Impact Investing That Actually Pays | Workforce Reentry Multifamily Strategy Explained

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In this episode of the Real Estate Pros Podcast, host Micah Johnson interviews David Summers, founder of the Hope Housing Initiative. David shares his personal journey through the criminal justice system and how it inspired him to create a multifamily housing platform focused on helping individuals reintegrate into society after incarceration. He discusses the importance of stable housing, the support systems he has built, and the financial incentives that make his model sustainable. David emphasizes the need for community support and partnerships to address the housing crisis for those reentering society, while also highlighting the profitability of his impact investing approach.

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David Summers (00:00)
that’s the most important part. That’s the stability. ⁓ So I’ve created what I call the stability triangle, right? So ⁓ when I got out, I had a house to come to. ⁓ So that was number one. Number two, I had a good job. I was working. You have to be in there a minimum of 18 months and then you save 38 % of your check is what’s called forced savings. So ⁓ during that 18 months,

minimum that you’re in there, you acquire money, you save your money. So I was able to come home to a house, which was stability. I had a good job. That’s number two. And I immediately got a vehicle. So that’s what I call the stability triangle.

Micah Johnson (02:15)
Hello everyone, welcome to the Real Estate Pros Podcast. I’m your host, Micah Johnson. And on today’s episode, I’m joined by David Summers, who’s been making some serious moves in impact investing for quite a while now. David, welcome in, man. Glad to have you.

David Summers (02:29)
Hey, how’s it going? Thanks for having

on.

Micah Johnson (02:31)
Absolutely. Absolutely. I’m excited for our talk today. ⁓ You’re working on a project that has many outcomes and tremendous impacts that are good for multiple parties. So I’m excited to dig in on it, share your story a little more, expose folks to something that could be an opportunity for them as well. So for those who aren’t familiar with you yet, let us know. Tell us some more about yourself and what your main focus is right now.

David Summers (02:57)
My name is David Summers. the founder of Hope Housing Initiative. I’m building structured multifamily housing platforms focused on acquiring, repositioning workforce reentry properties here in the Midwest. So basically we’re looking for properties that we can obtain and help with the reentry problem, bring in the guys that are coming in from the work release facility out of the federal.

and the state work release programs, basically re-entry back into society. ⁓ That’s the market that we’re focused on. It’s a big market that definitely needs ⁓ attention and is very important.

Micah Johnson (03:42)
Well, take us back, man. What led us to where you are today? What put this mission on your heart?

David Summers (03:47)
Yeah, okay. it’s a pretty personal for me. I’m the lived experience. ⁓ so I went through the criminal justice system and, ⁓ I came through the work release facility and when it came 60 days out to be released, I started applying for housing. So I kept applying and then I would tell him, Hey, I got a felony, you know, that’s fine. That’s, that’s no problem. Just go ahead and apply and, know, take your application or whatever.

He’s talking about 50, 60 bucks a pop every time. So I did that about six times, kept getting denied. And finally, I’m just like, all right, at this point, I feel like I’m being extorted. ⁓ So what I did is I reached out, I went on a few different platforms. I’m not going to say the names here, but some some really popular ones for houses, fine housing and stuff. And I went on and I just told my story then like, hey, I just did 10 years in prison. ⁓ I got four teenagers I got custody of.

I’m getting out, got $35,000 saved up from work release. I’ll put three months rent down. I’ll do one month, ⁓ three months worth of rent and then the deposit. I just need a second chance, you know? And

this lady reached out to me and she’s like, it’s very brave what you did. Took a lot of guts and grit. And she’s like, I want to give you a chance. And that was about a year and a half ago now. ⁓

great, started my own financial company. I work full time as a robotic and electrical specialist. And I started this Hope Housing Initiative just to help people so they have an opportunity for fellow and friendly housing and programs, everything they need to succeed that I didn’t have when I was coming out. I’ve seen a huge need for this market. And I am capitalizing on that and just trying to.

help people and at same time we’re for profit, very profitable ⁓ and doing a really good thing for people. So that’s just kind of where it started and where it’s going right now.

