Bo Menkiti worked in the nonprofit world before starting the Menkiti Group, which renovates and sells distressed properties in the middle-market neighborhoods of Washington, D.C. The company also operates a residential real estate agency whose primary focus is helping first-time homebuyers obtain financing through local nonprofits.
One time we met with this private equity firm, and they said, "Tell me about this whole mission-based thing." I was all excited and went into my spiel about how we can have such a big social impact. Halfway through it, they cut me off and said, "OK, we're finished. We're here to make money, not change communities."
If we had developed a widget or something, we'd have a VC sitting on our board. They'd be coaching us and connecting us with their other six widget-making companies to make it more profitable. Sometimes they ask, "So, if you have a choice, are you always going to seek to maximize your profitability?" And for me, the answer is no.
In single-family homes, we have annual returns that have exceeded 25 percent. I'm not going to do things that aren't profitable. But if we have an opportunity to do the right thing and advance our mission, at the cost of another couple percent return, we're going to do that. With some banks, we don't even tell them our mission anymore. We just show them the financials.
There are also some folks within the communities who just don't like change, and they have been quick to attack us. "They're building towers of doom and lining their pockets." That's the mantra, with no consideration or understanding of the economic realities of it. Something isn't bad just because it's profitable.
Earlier this year, during a planning meeting in the Brookland community, this elderly lady cornered me in the middle of the audience and berated me up one side and down the other. "You're the worst kind, because you're one of us!" she said. "You're a traitor!"
That's been the most painful thing for me. I live here with my wife and 2-year-old, and we are part of this neighborhood, too.
A couple of years ago, we helped a couple in their 60s purchase their first home. They had just gotten married and were putting their lives back together. We were there taking pictures, and when we handed them the keys, the husband just broke down crying. Here was this tough military veteran, standing there on the steps sobbing. His wife went over to console him, and he told us, "It was only five years ago that I was homeless. I didn't think I'd even have a place to sleep, let alone my own home."
People ask me, "Why don't you just go make a lot of money? Why are you trying to be profitable and do good work at the same time?" That's why. When you believe in something, you encounter a lot of challenges and roadblocks along the way. But there are those formative experiences that keep the fire burning inside of you.