MEDIA

THE PROMISE HOMES COMPANY

Jason Stewart, CFA
Chief Operating and Investment Officer
404-885-6678
js@thepromisehomescompany.com

MEDIA RELATIONS

Bill Mendel
212-397-1030
bill@mendelcommunications.com

 

ATLANTA-BASED PROMISE HOMES NEARLY DOUBLES IN SIZE; MISSION THE SAME
NEWS RELEASE | 06-14-2018

If all goes according to its business plan, Promise Homes Company will boost financial literacy, show people how to cut their taxes and add to affordable housing stock.

And also make a profit.

“It is possible to do everything we do and provide a good return, without being a jerk,” said John Hope Bryant, chief executive officer of the Atlanta-based company, founded almost exactly a year ago as an institutional owner of single-family homes.

This week, Bryant told The Atlanta Journal-Constitution that Promise had made an acquisition that nearly doubles its size. With the purchase of 167 properties from Invitation Homes, the Promise portfolio is swelling to more than 400 homes, most of them in metro Atlanta.

Bryant is best known for being founder, chairman and CEO of Atlanta-based Operation HOPE, Inc., which describes itself as “the largest not-for-profit provider of financial literacy, financial inclusion and economic empowerment tools and services in the United States.”

He is also an author of several books, including “How the Poor Can Save Capitalism: Rebuilding the Path to the Middle Class.”

With $130 million in capital, Promise Homes launched in June of 2017, immediately becoming one of the largest minority-owned companies owning and renting single-family homes.

And in some ways, Promise reprises the goals of Operation HOPE. Tenants are offered a series of educational programs aimed at boosting their financial literacy and advice on eligibility for the earned income tax credit. Tenants are rewarded for improving their credit scores.

“And if you do, we will give you a gift card for Target or a grocery store,” he said.

Hit a high rating and Promise will cut your rent by 10 percent.

While the company might sacrifice some short-term profit, the idea is to benefit both landlord and tenant in the long run, Bryant said. “The tenants that we have will be left stronger, and they will become more valuable both to themselves and to us.”

Like any property owner, Promise needs to hire workers to do maintenance, plumbing and electrical work, as well as general management. But the company will hire local, minority employees and contractors to perform those services, Bryant said.

The result will be a recycling of millions of dollars back into the community, he said.

Typically, Promise is paying between $100,000 and $125,000 for each home it buys and it charges rent of $1,000 to $1,200 a month, Bryant said.

The business model is aimed squarely at renters with modest incomes who work hard and need a break, he said. He calls them the “invisible class.”

“The invisible class are the majority of Americans who are living from paycheck to paycheck with too much month left at the end of their money,” Bryant said. “They are middle class and working middle-class people. If you are making $40,000 to $50,000 – that is our sweet spot.”

After the crash, some investors – some backed by deep-pocketed hedge funds — swooped into Atlanta, snapping up foreclosed homes at depressed prices. Some like Dallas-based Harbour Portfolio made controversial rent-to-buy offers that enticed people who might not have qualified for a mortgage. Others just wanted the steady cash flow of rent with the idea of selling the homes once prices climbed back.

But the profit at Promise does not depend on price appreciation, Bryant said. “We are not an appreciation model. Our business depends on cash flow. This is a long-term buy and hold play.”

It also helps the bottom line to grow the business – a bonus of the deal announced this week, he said.

Larger owners have “economies of scale,” that is, they can spread out expenses and bargain for volume discounts when purchasing materials or services.

Promise Home Company
Founded: 2017
Headquarters: Atlanta
CEO: John Hope Bryant
Typical value of home purchased: $125,000
Rent charged: $1,000-$1,200
Income, typical tenant: $40,000-$50,000
Home purchases announced this week: 167
Number of homes owned: 400-450

 

 

 

THE PROMISE HOMES COMPANY LAUNCHES WITH $130 MILLION INITIAL INVESTMENT & COMPLETES FIRST ACQUISITION OF A $22 MILLION PORTFOLIO OF SINGLE-FAMILY HOMES IN THE ATLANTA AREA
NEWS RELEASE | 08-07-2017
THE PROMISE HOMES COMPANY LAUNCHES WITH $130 MILLION INITIAL INVESTMENT & COMPLETES FIRST ACQUISITION OF A $22 MILLION PORTFOLIO OF SINGLE-FAMILY HOMES IN THE ATLANTA AREA

Acquisition Makes Promise Homes One of the Largest Minority-Controlled Owners of Institutional-Quality, Single-Family Residential Rental Property in the U.S.

ATLANTA, GA—August 7, 2017—The Promise Homes Company, a newly-formed single-family residential rental property asset manager, announced today its official launch with $130 million in initial funding from private investors.

