Tackling Homelessness: The Project PRC Plan
Yo, what's up, everyone? Today’s chat is all about leveling up in real estate and making a real difference! We’re hanging with Charles Williams from Dallas, who’s not just flipping houses for cash but is on a mission to tackle homelessness and affordable housing through his project, Project PRC. We dive into his wild journey from engineer to commercial real estate whiz, and he’s dropping gems about why commercial deals can be way more lucrative than residential ones. Plus, he’s got some killer insights on how we can all help out our communities by supporting affordable housing initiatives. So, grab your snacks, kick back, and let’s get into it!
Project PRC: A mission to end homelessness and provide affordable housing with Charles Williams
Visit https://www.paynelessflipping.com to learn how to do real estate deals the payneless way!
Takeaways:
- This episode dives deep into the importance of affordable housing, showcasing Charles's mission to help those in need.
- We learned that commercial real estate can be way more profitable than residential, with huge potential earnings on big deals.
- Building a solid reputation in real estate is key—integrity brings business your way in the long run.
- Charles shares that a little bit of help can make a big difference; even $10 can contribute to ending homelessness.
Links referenced in this episode:
Companies mentioned in this episode:
- Project PRC
- Pioneer Realty Capital
Transcript
What is going on, everyone?
Speaker A:This is Investor Thrive, the podcast, the painless wholesaling podcast, where basically our goal here is to bring you in to learn about real estate and so you can learn how to do it through the experience of others.
Speaker A:And today we have Charles Williams in here.
Speaker A:Charles, you're from Dallas, Texas, right?
Speaker A:Is that where.
Speaker B:I'm in the Dallas area?
Speaker B:I live in Arlington, but yeah, but.
Speaker A:Generally Dallas, Texas, I love it.
Speaker A:Yeah.
Speaker A:So I'm grateful to have you on here today.
Speaker A:And everybody, we're going to learn some important stuff today.
Speaker A:Charles is on a mission.
Speaker A:He's on a mission and we're going to learn more about his mission.
Speaker A:Because, guys, it's not all about just you flipping houses, wholesaling, making money.
Speaker A:It's about helping and serving others and loving God's children.
Speaker A:So this is what we're going to talk about today is dive in into how Charles got into real estate and how he even stumbled into and.
Speaker A:And is doing what he's doing right now.
Speaker A:So, Charles, can you give us a little intro to yourself?
Speaker A:A, you know, quick definition, 30, 30 second minute intro, you know, about yourself?
Speaker B:Yeah.
Speaker B:So I started my career off as an engineer.
Speaker B:I worked for an engineering firm, then started my own engineering company.
Speaker B:Decided that I wanted to make some money.
Speaker B:So I went back to grad school, got a master's in accounting and finance, and then ended up in the commercial real estate business.
Speaker B:Started out as a commercial mortgage broker and then eventually a correspondent lender where institutions paid us to lend out their money.
Speaker B:Then we became a direct lender, and now we mainly focus on real estate development where we turn dirt into money.
Speaker B:So that's kind of a quick down and dirty history about me.
Speaker A:I love that.
Speaker A:And it sounds like you've really made some big jumps.
Speaker A:I've been reading a book called 10x is easier than 2x.
Speaker A:Sounds like you made a bunch of 10x moves over your journey from, you know, being an engineer.
Speaker A:That is a big move.
Speaker A:But you just kept going and going.
Speaker A:Is that, is that true that you feel like, you know, looking back, you've just been leveling up every so often?
Speaker B:What I've learned over the years is bigger deals are a lot easier to do than small deals.
Speaker B:Yeah.
Speaker A:Wow, that is powerful.
Speaker A:That's a powerful statement right there.
Speaker A:Because I think a lot of people probably think the other way around, right?
Speaker B:Yeah, Yeah.
Speaker B:A lot of people want to try to start with residential real estate and then get into commercial, but they are two totally different businesses.
Speaker B:You want to make real money commercial, real Estate's where it's at.
Speaker B:You can apply some of the same business principles, but understand it's not the same business.
Speaker B:And so, but, but yeah, you make significantly more money on commercial real estate than you do residential.
Speaker B:My first transaction in commercial real estate, I made $146,000.
Speaker B:And I didn't even, I was like, man, did I do something illegal?