Micah Johnson (06:41)
Right on, man. So you’ve lived it out from that experience. What does having a stable place to go like, what’s it really do for the person that’s coming out that it’s reintegrating into society? How powerful is that?

David Summers (06:57)
that’s the most important part. That’s the stability. ⁓ So I’ve created what I call the stability triangle, right? So ⁓ when I got out, I had a house to come to. ⁓ So that was number one. Number two, I had a good job. I was working. You have to be in there a minimum of 18 months and then you save 38 % of your check is what’s called forced savings. So ⁓ during that 18 months,

minimum that you’re in there, you acquire money, you save your money. So I was able to come home to a house, which was stability. I had a good job. That’s number two. And I immediately got a vehicle. So that’s what I call the stability triangle.

I’ve studied it and they said there’s a 50 to 70 % reduction in recidivism when you have that stability triangle. But the number one thing is housing. You have to have a home somewhere lay your head.

because that’s where all the rest starts. So housing is the most important step in reducing recidivism and making your city safer and place safer.

Micah Johnson (08:04)
And what markets are you focusing on right now to bring this to life?

David Summers (08:09)
So we’re focused on multifamily right now because I’m partnered with different people in the community. ⁓ We have like I’m offering the financial ⁓ partnership. So what I’m doing is I’m helping guys with credit building. ⁓ I’m helping guys with budgeting. And then I have some mental health that I’m working with. I have drug and alcohol counselors I’m working with. Family reunification that I’m working with. ⁓

We got some lady that does like, teaches life skills. So basically these are, this is independent housing, private model, independent housing. I’m partnered with parole. I’m partnered with the federal work release facility. Basically just the programs are optional, but we want to offer those to our tenants, right? Because we want to help our tenants as much as we can, right? So that being said,

this, I engineered this because I knew once I brought this to the public, to private investors and stuff, I knew that they’re going to be like, guys coming out of prison. that’s risky. You know, so the way I engineered this was we have specialized, we have specialized lease agreements, right? So I take a double deposit. Well, one is the deposit for whatever the first month’s rent is, is a security deposit.

and I do first month’s rent and I do equal to the security deposit I do is called a program fee. So that program fee in that deposit, those are returnable upon a 12 month lease. So ⁓ it becomes a monetary incentive, but then also it becomes a behavioral incentive to where, ⁓ hey, if you do good at the end of your 12 month lease, you get your ⁓ lease money back,

you get your deposit back plus you get your program feedback.

At that time after they do a 12 month lease Say hey, I want to stay then you still get that program feedback, right? So then we would just keep your deposit and then put you on like a six month lease so it’s not like we’re out of here trying to Like say oh you have to the program fee and then like you’re paying up front. So what that does is that creates? What I call monetary generation events, so let’s say that you’re three months in

and you have a violation, right? You fail a UA or something. We have a zero tolerance policy to where any violation is removal. There’s a three day eviction. You’re removed from the program and then all of your, ⁓ the proceeds, your deposit and everything that’s forfeited to the program. Right. So those risk events for a normal landlord that become risky, ⁓ they become for us a monetary generation event to where we can go in, fix that property up.

within a short amount of time and we can get another person in there from the program. So that’s one of the big risk mitigation.

Micah Johnson (11:49)
What’s interesting and so.

there’s a regular flow of people, it’s not, I mean, we, I hate to just say call it leads, but leads are what we’re looking for when we want to rent our stuff out to people and who’s going to come in. And you have this regular flow where, you know, what kind of ideas can we get rid of for people that are listening to this about, you know, that are thinking, you know, okay, you know, I don’t want to risk that. I don’t want to do that.

What are some things that are not true that are get commonly thought where you can help dispel that a little bit and open more eyes to, this isn’t just a good deed you’re doing. There’s a monetary value here. There’s people that always need a place. We can get the house. It’s still the investment.

