using energy efficient technologies.
The focus on energy efficiency and quality of life is evident in many new home designs where quality of life and accessibility to convenient features that offer a healthy lifestyle. These considerations are active in the Fleetwood Neighborhood of Mount Vernon, where Brownstone is creating a neighborhood with 17 homes. The housing development will include solar technologies and electric car chargers. As a green project New Construction in Mount Vernon changing neighborhood & bringing new housing stock to the market.
Across the county, Brownstone NYC is actively building Devonia Estates in a partnership with minority property developer, Frank Mercado. Frank has successfully built several projects in the NYC area and throughout Westchester County. These projects are in an affluent neighborhood on the south side of Mt. Vernon. As a partnership, he project has recently completed excavation as seen in the picture below.
A final project is South 7th in White Plains NY. This project will complete Eight homes in 2023.
All of these projects are using Modular and Green Technologies.
Our focus on sustainable building and green impact is prominent throughout the development process from the initial design through when the owner moves in.
Some common Green Building methods are:
Using natural products for exterior and interior building materials
Opening up buildings to use natural light
Using the latest energy efficiencies
Recycling water from rain and condensation for building needs
Creating “green” roofs through plantings and vegetation
The opportunities for improving sustainability are limitless. Today’s improvements in pricing and sourcing has made green building methods are
Brownstone NYC is a proud minority developer in New York. We have partnered with other minority developers as an outcome from our completion of the LISC NYC Minority Developer Program. Our sustainability focus is a pathway to creating more homes and providing more meaningful impact in the communities we serve.
The Federal Reserve has raised interest rates in 2022 increasing mortgage rates to an average of 6.83% as of October 7th, 2022. This increase in interest rates is putting pressure on buyers as the higher cost of financing requires home prices to fall. While lower home prices may seem like an excellent opportunity for buyers who have been marginalized to enter the market, it also raises concerns among investors who own the asset class. At Brownstone NYC our mission is to increase Generational Equity through home ownership. This is achieved through creating value in gentrifying neighborhoods among underserved homeowners and underrepresented investors. We often partner with homeowners who don’t have the ability, expertise or resources to leverage increasing home prices. These homeowners typically have lived in minority dominant neighborhoods for decades. Their homes usually need renovation in order to maximize their sales price. Many times, the homes are a fraction of the potential value that may be attained with proper development and air rights. By partnering with Brownstone NYC, homeowners receive a customized solution that can help solve financing, development or acquisition challenges. Brownstone NYC’s vertically integrated business model preserves the value throughout the transaction and shares it with the homeowner. This solution has proven to be overwhelmingly valuable for homeowners and investors alike. Brownstone NYC begins by assessing the property value, analyzing the exit options and renovation or development costs. This information is presented to the homeowners to provide them with options to maximize the sale price based on their needs. This alternative to selling the property as is, allows the homeowners to leverage their property’s potential. Usually, Brownstone NYC can provide immediate liquidity to meet short term financing needs and allow the homeowner to maintain ownership of the property while it is developed. Rising interest rates have caused many home buyers to settle for a property with a lower price tag. It is also causing homeowners to re-evaluate their selling price to be more competitive in the market. In contrast with the sellers market of 2020 – 2021, many property listings have gone without a bid due to mispricing based on present market conditions. Lower home prices have changed the cap rates for investors. While real estate has historically been a great hedge for inflation, investors have been reluctant to commit large amounts of capital to the asset class due to fear of prices continuing to decline. Additional concerns exist for liquidity as investors prioritize ease of access to capital over capital appreciation. While the market has no shortage of concerns about the number of issues at hand due to the rising interest rates, experienced investors understand the value of the opportunity available. Difficult market conditions separate the professionals from the amateurs. Having successfully