Speaker B:I couldn't believe I made that much money and didn't owe it to anyone.
Speaker B:And so, so yeah, you make a significantly more money doing commercial than you do residential.
Speaker A:Do you feel like it takes longer to do a commercial deal than it would like a residential?
Speaker B:Oh, well, yeah, I think, I mean, to close a commercial transaction can take, you know, anywhere from 60 to 90 days.
Speaker A:Okay.
Speaker B:It's hard for me to really compare.
Speaker B:I've never done a residential transaction other than buying my house, but I bought my home in less than 30 days, so I would imagine that's probably the difference.
Speaker A:Interesting.
Speaker A:And I'm just curious before we dive into your, your mission that you have with Project prc, Correct.
Speaker A:We're, I'm curious on that deal that you had, was it a flip?
Speaker A:Was it.
Speaker A:You bought it and then you resold it quickly?
Speaker A:Did you wholesale?
Speaker A:How, how did you make that money?
Speaker B:Well, that was when I first started in commercial real estate.
Speaker B:So I worked as a commercial mortgage broker.
Speaker B:So my job was to help someone who needed capital or financing to acquire this property and to match them with a institutional investor who's willing to give them the money to acquire the property.
Speaker B:For, for being that matchmaker.
Speaker B:I made $146,000.
Speaker A:Amazing.
Speaker A:Amazing.
Speaker A:And the property, was it on, was it listed?
Speaker A:Was it.
Speaker A:How did you find the property?
Speaker B:Client found the property because you remember I worked on the finance side of the.
Speaker A:Okay, gotcha.
Speaker B:But the property is in small town in Mississippi.
Speaker B:They got it for a really, really good price.
Speaker C:Yeah.
Speaker B:That's why it was really easy to finance.
Speaker B:I'm not sure how they found it, but a lot of times when you find those off market opportunities, it's because of relationships.
Speaker B:That's why it's so important to build your network and to build, you know, that, that reputation where people can trust you, you're honest, business will flow your way if you have integrity.
Speaker B:I've seen a lot of people that know how to cheat and steal and lie.
Speaker B:They might get one or two deals, but their reputation will kill them in the long term.
Speaker B:But you have a great reputation.
Speaker B:Business will flow your way.
Speaker A:Yeah, it's a long term game right here.
Speaker A:You want to do 1, 2 deals.
Speaker A:Maybe you can be lie, cheat and steal, but you're not going to last.
Speaker A:And if nobody wants to get into this business just to do one or two deals, that's not, not worth it.
Speaker B:We have been doing this for over 20 years.
Speaker B:So we protect our reputation.
Speaker B:We're a company, we're a business of integrity.
Speaker A:That is amazing that on the finance side, you're able to bring in that much.
Speaker A:Because in my, my side of the business, what I teach is wholesaling or finding the property and then, you know, purchasing it and then selling it.
Speaker A:So you made that off of financing.
Speaker A:Wow, that's.
Speaker B:Oh, well, you think about it.
Speaker B:We, we earn anywhere from.
Speaker B:Depending on how we structure the deal, we earn anywhere from 1 to 3 points on a transaction.
Speaker B:My average deal was $20 million.
Speaker B:So 3 points on a $20 million transaction is $600,000.
Speaker A:Amazing.
Speaker A:Amazing.
Speaker C:Yeah.
Speaker A:So that a hundred percent makes this total sense because you're, you're dealing with the points of the, the purchase price, right?
Speaker A:Like, of how, what you sold for with wholesaling and kind of what we deal with on the residential side, depending on what, how low you get it and what you can sell it to someone for, that's your spread.
Speaker A:So we make it depending on what you get it for and what you resell for.
Speaker A:But that's, that's amazing too, that you're, you did that and you do that.
Speaker A:So let's, let's talk, let's dive into your mission.
Speaker A:So tell me how you, you, what this, your mission is and how you came across doing this after, you know, your journey that you've kind of let us know about.
Speaker B:Well, that's a very good question.
Speaker B:You know, obviously I've had a great career.
Speaker B:I have a home in, in Arlington.
Speaker B:I had a, lived in a very nice high rise also in Houston.
Speaker B:And, you know, you walk outside of these very nice places or outside my neighborhood, and you see people laying on the street, and it's becoming more and more common these days.