David Summers (12:37)
Yeah. So our model is simple, but it’s a very disciplined, right? So it’s disciplined for the fact that I go in. So a guy applies for help. I was an initiative. I go meet them when they’re, ⁓ right. 60 days out, they can start looking for a house. Right. So I go meet as soon as they’re available. say, Hey, like right now I have two duplexes available. So I go in and say, Hey, I have a duplex available. ⁓ so I go in and there’s only two things that

⁓ really well three things that you have to qualify for. For one, we don’t place sex offenders and we don’t place arson people that have arson cases. So other than that, the only other qualifying thing besides those two is we require five to $10,000 at the time on your books at the time of the interview. That way we know you can pay the rent, the personal rent and deposit and stuff in the program fee.

So I’ll go in, I’ll do the interview with the guy. ⁓ If everything looks good, checks out, they sign a specialized lease agreement. There’s a few different forms they fill out. ⁓ And then we get them in there. I get with the unit teams, new team manager, and we get the check cash. We get it out and we get their place set up for them, ready for them to come home to. ⁓ So a lot of discipline goes into this to where… ⁓

We just focus on the fundamentals really, workforce level rent. We do the median rent for the area and then we put a 10 % charge on that. And that just helps out with stuff. That just helps out with a bunch of different things. ⁓ We have zero tolerance lease enforcement ⁓ with the three day eviction notice. I’ll go in, say if there’s any violations whatsoever, parole would get a hold of me. ⁓

there’s any violations on my side, I would get a hold of parole and basically any violations at all, they get a three day eviction notice that happens. It just creates accountability on both sides. There’s a lot of risk mitigation there and people are thinking like the normal landlords, they got to advertise and stuff like that.

I have a pipeline directly partnered with the federal work release and the state work release facility.

So that’s not an issue for me. I don’t have to advertise. I have a pipeline directly. There’s literally guys waiting for housing. It’s really hard for felons to get housing, right? And I talked to a landlord and he goes, yeah, he goes, you know, I’ve got 10 people applying for a house and one of them’s got felonies and they’re just getting out. And he’s like, I’m going to skip that every time.

You know, and that’s when I knew right there, like, I have to do something, right? And this is my way of, ⁓ it’s a private ⁓ landlord scenario, it’s private ⁓ placement and it’s private investor. And I wanted to go for profit because nonprofit, there’s too much competition and too much oversight. And we wouldn’t be able to move as fast as we do. There’d be a bunch of red tags.

So this is the plan I engineered and this is the ⁓ workforce development that I developed.

Micah Johnson (16:50)
It’s powerful

man, because again, you found a niche that needs service. You found an area where no matter what people are coming out and they need it. They need the second chance. They need the place to live. you don’t, I you don’t even have a lead problem. You got a house problem, right? You’re over here trying to, the more houses you can find, the more, the more people that you can take care of. And I’ll tell you what you did for me. I didn’t realize that that amount of money would be saved up when they’re coming, when someone’s coming out.

I never knew that. like, you’re obviously thinking, well, you haven’t been working. You’ve been in jail. You haven’t been working quote unquote. You don’t have any money where, okay, that’s a common one. You just really dispelled because again, you’re not, you said you don’t work with sex offenders. You’re not working with arsonists or you’re immediately getting that out of there. I know this. mean, if you’re getting qualifying for work release, you’re not the, you’re not the kind of person you probably should be most worried about anyways, right? Like processing it down the understanding of

There are people that are incarcerated and then there’s the reasons why they’re incarcerated and what they get to do after you’re literally filling that gap and showing one, if you can do this, our society gets better, right? If we can pull this off, society gets better. Cause look at yourself, man, if you went in and spent 10 years and now you have the job, you have multiple businesses that you’re running, right? Like that, that’s how it’s supposed to work. I’m hoping.