navigated the 2008 market crisis and the Covid Pandemic, Brownstone NYC has the relationships and experience to add value for homeowners and investors. Backed by a 16 year track record, our vertically integrated business has established Acquisition, Renovation, Real Estate Brokerage and Property Management operations. Our distinct mission of creating generational wealth among underserved communities has helped create partnerships with some of the leading companies in the New York real estate industry and throughout the world. Having a network of international investors has given us access to capital from investors from many countries like Lebanon or Turkey who have seen their currencies lose 50% or more value in 2022 alone. This steady stream of capital has allowed us to continue to purchase properties in all market conditions and employ a team of professionals who live in the neighborhoods where our investments are located. While prices may fall 10 – 25% throughout the boroughs of New York City before reaching a bottom, history has shown that there will always be demand for housing due to the robust business environment. Even during the 1970s when inflation rivaled the rates seen today, real estate prices appreciated due to strong demand. A strong labor market creates demand for affordable housing. Brownstone NYC has the privilege of creating new homes and making them affordable by developing single family homes into multi-family condos. Home prices may dip temporarily, but the drop in home prices may be a buying opportunity of a lifetime. When the Federal Reserve reverses course and begins to drop rates, capital will flock to real assets as an inflation hedge. The property portfolios of Brownstone NYC have seen double digit returns for investors in tight markets and are expected to increase as our acquisition cost drops due to a short term market adjustment. Investors are encouraged to review the Brownstone NYC Investment without Displacement model to learn how we are serving investors with collateral backed assets that can appreciate in a rising interest rate environment. Our vertically integrated model allows investors to choose a return based on their investment duration (how long until they need the money back) and risk tolerance. While we expect many news stories highlighting the challenging economic environment, we are sure that we will continue to serve our communities, homeowners and investors. The fear of the unknown is typically felt by those who lack understanding of the options available. With over 100 years of combined experience on the Brownstone team, these markets are where our investors have the opportunity to compound their returns and create a legacy for generations to come. For more information about working with us please visit https://brownstonenyc.com
My name is Shelton Assoumou. I created Brownstone NYC over seven years ago, which is basically a family owned business that was started by my mother and initially funded by her. Over the past eight years, we’ve acquired over a hundred properties, totaling over $50 million of sales.
So Brownstone NYC started as just one house that we acquired in 2014 just to figure out how things worked. We knew that things were happening in Brooklyn and we were trying to figure out a way to participate in this opportunity.
My mother actually cashed out her 401k because she was really bullish on the Brooklyn values at that time.
Looking back on the analysis of that property’s values which has already doubled over the years since her first call. Over the years, we have acquired over a hundred properties. Now, the interesting thing about Brownstone is that over the last 24 months, we really have morphed into a social impact investing firm whereby we care about the community. Our faces is to make sure that on the deals that we are acquire, the homeowner is always gonna benefit as a partner. Um, we have a situation for example, on 26 Pulaski where the homeowner has owned the prop, he’s living the property for over 40 years. Um, he’s own the property for 40 years. Um, his property fell into foreclosure and, uh, the bank is about to steal his prop or to take his property to foreclosure.
How Joint Ventures Help Home Owners
I’m Rodney Dees. I’m here resident for 40 years. My family from, the great place in Charleston, South Carolina right here in Brooklyn right now, but we’ve been in the city here for about 50, 55 years. I was in foreclosure and, I had enough equity in my house to make moves with it. With the equity we came together most recently to do something incredible, which is save our homes, basically.
Properties that are currently a stick frame house with only 1500 square feet, we’re gonna add 2,400 square feet to the house. And this gentleman is gonna end up with a million dollars of equity in his house.
This is really truth to the matter. There’s so many of us losing homes because of misinformation and disinformation right now.
So that’s how that magic happens.