Speaker B:And then, you know, you also just being in the industry, hearing tenants complain about rising rent and how they can't afford it.
Speaker B:We hear about stories where people may work in a community, but they have to drive 30, 45 minutes to live outside the community because there's no affordable housing.
Speaker B:And I just decided one day that if people like me don't come together and do something to give back just a little, that our entire community is going to suffer.
Speaker B:And when I say community, I'm talking about our nationwide community we have to give attention to the affordable housing issue and the homelessness issue.
Speaker B:And that's why I was one of the individuals who came together to start this organization called Project prc.
Speaker B:It is an organization that, whose mission is to end homelessness, provide affordable housing for our workforce, our C collar workers, I'm sorry, our gray collar workers, our blue collar workers, and to make sure that we have suitable student housing for individuals seeking an education.
Speaker B:You'll be surprised that some of even the prominent universities have poor student housing for their students.
Speaker B:So this nonprofit organization is designed to address those issues.
Speaker A:So can I ask you questions deeper into the project and how it's going to get you're going to fulfill that mission?
Speaker B:Yeah, absolutely.
Speaker A:What's the goal?
Speaker A:Is it to, to attack it in one market at a time, to just do it all over?
Speaker A:How are you going to accomplish this mission?
Speaker B:That's a very good question.
Speaker B:So we're focused right now in Texas, because I'm in Texas.
Speaker B:But our charter from the federal government allows us to create or you know, to duplicate our efforts here in Texas, all over the United States.
Speaker B:The goal is for Project PRC to purchase a hundred, a minimum of 155,000 apartment communities in addition to hotels and assisted living facilities.
Speaker B:So we have also, in addition to that, a rental assistance program and we can talk a little bit about that.
Speaker B:We also are looking at putting together a down payment assistance program.
Speaker B:But the properties we own will be set aside for affordable housing so that individuals who can't afford a market rate apartments, they can move to one of our affordable housing communities.
Speaker C:Wow.
Speaker A:Okay.
Speaker A:So the government is, is, are they helping you with financing?
Speaker A:Is that what their, their part is in on this?
Speaker A:Like how do they play into this?
Speaker B:That's an excellent question.
Speaker B: n't know is that Prior to the: Speaker B:But when the Reagan administration came, they eliminated all those social programs.
Speaker B:They decided that they didn't want to be considered a socialist country.
Speaker B:Right.
Speaker B:So, you know, let's not care about people.
Speaker B:But one interesting thing that they did was they allowed private citizens to create nonprofit.
Speaker B:And certain nonprofit organizations have the privilege of doing something that only a government entity can do, and that is to issue tax exempt municipal bond to access public capital on the bond market.
Speaker B:By creating this organization, we kind of can't come like a de facto government agency in that we can issue tax exempt municipal bonds to fund the acquisition of these multifamily properties and convert them to affordable Housing.
Speaker C:Wow.
Speaker A:And you said 155,000 doors.
Speaker A:Is that what the goal is?
Speaker B:155,000 apartment communities?
Speaker C:Oh, my God.
Speaker B:That could be over a million doors.
Speaker B:And.
Speaker B:And now the reason that number comes from.
Speaker C:Yeah.
Speaker B:There are 155 million apartment communities in the United States.
Speaker B:Okay.
Speaker A:So it's temp.
Speaker B:You're not just 1%.
Speaker A:1%.
Speaker A:So they're saying, hey, take down 1%.
Speaker A:That's what.
Speaker C:Right.
Speaker B:And let's use that to make sure that individuals who are our service workers, who are our manufacturing workers, people at the lowest income levels, let's take 1% of our current inventory of properties and make sure that those people have a place to live in the communities where they work.
Speaker C:Wow.
Speaker A:Sounds like a giant project, to be honest.
Speaker A:Like a big undertaking project, baby.
Speaker A:So let's just take down one a community.
Speaker A:So if you take one, you said you're closing on one, correct?
Speaker B:Yeah, so.
Speaker B:So.
Speaker B:And that's so Pioneer Realty Capital, which is the corporation I own, we are a real estate development company, and 80% of the multifamily developments that we engage in, we develop and then we turn around and we sell to the nonprofit.
