Dream Builders believes that equitable opportunities are foundational for youth to realize their fullest potential. Our mission is to provide at-risk youth1 with access to a diverse and broad set of assets through mentorship, entrepreneurship, scholarship, and leadership training. Access to these assets will provide these youth with the necessary skills to succeed academically and professionally, and attain ownership in the development of low-income/highly distressed communities.
i. The youth will work under the guidance of Dream Builders to select properties based on various economic/community improvement factors. ii. The youth will create a proforma (budget) for each project to determine the expected cash flow for each investment. iii. The youth will work to hire contractors, real estate agents, and property managers for their real estate investments. The youth will work with Dream Builders to manage these individuals/entities to ensure work is completed in a timely manner.
i. The youth will work under the guidance of Dream Builders and licensed trade companies to learn about plumbing, HVAC, electrical, carpentry, and other trades related to real estate construction. ii. Due to the high demand of skilled trade labor, the youth will have access to job opportunities that pay a wage sufficient to be financially independent adults – starting wages can range from $15-40 per hour.
i. By completing the above tasks, each Youth will be paid for their work by Dream Builders. The pay they receive will be used to make an equity investment in a Partnership. This Partnership will have an equity stake in the underlying real estate assets (See Exhibit A – Equity Structure). ii. The Youth will improve their credit worthiness and personal finance position by owning a share of the real estate assets via Partnership.
i. As the properties begin to cash flow via rent payments, the youth will receive distributions from the Partnership. These distributions will be reserved in a Partnership account until the Youth has earned their high school diploma and enrolled in a college institution. ii. Following receipt of their diploma and verification of enrollment in college, the Partnership will use the reserved funds to pay a portion of the Youth’s college tuition. iii. While the Youth is attending college, they will receive quarterly distributions from the Partnership. These distributions will be earmarked to pay for college expenses. iv. After the Youth graduates from college, they will have the option to buy out the other investors’ ownership interest in the Partnership or sell their ownership interest to Dream Builders. v. This influx of cash will allow the Youth to establish their finances as they prepare for life after college.
i. By working on developing real estate projects, the youth will have an added appreciation for the hard work it takes to complete a real estate project. ii. The real estate projects will be rented to low income individuals or Section 8 eligible families. This will create an awareness of assisting underprivileged families for the youth.
i. 95% of properties will be located within a “low-income” community, defined as any population census tract where the poverty rate for such tract is at least 20%, or in such tract the median family income does not exceed 80% of the greater statewide median family income or the metropolitan area median family income.
i. Rental properties will be leased to individuals whose income is 60% or less than the area median gross income. ii. Low-income tenants will be charged a maximum rent of 30% of their maximum eligible income, which is 60% of the area’s median income adjusted for household size as determined by HUD.
i. For-sale properties will be sold to low-income individuals whose income is 60% or less than the area median gross income or first-time home buyers. ii. Dream Builders is planning to partner with financial institutions to provide financial literacy and home ownership classes to these lowincome individuals and/or first-time home buyers. iii. Dream Builders is partnering with Beyond Housing to identify downpayment and other financial assistance for home buyers.
Dream Builders will also have an ownership interest in the underlying projects. The distributions received from the Partnership will be used to redevelop community parks, provide school supplies to underfunded schools, sponsor career fairs, provide career resources to low-income families, partner with local nonprofit organizations that provide educational resources for inner-city youth (Boys & Girls Clubs, Big Brothers Big Sisters, YMCA, etc.), and fund community centers to serve the communities we invest in (long-term).
i. By developing properties, parks, and building community centers, the amount of abandoned houses and worn down community areas will be decreased. ii. Numerous studies, beginning with the landmark “Broken Windows” theory (first presented in 1982), have found that urban decay is inextricably linked to crime. These findings are specifically applicable to public housing and affordable housing, as buildings which fall into disrepair can become what sociologists call “problem properties.” As a 2011 study by the University of Michigan found, “Problem properties may contribute to “hotspots” of criminal activity… their neglect signals a lack of care and concern, which in and of itself invites anti-social and criminal activity.”