The magic happens by knowing that foreclosure is not the end. If you have some type of equity in your property you have options available to you. Schelton Assoumou Tweet
Creating Win Win Options for Investors & Homeowners
That is the example of an investment that we do that is a win-win situation with both the homeowner and Brownstone that has yielded a lot of reference and value. Because again, we care about our relationships and our reputation, the reputation leads to new transactions, and we are here to stay. We live in the community. We speak the native languages of these homeowners. You are in Costa Rica or Cuba. That’s fine because we can help you find a house in Brooklyn and the Bronx and tailor it to your desire. | That’s because a lot of these homes have unused air rights where we can add one floor, two floors to the property. For example, in, Bedford Stuyvesant or in Crown Heights, values have gone up so much that there’s no more land and being able to efficiently capitalize on these air rights is very valuable for the homeowners, but also for the community. We have a few innovative projects that are coming out of, Joint ventures, where we are confident that we’ll be able to, to change people’s lives and create general shuttle wealth for these homeowners that have lived in the committee for over 40 years and don’t want to move. And we believe in being a social impact investor will make a difference.
Impact Investing is an investment in a project with a desired outcome that will positively impact the wellbeing of social, environmental or governance of a company or society. Historically, these projects have been mostly financed by government or non-profit programs because of the longer time horizons, often necessary to achieve positive results.
For instance, the Workforce Development Initiative sponsored by the New York Government has invested $175 million throughout New York State to “support strategic regional efforts that meet businesses’ short-term workforce needs, address long-term industry needs, improve regional talent pipelines, enhance flexibility and adaptability of local workforce entities, and expand workplace learning opportunities. These types of projects can improve society as a whole, but often face challenges across various domains.
However, the increased popularity of identity politics has caused corporations to adopt social impact policies to help define their stance on popular topics and to avoid the negative impacts of “Cancel Culture”. Beyond helping to shape corporate messaging, a Social Impact can help to attract talent to an organization. In fact, according to data from RippleMatch, Gen Z candidates place the same importance on a company’s social impact initiative as they do on compensation.
Brownstone NYC has always internally operated as a Social Impact real estate developer, but never formally adopted it as an official external facing policy for PR or talent recruitment. That’s because we’ve always recognized the value in helping our community first. Our relationships in the communities which we invest in has provided a competitive advantage. Decades of trust with community leaders and our Joint Venture partners who have profited from their investments in Brownstone NYC can’t be replaced by a better investment thesis. The increasing external recognition of the value of Social Impact Investing has caused us to formalize our process to expand how many people we help. We began this process in earnest in 2018, but given how much has changed since then, we’d like to revisit the progress made to take account of how we got here and define where we’re going. This exercise will help the reader familiarize themselves with Impact Investing to better understand the opportunities available in this space and value our approach to improve our communities. The core of our ability to have an impact is based on the strength of our team. As an impact investor, we measure how the people involved in our deals help achieve our goals. This includes our Leadership, Employees, Investors and Homeowners.
Since 2018, we have refined the roles of each party to more clearly communicate expectations and benefits from helping our mission. Our executive team is responsible for navigating current financing opportunities, regulations and attracting talent. Brownstone NYC employees provide first hand feedback to measure how effective our social impact is based on Key Performance Indicators (KPI). Investors’ help make a more powerful impact by choosing to fund projects in their communities opposed to alternative options run by global corporations without local relationships. Homeowners’ impact comes from the use of local financing and services along with providing testimonials to homeowners with similar circumstances that make them attractive joint venture limited partners.
Clearly defined roles and responsibilities help ensure each party understands how they each play a symbiotic role to provide affordable homes and equity inclusion among historically underrepresented individuals.
Prior to 2018, a social impact fund may have sacrificed the ability to do well financially as an expense of the fund’s initiative. Brownstone NYC has proudly paid investment returns beyond many competitors due to the scale of our operations as a vertically integrated company. As a vertically integrated real estate development company, we operate a collection of separate companies which service the client throughout the relationship (acquisition, renovation, development and management) with Brownstone NYC. Our ability to preserve and aggregate margins across businesses results in more money available to investors and more favorable pricing to homeowners.