Founded by social entrepreneur and businessman John Hope Bryant, Promise Homes has established an innovative business model that seeks to provide residents with quality housing at affordable prices as well as free financial and economic support services through a contract with Operation HOPE—the leading non-profit, global provider of financial dignity education and economic empowerment programs. Additionally, Promise Homes partners with local, minority-owned small businesses to provide property maintenance services for its homes, thereby supporting local job creation.

“Promise Homes was established with the clear objective of creating a new relationship between owner, resident and the community,” said Mr. Bryant. “We know that by supporting residents with financial and economic support services through Operation HOPE, we will be able to improve the lives of residents, while also making Promise Homes a stronger and more resilient company. By treating residents as partners in shared prosperity, Promise Homes will also improve the communities that it serves. Promise Homes will do well by doing good.”

Promise Homes also announced today its first acquisition of a $22 million portfolio of single-family homes in the Atlanta area from an institutional owner of single-family homes, making Promise Homes one of the largest minority-controlled owners of institutional-quality, single-family residential rental homes in the U.S.

“This initial transaction demonstrates both the power of our real estate expertise as well as our desire to impact communities throughout the metropolitan Atlanta area,” added Mr. Bryant. “This is an important step for both Atlanta and our business model that embraces our residents as partners.”

In addition, Promise Homes also announced today that it has executed two vendor contracts for property management and maintenance. Specifically, the company has contracted with Atlanta-based minority supplier/contractor K3 Hauling & Grading to provide maintenance services for Promise Homes’ Atlanta portfolio.

“K3 is excited to partner with The Promise Homes Company and continue our commitment to improving Atlanta communities,” said Kegdrick Smith, Sr., Chief Executive Officer of K3 Hauling & Grading. “At K3, we are focused on hiring minority professionals who are local to the communities where we operate, which also results in building their economic resiliency from the grass roots.”

Renters Warehouse, a nationally-recognized firm that currently services more than 19,000 homes across 42 markets in 25 states, will provide property management services for the initial portfolio as well as serve as a preferred provider for additional acquisitions across the U.S.

“Renters Warehouse is incredibly proud to be partnering with Promise Homes,” said Anthony Cazazian, Chief Investment Officer & President of Portfolio Services at Renters Warehouse. “We love their mission and are very excited to help bring their practical and innovative vision to life. This transaction also validates the benefit of our ‘stapled’ property management solution for other institutional owners that may sell portfolios to buyers that don’t have their own internal infrastructure.”

Promise Homes is led by Chief Executive Officer John Hope Bryant and Chief Operating Officer and Managing Partner Jason Stewart. Members of its Investment Committee include Tony Ressler, Co-Founder, Chairman and Chief Executive Officer of Ares Management, L.P. and Principal Owner of the Atlanta Hawks Basketball Club, and Michael Arougheti, Co-Founder, Director and President of Ares Management, L.P. and Executive Board Member of Operation HOPE. Each has also made an investment in the company. Promise Homes plans to expand its portfolio of affordable, single-family residential rental homes to lower and middle income urban and suburban communities across the U.S.

 

About Promise Homes

Launched in May 2017, the Promise Homes Company is one of the largest minority-controlled owners of institutional-quality, single-family residential rental property in the United States, with a focus on working class and middle class communities. Promise Homes offers its residents quality housing at affordable prices as well as financial empowerment and assistance that would position them financially to eventually own a home. Promise Homes also contracts with local, minority-owned businesses for property maintenance services, thereby creating local, sustainable jobs in the communities where it invests. Promise Homes is led by Chief Executive Officer John Hope Bryant, an entrepreneur, author, philanthropist, and prominent thought leader on financial inclusion, economic empowerment and financial dignity. He is also the Founder, Chairman, and Chief Executive Officer of Operation HOPE, Inc.; Chairman and Chief Executive Officer of Bryant Group Ventures, and Co-Founder of Global Dignity. Chief Operating and Investment Officer Jason Stewart, who has more than 17 years of experience overseeing portfolios of real estate, fixed income, equities and derivatives, leads the day-to-day management and operations of the company.

 

K3 Hauling & Grading

Founded in 2009, K3 Hauling & Grading is a minority-owned small business located in Metro Atlanta with more than 15 years of experience providing hauling and grading services to individuals and businesses throughout the State of Georgia. In addition, K3 Hauling & Grading provides masonry, landscaping, and other types of construction and property maintenance services. For more information, please visit our website at www.k3haulingandgrading.com.

About Renters Warehouse

Renters Warehouse is one of the fastest growing and highest reviewed residential property management companies in America. Backed by growth equity investor and majority stakeholder Northern Pacific Group, and under the leadership of President and CEO Kevin Ortner, Renters Warehouse now manages more than $3 billion in residential real estate, servicing 13,000+ investors across 19,000+ residential homes over 42 markets and 25 states. For more information, please visit our website at www. http://renterswarehouse.com.

 

Contact

Bill Mendel
Mendel Communications
212-397-1030
bill@mendelcommunications.com