Speaker C:Okay.
Speaker B:Okay.
Speaker B:And so.
Speaker B:So the project that we're currently.
Speaker B:We just finished, the student housing project outside of Houston, Texas, and now we're going to sell that to the nonprofit.
Speaker B:We have another portfolio of 19 properties, about a $750 million transaction.
Speaker B:Those 19 properties we're going to acquire, and then we're going to turn around and sell that to the nonprofit.
Speaker B:So that's how we're building.
Speaker B:We have a mission to acquire, at minimum, a thousand units a year.
Speaker B:But right now we're on track to acquire anywhere from six to 7,000 units a year.
Speaker C:Wow.
Speaker A:How are you finding these.
Speaker A:These deals?
Speaker A:Is it of relationships on the market?
Speaker A:How are you finding all these opportunities?
Speaker B:Well, you know, it's kind of the luck of the draw, because now with this new economic climate where interest rates have gone up significantly, there are a lot of people that were in the apartment flipping business.
Speaker B:Right.
Speaker B:That are now upside down.
Speaker B:And so now they need a way out.
Speaker C:Okay.
Speaker B:And so.
Speaker B:So it just happened that our federal government and its infinite wisdom decided to significantly raise rates.
Speaker B:Now it's hurting a lot of people, but it benefits Project prc because now there are a lot of properties on the market that we can acquire, put in our portfolio, and convert those into.
Speaker B:And use those for affordable housing.
Speaker A:So do you have.
Speaker A:Do you have a certain amount of funds that you're.
Speaker A:That they've enabled you to use that.
Speaker A:You, you're keeping track.
Speaker C:Okay.
Speaker A:We can't overpay on this property.
Speaker A:Or like, how are you deciding?
Speaker B:We still have to make a smart business decision, of course, because of the fact that we are issuing tax exempt municipal bonds, the credit rating of the nonprofit.
Speaker B:As managers of the nonprofit, we have to make, maintain.
Speaker B:So the nonprofit has to have good assets in it in order to maintain its credit rating.
Speaker B:And that's going to induce bond buyers to purchase those bonds.
Speaker B:Okay.
Speaker B:So we can't go out and buy properties and make bad decisions.
Speaker B:The properties that we purchase have to be economically feasible.
Speaker B:But we are able to make properties more economically feasible because of the fact that as a nonprofit, we don't pay property tax.
Speaker C:Wow.
Speaker B:So if that property, it may not pencil out as a market rate transaction, but when you subtract out the property tax, it might be a good deal.
Speaker B:So that's an advantage to us as a buyer.
Speaker B:We can come in, be a little more aggressive on the buy because the fact the government has given us a way to create a significant discount.
Speaker B:And then in addition, remember, because we are a charitable nonprofit, we're also collecting money through our charitable efforts in our donation programs.
Speaker A:So for me, as a wholesaler or as a lot of my listeners are, they're constantly looking for deals for people for buyers that are on market or off market.
Speaker A:Whether they get it under contract, on market or off market, they negotiate.
Speaker A:Would that be something where they'd be able to reach out to you if they had a apartment complex community under contract and they could sell, you know.
Speaker B:You know, buying apartments, hotels and assisted living facilities?
Speaker B:But we like portfolios.
Speaker B:It's an easier transaction.
Speaker B:And we talked about scale earlier.
Speaker B:It's easier for me to do a bond transaction that's a hundred million dollars or more.
Speaker B:Okay.
Speaker B:If it's 1 or 2 million, then it's not something we're interested in.
Speaker B:We're looking for someone to go out and accumulate a portfolio that's at least $100 million.
Speaker B:And if, and if the deal pencils out, then it's definitely something we're interested in.
Speaker A:In a portfolio of 100 million in Texas, how many communities, apartment complex communities, is that usually or how many doors generally?
Speaker B:Well, right now we're, we're buying, we're seeing prices from about 160 to 185,000 per unit.
Speaker C:Okay.
Speaker B:So you know, if you take a, you take a hundred million dollars divided by 160,000, that tells you, what's that about 300 unit, maybe 400 unit apartment complex.
Speaker C:Right.
Speaker B:So, you know, it's not hard to get a hundred million dollar deal.
Speaker C:Yeah.