These margins are the opportunity and responsibility of each division of Brownstone NYC including Investor Relations, Development and Management. Measuring and enhancing the financial benefits is easier when everyone involved understands how they contribute and personally benefit.
For instance, many of our Joint Venture partners in Brooklyn come to us hopeful to capitalize on appreciated home prices, but unsure about how to do so. They see their neighbors selling for millions of dollars after renovations, but lack the funding necessary to develop the property to get it to the point where it could sell at top market rates. This leaves many homeowners who have been in neighborhoods, like Flatbush and Bedstuy, selling their frame homes for whatever value they can attract. If homeowners go this route they find themselves unable to afford a new residence in the same neighborhood because of higher prices. The loss of said homeowner, who often has been in the neighborhood for decades and multiple generations, dilutes the value of the community and the culture they created.
Brownstone NYC helps inform the homeowners about their options and find solutions based on their goals. This may include funding the development, brokering the sale of their property or resolving existing issues with tenants. We analyze the property’s financials to determine the cost and potential return to present the offer to the homeowner. This transparency helps the homeowner value Brownstone NYC’s contribution and set a benchmark for potential margins if a joint ventureagreement is established.
Each analysis requires about 100 hours of manpower to adequately define the project requirements and provide diligence necessary to form a contract with investors. This analysis was previously reserved to only be completed once a contract was established. However, after providing over 300 property analyses since 2018, we realize the importance of this information to the homeowners in our communities. That’s because many of these homes are the largest assets to these families and represent their only opportunity for creating generational wealth. By shifting this expense to a marketing cost, we have helped to educate homeowners about their options whilst lowering our cost per lead. That’s because many homeowners will come to us from existing customers who explain how we have provided solutions where traditional developers couldn’t. We help the homeowner make better financial decisions and gather market data to strengthen our analysis. This type of social impact creates goodwill for our balance sheet and ensures that generational equity is leveraged to sustain families in our communities. The result is families like the Amboys, who inherited a home from their parents, but don’t want to leave it to their kids because they can’t manage it due to their careers and growing families. With Brownstone NYC they were shown options that can turn $600k – $700k profit into a potential profit of $3,000,000 in 3 – 5 years. Brownstone NYC earned the chance to form a Joint Venture with the Amboys because “Abraham has known you for 35 years and says that you’re the guy”. This type of reputation is hard to earn and sustain, but powerful to help reach a deal that all parties involved can be proud of. Brownstone NYC has learned a lot since 2018 and we’re happy to be a part of a larger focus on corporate responsibility and social impact investing. Helping homeowners stay in their homes and profit is a powerful cause that won’t go away in the near future. This mission is durable throughout changing real estate cycles and housing trends. So long as we can help create generational equity among underrepresented investors, we’ll continue our mission to create Social Impact through investment.
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Mr Schelton Assoumou brings on board over two decades of investment entrepreneurship, experience, private equity, banking, real estate investing and development. A Wall Street veteran, he holds an MBA from Harvard Business School (Entrepreneurship) and bachelor degrees from the State University of New York at Stony Brook (Business Administration & Economics).
Assoumou was previously an investment banker with renowned investment firm JP Morgan where he amassed tremendous experience over ten years. His areas of expertise covered structured finance, investment coverage, capital markets and leveraged finance. He was responsible for the successful execution of $25 billion lead-managed ABS transactions when at JP Morgan and the origination and marketing of over $9 billion worth of high yield bond offerings plus leveraged loan syndications.
He has encountered and successfully navigated through several challenging business and personal moments. High moments in his private business life include repositioning over 120 distressed NYC area assets totaling over $80 million in terms of renovated value. More recently, Schelton has been active in the small and middle New York City real estate market through Brownstone NYC as Managing Director.
