What a Real Estate Investor Owes the City It Invests In

Investors have a reputation in cities like Newark

Real estate investors have a bad reputation in cities like Newark, and some of it is earned. Plenty of firms buy buildings in a city they don’t live in, take what they can, and move on when the market turns.

Leverage Companies has been based in Newark since 2019. Here’s what we put back into the city, and where the tradeoffs are.

Jobs based in Newark

All of our teams work from one office at 50 Park Place in downtown Newark. Six departments sit on that floor: acquisitions, underwriting, processing, dispositions, marketing and technology.

Payroll is one of the biggest things a firm like ours puts back into a city, and one of the least talked about. Salaries paid to people who live in and around Newark get spent here, on rent, at local businesses and on local services.

Many of those jobs go to people from Newark and the towns around it, and many are roles where people learn the business on the job.

Training adds to it. Someone who learns underwriting, acquisitions or property management here takes that skill with them, whether they stay with the firm for five years or twenty.

Housing a family can live in

Newark’s housing is old. Nearly half of the city’s housing units were built before 1960, according to the Regional Plan Association, and many of its two- and three-family houses need real work to get back up to code.

Every property we fix becomes housing a family can live in. A vacant house with a failing roof drags down the whole block. The same house, renovated and rented, adds a household to it.

That work brings jobs to the street too: contractors, electricians, plumbers and inspectors working on houses that had been sitting empty.

Giving back through Leverage Cares

Leverage Cares is the firm’s nonprofit. It partners with charities already doing good work in Newark, with a focus on financial literacy and entrepreneurship for young people and families.

The idea is to support the organizations that already know the city’s needs, and to bring them volunteers, resources and help with the work they’re already doing.

The tradeoffs are real

Real estate is complicated, and what’s good for one group isn’t always good for another.

• Rising property values help homeowners. The families who own homes in Newark build wealth as values go up.
• Rising values can be harder on renters. Most Newark households rent, and the Regional Plan Association found that more than 58% of renter households are cost-burdened.
• More housing helps keep rents in check. Every home brought back from vacancy adds to the supply, and more homes to choose from gives renters more options.

A firm that renovates homes in Newark affects both owners and renters. We think the best way to handle that is to keep adding livable homes to the neighborhoods, and to stay in the city long enough to see what that work does over time.

What good ownership looks like on the block

Neighbors and tenants judge an owner by what they can see, and the standards are simple:

• Repairs get done. A broken boiler in January gets fixed that week.
• Vacant houses don’t stay vacant. A boarded-up house hurts every home around it, so the work starts soon after purchase.
• Properties stay up to code. Permits get pulled, inspections get passed, and the work is done right.
• Tenants can reach someone. A real person answers, and that person knows the property.

Those standards apply to any owner in any city, and they’re easy for a neighbor to check.

What to look for in any investor

If you’re judging any real estate investor in your city, ask where their people work, what condition their properties are in, and whether they’re still around when the market gets hard.

The investors worth trusting have real money in the city and an active interest in it getting better. We’ve been here since 2019, and we plan to stay.