Speaker C:Wow.
Speaker A:So.
Speaker A:So if I wanted to, I could say, hey, forget the single family game.
Speaker A:Let me go find some deals for Charles and the PRC and maybe we can work something out, a portfolio.
Speaker B:We're a buyer.
Speaker B:That's what we're doing.
Speaker B:And we're a buyer with a purpose.
Speaker B:We need affordable housing in communities that will not let a developer come in and build affordable housing.
Speaker B:We need to go into those communities, buy those market rate deals, convert them to affordable housing so service workers in that community have a place to live.
Speaker A:Is there like a map or like a heat map or something that would show you?
Speaker A:Okay.
Speaker A:The.
Speaker A:This is where the service workers mainly live.
Speaker A:This is where we need to target.
Speaker B:Well, there are service workers in every.
Speaker B:Every major market.
Speaker C:Okay.
Speaker C:Right.
Speaker B:There's a McDonald's in every major market.
Speaker B:Right?
Speaker C:There you go.
Speaker C:Yeah.
Speaker B:There's a Walmart in every major market.
Speaker C:Right.
Speaker B:I mean, where do those people live?
Speaker A:It's a great question.
Speaker A:It's very expensive.
Speaker B:Yeah.
Speaker A:So let me ask you something a little bit more personal.
Speaker A:So is the mission just to provide affordable housing or are you going a little bit deeper with.
Speaker A:Or the goal.
Speaker A:Is it a little bit deeper to solve the issue, the underlying issue of why maybe they can't afford their properties.
Speaker A:Maybe they're just not that good at finances.
Speaker A:Maybe they have addictions or have issues that they're spending their money not wisely.
Speaker A:Is it.
Speaker A:Is that mission to kind of tackle that, or is that not even some of your reasons remotely interested in?
Speaker B:Well, I appreciate that question, but let's look at economic history.
Speaker B:And you can look at the rate in which costs have gone up.
Speaker B:Okay.
Speaker B:And come.
Speaker B:And then add inflation to that, and then look at wages.
Speaker B:Wages don't go up at the same rate that our costs go up.
Speaker B:And then when you put inflation in, it looks even worse.
Speaker B: h would have been in the late: Speaker B:I'll give you an example just based on me.
Speaker B: chool as an Engineer, I made $: Speaker B: I graduated in: Speaker B:I went to work for Johnson Controls.
Speaker B: I made $: Speaker B:My rent was $350 a month.
Speaker B:Engineers coming out of school right now, and this is considered a good job, make about $75,000 a year.
Speaker C:Wow.
Speaker B: Which is about $: Speaker B:Right.
Speaker B:The rent today, that means you want to live somewhere decent.
Speaker B: You're looking minimum: Speaker C:It's true.
Speaker B:Now that.
Speaker B:That's a good job.
Speaker B:Now just imagine if you're making $10 an hour or $15 an hour.
Speaker B:The reason that guy can't pay his rent has nothing to do with an addiction or improper use of their money.
Speaker C:True.
Speaker B:They're not earning enough money to keep up with the cost of living.
Speaker A:Yeah, no, that's.
Speaker A:That's a good point.
Speaker A:That's a very good point.
Speaker A:Because I think a lot of the times when I listen to podcasts or this that they talk about, you know, people just.
Speaker A:They have issues.
Speaker A:Right.
Speaker C:They.
Speaker A:That's what they attribute it to.
Speaker A:And I, you know, I was wondering.
Speaker B:Recently with a very, very wealthy individual.
Speaker B:I won't call his name because this story will probably embarrass him, but we were at this very nice restaurant.
Speaker B:This guy's had a phenomenal career, and literally it just kind of fell in his lap.
Speaker B:And we were talking about a portfolio.
Speaker B:He owns a huge portfolio of apartments.
Speaker B:We were having the same conversation, and he was like, well, you know, they're raising minimum wage to $15 an hour, and these people should be able to afford the rent.
Speaker C:And.
Speaker B:And I asked him, I said, at your worst apartment, how much is rent at your worst apartment?
Speaker B:And it happened to be somewhere between seventeen and eighteen hundred dollars a month.
Speaker C:Wow.
Speaker C:Good friend.
Speaker A:That's a lot.
Speaker B:And I asked him, I said, so how.