There are, generally speaking, lots of investment opportunities around suburban NYC homes under $1,000,000. In response to the Covid Pandemic, many homebuyers are flocking into the suburbs leading to unprecedented demand. This is being met with a low inventory as home sellers are cagey about selling, fearing that they might not find suitable replacement properties elsewhere. In the meantime, historically low-interest rates are also pulling in first time buyers while boosting the budget for property buyers in general.
Real Estate Trends in New York
NYC has a track record of being among the best long-term real estate and property investments in the US. The real estate market in New York has been flourishing year-over-year. NYC With demand and supply factors continuing to favor home sellers, property prices continue to rise year after year.
Even as the economy opens up after the lockdowns, the real estate appreciation rate remains low estimated at a modest 3.53%, below what was marked in most US communities. The ongoing pandemic has changed the dynamics of NYC’s real estate market dramatically and varies from neighborhood to neighborhood.
It’s a comparatively good time to buy a home in the City as competition is less and property inventory is on the rise making the housing market friendlier to buyers than to the sellers. With the current phased opening of the US economy, home buyers are quickly returning to the market keen on cashing on the opportunity to acquire their favorite properties amid the historically low-interest rates supported by the state and federal governments.
Housing Trends in the Bronx
Although the Bronx closed the 1st half of 2020 with, as usual, the lowest median sale price among the four New York boroughs, it did record the 2nd-highest price increase.
The month of May, in particular, brought a 33% price surge and lifted the median sale price rose to a year-to-date high of approximately $531,000. Although August came in at 8%, much lower than July, its $452,000 median represented a Year-to-Year 13% gain, continuing the positive pricing trends in the Bronx, constant since the advent of the Covid crisis. All in all, the borough posted a $463,000 YTD median sale price for a 9% gain compared to the same period last year.
Why Invest in the Bronx, NYC
Over the last years, land prices have significantly come down throughout NYC. The lower prices have led to greater investment opportunities for those developers that want to acquire land at low cost, affordable rates and construct multifamily rental properties, particularly in locations such as the Bronx.
Many homeowners in places like Manhattan and other urban areas are leaving for the City’s suburbs, and the Bronx offers attractive investment opportunities. As families and individuals are getting priced out of Queens, Manhattan, and Brooklyn, the Bronx is being seen by many investors such as Schelton Assoumou of BYNC as the last frontier of what can be described as “affordable real estate” in NYC.
Land costs in the Bronx are still ranked among the lowest across the NYC boroughs. If you believe or want to invest in the long-term, it might be prudent to acquire land now if the right deals land on your desk. In the investment sales market, development sites in the Bronx are among the most actively traded assets. According to the MD of Brownstone NYC, they rank 2nd highest in transaction volume behind multifamily assets.
Proximity to Manhattan combined with affordable property prices is the real driver of housing demand in the Bronx real estate. The easy access via public means, ferry and through major highways is attracting renters and buyers in droves. Many are selling their inner New York properties, as this is a great time to invest in the Bronx. The borough has several other advantages, such as reduced crime rates and an influx of development capital.
Schelton Assoumou and Brownstone NYC
Over the past six or so years, the value of real estate in the Bronx has increased by a commendable 54%, one of NYC’NYC’ highest. The Increase in value allows first-time buyers to own a more affordable home than investing in neighborhoods such as Manhattan and Brooklyn.
According to one property dealer, over the last couple of years, the value of multifamily properties in the South Bronx has appreciated by an average of about 8% YoY. For example, according to the same dealer, in Jan 2016, 1299 Clay sold for $525k, but the same property was listed July 2020 for $699k.
Brownstone NYC is offering property buyers a unique opportunity to participate in the New York real estate market. Other industry professionals such as Amian Relty also share the same confidence in the long-term growth trend being witnessed throughout the Bronx.
BNYC’s primary mission is community empowerment through inclusivity, diversity, development, and expanded knowledge. BNYC’s clients can now gain access to what were previously off-market deals at great prices. Such deals were exclusive of sophisticated real estate insiders such as bank-owned foreclosures, non-performing liens, and probates.