Right. That it gets the second chance. You get to come back out, you get to participate in life because it, I mean, it shouldn’t hang around our heads forever. It’s especially if you’re doing all the things to show I’m trying, I’m literally trying because there is a, I mean, a negative cloud around it where, well, you’re a felon, right? Like even when you say the word, there’s, there’s like a little bite to it when you say it, you know what I’m saying? Right. There’s like a little poison in there. So I love the fact that you’re able to.

David Summers (18:22)
Yeah.

Definitely.

Micah Johnson (18:44)
Really feeding two birds with one seed, man. You’re able to solve a housing, actually more than one, really more than two. You got this program that’s increasing people’s stability, which will only benefit different landlords later. Right? Like they’re learning how to do this in a proper way. You’re giving investors the ability to buy in and deliver properties where they can make the money. I mean, we all want to make money doing what we’re doing, but if you get that emotional paycheck,

David Summers (18:58)
Yeah.

Micah Johnson (19:11)
paid at the same time as that financial paycheck, I recommend it. That is the one of the best ways to make money is to do that in a way where both of those get solved, especially with the guardrails you’ve built around it. Right. It’s not like they’re just coming out and getting left on their own. They’re having to come in and then participate in something. It’s a, it’s a regimented process, which protects investors, protects the person themselves. Right. It really, man.

David Summers (19:15)
Yay!

Micah Johnson (19:40)
That’s awesome. Good job. I’m kind of a loss for words there because that’s a powerful project you’re working on.

David Summers (19:45)
Thank you. And I’m glad you brought that up. So there a lot of people are surprised, right? They’re like, so there’s this big connotation that, ⁓ people were in prison and we’re paying for them and everything like that. Well, I’m an electrical specialist and I worked for, did private industry. ⁓ I worked at ⁓ a beef plant, right? I was making $21 an hour. So they were saving that money, from prison, private industry, right? I did that for like two years, came to work release and

I make $40 an hour and what’s good about that is they do for savings. So they take 38 % of your gross. Right. And we pay rent 25 % of our gross to rent to the state. Right. So it ain’t like the people who work with lease are like the best of the best. Like you were saying, you got to like, got it. There’s so many programs you got to do. You got to be work ready. Um, you got it. Like it’s literally the best 2 % of the state. Right.

So that’s how the state one is. The federal is you have to have like so many things that you have to do also, right? So it’s not like, you know, guys are just getting out with no, they work hard to be there, you know? So you got to have that want to be successful. You got to that want to change. I’ve seen guys get out with over hundred thousand dollars. Like I got out 35,000, but there’s a lot of guys, 60, 70, 80,000 on average.

because they’re working on private industry jobs for years and then they go to work release and they get jobs in the community, right? We take the buses, places, like we’re in the community. And when I I went and spoke at the college and I told him like this, I said, whether you guys like it or not, there’s 585 to 655 people per year in Sedgwick County alone that are getting out of prison. Now, would you rather these people be out just getting out, thrown out there?

fending for themselves or would you rather them being in a program? That’s why I focus on multifamily. If I can get people together in a multifamily unit, eight to 12 to 50 unit apartment complex, then I can offer the programs to help people. They can come in and get the help that they need and they’re right there in the community. They’re going to be out there anyway, so why not be out there getting help? People know where they’re at, know what they’re doing, know that they have support.

And that’s like the biggest thing like right now, as far as the criminal justice system is, that’s exactly what happens. They bring us in there, they help us save money, but then they just kick us out. Like go look for a house. You know, they don’t offer no aftercare, no support, nothing like that. So that’s just one of the gaps that like, you know, they say if you, can find a job that you love doing that you never have to work a day in your life. And I would say that as an impacting investor, like I love what I’m doing. I love helping people and it’s, it’s,

It’s good money, right? Good returns, ⁓ vacancy control, risk mitigation, operational discipline there, rent stability, have stability from the pipelines that I’ve created. So it’s really, like you said, a lot of people just don’t know. So I think there’s some shock and awe there when I tell investors like, yeah, like we’re in this work release facility and we’re saving money and we’re basically ready to get out.

and do good, just until I came along, there’s really no options for that.

