Real Estate Investors: Greedy Profiteers or Good Samaritans?

I am proud to be a real estate investor but in the many years I have been in this business, I have heard the most inaccurate, absurd, as well as offensive things about real estate investors. Things like: we are greedy profiteers, we are slumlords, and probably the most outrageous that was told to one of my real estate friends by his banker – “we are in an evil business”. Imagine that. Who would say something like this, except someone who doesn’t truly understand what we do as real estate investors?

I want to set the record straight so when you hear things like this you can respond with the facts and be proud to call yourself a real estate investor. Real estate investors add more value to a distressed community than anyone else. I can also argue that real estate investors maintain and improve the value of vibrant communities as well. This may sound bold, but it’s absolutely true. Whether you wholesale, flip or own rental properties, you are adding tremendous value to the community by taking risks others won’t. And guess what? You should make money doing it! If there were no incentive, and no one willing to put their time and money at risk, entire communities would deteriorate.

When you drive through a neighborhood and see that awful house on the street (you know the one I am talking about), the one with 3 foot tall weeds, 15 newspapers in the yard, mail covering the front porch, broken windows with stray animals going in and out, etc., you see opportunity. The neighbors see a bad situation that won’t go away fast enough because, from their perspective, no one cares enough to do anything about it.

Even worse is when the city takes action and boards up the house, creating a false impression that this is a bad neighborhood. Think about this for a minute. If you saw 2 houses like this on the same street, what would you think? How about 3 on the same street? I have seen this many times. When this happens, the value of the neighborhood can completely erode (along with the property tax revenue, affecting schools, hospitals, and even essential services like police and fire). There is less desirability for a homebuyer to purchase a home in a neighborhood with 3 boarded-up houses on the street. Safety becomes the #1 concern in these situations and fear will make buyers look elsewhere.

I once had a tenant from Detroit who retired to Dallas because he had family here. I remember asking him what it was like living in Detroit. He said he was scared all the time as he lived in the inner city and most of the houses on his street were vacant. Moving here for him was a blessing as he said he escaped the cold weather as well as a dangerous neighborhood. This happened because no investors were willing to take on the risk where he lived.

When a real estate investor finally steps in to improve a property the value of the property increases, the tax assessed value increases, the neighborhood feels safer and more desirable, and families want to live there. For you to take on this level of responsibility, you need to be rewarded financially and need to feel great about what you are doing. So when you hear anything negative about real estate investors, remember to counter back with what I mentioned, in a way that is confident, courteous, and professional, because no one is doing more for distressed communities than real estate investors.