In 2018, Brownstone NYC initiated their “Wealth Creation Initiative”, a move designed to empower current property owners in challenging situations for mutual benefit. BYNC helps them leverage their properties to create more wealth while retaining their initial ownership stakes.
The inaugural group of NYC properties under the Wealth Creation Initiative have not only been identified, but the construction activities are ongoing, including several luxury condominiums located in formerly depressed or undervalued locations of NYC. This effort is geared towards creating new jobs, establishing a new capital base for people that previously lacked access to professional services and development capital in the housing and property sectors.
Bronx real estate offers some of the best opportunities and value in this regard, comparable to what was seen in Brooklyn after the 2012 US election. In Brooklyn, the median home prices rose from $400k to $800k between 2012 and 2019.
According to Assoumou, the Managing Director Brownstone NYC, currently, multifamily homes in the South Bronx are asking 25% above what BNYC flipped them for just a couple of years ago. These are NYC locations that nobody wanted to risk investing their capital which were literally off the radar.
The Takeaway
People are leaving central New York because of the population density, cost, and Covid19 Pandemic. This is particularly the case for older residents seeking refuge in the suburbs because of the virus. Circumstances have also compelled NYC residents to fast-track decisions they might have been considering for several years about relocation to the suburbs or even out of New York altogether.
Due to the exodus of renters in Manhattan to the NY suburbs, vacancies and rents are falling. On the other hand, rental discounts and soaring vacancies have attracted many renters to neighborhoods or boroughs that previously would not have been so attractive to buyers and investors, such as the Bronx.
This makes it an excellent time to buy NYC real estate in such areas as the Bronx. So long as the economy remains stable and the Covid19 Pandemic is brought under control, the market will continue warming up. Data from NeighborhoodScout’s show that during the latest 12 months or so, at 5.25%, New York’s appreciation rate has been slightly above the US national average. In the latest quarter, the real estate appreciation rate in NYC has been 1.04%, annualizing to a rate of about 4.22%.
market meaning that the supply is greater than the demand for property and homes. As of January 2021, the Bronx’s median listing price of homes was $549K, going up 2.6% YoY. The median listing price was $327 per square foot, while $504.5K was the median house sale price.
Are you considering venturing into the Bronx? Some of the best neighborhoods include Throgs Neck, Riverdale, and Wakefield. Homes in the Bronx, NY, on average, sell after 152 days on the listings market and the median days on the market in the Bronx continues to come down.
In
2021, the Bronx is a buyer’s
market meaning that the supply is greater than the demand for
property and homes. As of January 2021,
the Bronx’s median listing price of homes was $549K, going up 2.6% YoY. The
median listing price was $327 per square foot, while $504.5K was the median
house sale price.
Are you considering venturing into the Bronx?
Some of the best neighborhoods include Throgs Neck, Riverdale, and Wakefield.
Homes in the Bronx, NY, on average, sell after 152 days on the listings market and the median days on the
market in the Bronx continues to
come down.
Since the Great Financial Crisis of 2007 – 2009 tremendous development has taken place across the U.S. in minority owned communities. Despite having the most to gain after being the hardest hit during the financial crisis, the families that have owned stores and built lives in these communities have not prospered from this community investment as much as the investors themselves. According to Pew Research, between 2007 and 2009, home equity for black Americans decreased 12 percent.
Meanwhile, several studies have shown that wealth factors into providing beyond basics like food and shelter. Wealth creates a safety net for emergencies, a down payment for a home or seed capital for a new business. Take Brooklyn, NY as an example. From 2010 – 2019 the property values have increased by 58%, but home ownership among black families since 2001 has decreased by 5%.
Translation: The capital invested in these communities hasn’t benefited the people who made the community an attractive investment initially. Instead these citizens’ plight has become investor’s profit. There’s enough blame to go around, from this demise of wealth occurring to black families while under two terms of leadership of our country’s first black President.