Speaker B:He didn't even know what $15 an hour equated to.
Speaker B:It's $600 a week, in case you're wondering.
Speaker C:Right, right.
Speaker B:Okay.
Speaker B:I said, so that person has to work three weeks just to live in your apartments.
Speaker B:And you think they're doing.
Speaker B:They're doing good.
Speaker C:Yeah.
Speaker B:And see, that's the disconnect between the thinking of the rich upper middle class and the poor.
Speaker B:The rich and the upper middle class, they don't get it at all.
Speaker B:Trust me, I run in those circles.
Speaker B:Right.
Speaker B:And so in their mind, it must be.
Speaker B:They're mishandling their money.
Speaker B:They don't have any money to mishandle.
Speaker B:That's the problem.
Speaker A:That's nuts.
Speaker C:Yeah.
Speaker A:That's absolutely crazy.
Speaker A:So the solution is the project PRC for you.
Speaker A:But do you feel like there's anything else that will happen or can help out these, the service workers, the people who can afford.
Speaker A:Because you're right, it's going to keep going.
Speaker A:At least I think it has to.
Speaker B:Because costs are going up, our labor costs are high.
Speaker B:We created this crisis where we can't get in inexpensive labor for a lot of reasons.
Speaker B:We can't our material costs go up?
Speaker B:We have so much that, and I'm a developer, remember that.
Speaker B:So it costs me a certain amount to build it.
Speaker C:Right, right.
Speaker B:And so I have to charge a certain amount for rent.
Speaker B:I have to because it costs me so much to build it.
Speaker B:The solution, long term, I think this is a start.
Speaker B:But we have to do more.
Speaker B:There have to be more organizations like mine and.
Speaker B:But here's the thing I want you and your listeners and anyone who cares to think about.
Speaker B:It only takes a little bit, guys, to make a big impact.
Speaker B:We have this program called our 10 for 10 program where we're asking individuals to go to projectprc.org and donate $10 and then have 10 of their friends or more donate $10.
Speaker B:And then tell those 10 friends to ask 10 of their friends individually to donate $10.
Speaker B:And in doing that, that little bit, we can provide a safety net because imagine a world where we don't have service workers.
Speaker B:Imagine a world where we don't have people who can come and cut our yards and wash our windows and clean our homes and, you know, serve us food.
Speaker B:Just imagine that world, okay?
Speaker B:Imagine a world where you have thousands of people living on the street.
Speaker B:When people become desperate, they become animal listed.
Speaker B:And I don't care where you live, it will impact you.
Speaker B:Now if you don't believe that's the case, look at some of the South American countries where that's happened.
Speaker C:Yeah, it's wild.
Speaker A:Well, I, I really appreciate you coming on here.
Speaker A:So Project PRC.org is that right?
Speaker B:Project PRC.org go today, donate $10.
Speaker B:Tell 10 of your friends to donate $10.
Speaker B:If you have $10 and 10 friends, you're golden.
Speaker A:There you go.
Speaker B:Hopefully you got at least 10 friends.
Speaker A:Hopefully you got 10 friends.
Speaker A:Well, I, a pleasure and an honor to have you on here.
Speaker A:I, I wish you the best of luck in your mission and please everyone go check out Project prc.
Speaker A:And man, yeah, it's, I was a little mis, misled.
Speaker A:I, I, but you're right.
Speaker A:If you really break down the math, they're not making really anything enough to pay their.
Speaker A:And it's honestly, it's honestly crazy.
Speaker A:That's honestly crazy.
Speaker B:And we are going to pay.
Speaker B:Don't think that we're going to escape.
Speaker B:We will pay.
Speaker B:And it's easier to just participate and try to provide the safety net.
Speaker A:You talk about food, just normal essentials like food, a cell phone, now that is normally essential for people and rent.
Speaker A:That's.
Speaker A:They probably barely got enough for that.
Speaker A:That's wild.
Speaker B:That's right.
Speaker A:Well, Charles, appreciate your mission.
Speaker A:And everybody here at the Painless Wholesaling podcast, let's do what we can to change the world for better.
Speaker B:All right.
Speaker A:Thanks, Charles.
Speaker B:Thank you.
Speaker C:Appreciate it, Sam.