You could rightly criticize the unjust financial system which provided 0% interest rates to corporations to buy their their own stock back in historic amounts while lending the same money to consumers at historically high credit card interest rates. However, now isn’t a time for blame, it’s a time for action. Action must be swift and just by leaders who recognize the strategy for developing community wealth, have experienced the drawbacks of inequality and recognize the generational impact from a strong family.
For over 10 years, I have gone beyond recognizing the potential of the people in my community and have invested in their future wellbeing. This has been through a number of formal and informal ventures. I’ve mentored our youth, sweated with leaders of our community in support of their initiatives and provided homes for working families. Today, I announce a bigger initiative that will lift these same people beyond what they could do themselves. A holistic public and private partnership that invests the spoils of capitalism into the fertile ground of our communities to provide potential gains beyond financial returns. This initiative is called the ASK Capital. It’s a non-profit that provides opportunity to deserving individuals independent of their backgrounds. As a citizen who has lived the impact of a criminal history I want to provide the path to achievement. My education and strong career provide the basis that have allowed me to rise beyond my circumstances. My network has buoyed me during challenging times that I couldn’t stand alone. Today, I’ll further leverage these resources in Ask Ventures. Here are the objectives of Ask Ventures:
Provide an advisory platform for urban and minority start ups that provides access to capital and to advice
Invest in real estate in developing communities
Support candidates that traditional Venture Funds would overlook due to criminal histories.
Investing Minority Start Ups
The educational system has opportunity to improve helping to start a business. Even after graduating from one of the most prestigious universities in the world, my most valuable lessons were learned from my years in business.
That’s because there was no course on entity formation, deal flow, financing or tax management. This vacuum of information impacts the minority community the hardest.
They are the least likely to have a network of professionals who can guide them in the formation of their entity. More importantly, there’s not access to capital to help pursue a business.
Ask Capital will invest in minority start ups by offering a Pre-Accelerator and Incubator.
The Pre-Accelerator is an 8 week program that helps entrepreneurs go from idea to investment opportunity. Each week the entrepreneur will learn a different lesson to help develop their opportunity. By graduation, the student will have a pitch deck and financial model to help attract capital.
Joint Venture Real Estate Investment
Homes are often a primary source of wealth for many Americans. This is also true in minority communities that are candidates for development and gentrification.
In order to help the community capitalize on the inflow of investment funds, Ask Capital will enter into Joint Ventures to rehab and sell properties.
These joint ventures allow the home owner to potentially reap greater returns than if they were to sell their property to an investor. This increased capital allows the homeowner to find a new home and also attain wealth beyond their real estate.
Ask Second Chance
The ability to re-enter society after incarceration is very difficult. In fact, nearly 75% of inmates released from state prisons are rearrested within five years of their release, according to the Bureau of Justice Statistics.
This could be tied to a lack of resources to help these people integrate back into society.
It’s very difficult to get a job as an ex-felon, let alone financing to start a new venture. I know this experience too intimately, even though I never served any prison time. Following a four year Federal trial, I have had tremendous difficulty to let that once instance not define my future. Despite a stellar background and network, my resources were limited following the Judge’s decision to end my case with a fine.
If a Harvard MBA has trouble getting footing following legal issues then many others need help if they will have a real chance of success. Our goal with Second Chance is to provide ex-felons with training to earn a livable wage. We’ll help introduce the candidate to a program that gives them a job following completion. For instance, we may help the felon attain their OSHA laborer certificate so that they may work on a construction site and become eligible for further certifications.
Our goal is to help rebuild these members of our society with a job to provide for themselves without criminal means.
We’re excited for our future and believe our best days are yet to come. Partners and candidates can apply at the Ask Capital website.
ASK Capital is chaired by Schelton Assoumou. You can read about his background here.