Micah Johnson (23:13)
Right.

Yeah. mean, there’s, there’s, that’s the, that’s a good benefit of it, that you’re coming out with the ability to establish yourself. And now you’re plugging in this gap of the place to actually go establish yourself, right? That, that middle environment where you’re coming from one to the other gets a move down to the world. Now, is there a limit to how long you’ll lease to them or is it, they can stay for as long as they want. ⁓

David Summers (23:37)
So, ⁓

there’s a, they can stay as long as I want. So what I do is there’s a one year lease and what people need to realize too is like, I’m a landlord, right? But I’m offering all these programs and stuff and specialized leases. at end of the day, like this isn’t sober living. This isn’t, ⁓ like anything like that. Like this is literally like, I’m the landlord, ⁓ you know, I’m the manager. So.

This is like people are all the time like, yeah, like sober living, blah, blah, blah. No, this is optional programs. This is independent living. They have their family there. You know, they just got out. They’re on their own. I’m just offering the support, right? So that’s one thing that I need to get out there. A lot of people think that it’s some kind of like state controlled or government ran program or something. It’s not at all. It’s for-profit personal investments and partnerships.

Micah Johnson (24:20)
Right.

David Summers (24:35)
Right. So that’s powerful man. And it needs to be like that to be able to scale and take care of itself. And that’s how that’s how I’ve engineered it to be able to be scalable because it’s a huge problem. And really, like you said, my biggest problem right now is housing. I just I need to get more partnerships. ⁓ I’ve been out for over a year now, but my credit, my average credit is seven months. Right. But I have like a good credit score over 700.

but I don’t qualify for lot of stuff because it’s not aged credit, right? ⁓ So that’s one of the barriers I’ve been running into. So I’ve been trying to like get a lot of partnerships, you know, so that way, or I got a couple of properties that I mastered lease, which is really good for investors, you know, that I do all the operational control, all the operational and I do all the risk mitigation and everything. So that’s one thing that’s working out very well for us.

Micah Johnson (25:35)
love that, man. I appreciate that mission. I appreciate you sharing your time, your story, your perspective with us today because it’s shining a light on an area of a market that nobody really looks at too often. And you’re clearly showing that there’s this opportunity there. So for those out there listening and watching in, they’d be interested in touching base with you, finding out more. What’s the best way for them to get a hold of you?

David Summers (25:46)
Yeah.

So if you go to Facebook, Hope Housing Initiative, if you just search that in the search bar, you’ll see me on there. I got a suit and tie on there. I’m a businessman. I got two business degrees while I was in prison also. I figured if I was in there and I wasn’t making the best of my time, then I was wasting my life. So I was a mentor in prison.

I got, like I said, two business degrees, I business management degree and I got a business degree. I taught several classes, seven habits of highly effective people by Stephen Covey, four day laws of leadership. I’ve just really, really worked on myself to get in a position where I could help people, right? So we got Hope Housing Initiative on there, on Facebook. And then if my, like I said, I own a financial company that I started and that’s www.FamilyFirstFinancial.biz or I’m also on Facebook on that Family First Financial Management Services, LLC. You search me on Facebook. I’m on there. Directly if people want to get a hold of me, David Summers, Wichita Kansas on Facebook also.

Micah Johnson (27:14)
Excellent, man. We’ll make sure your links are there. So if you’re watching or listening in, check the show notes, you’ll be able to find David’s links there. If it’s a project that gets your heart sparking, reach out to them, touch base with them. There’s a lot of opportunity in an area where again, you can do two good things. You can help some folks out and make good money, which is when you knock those two out at once, that’s a pretty enjoyable pairing. If you ask me. Well, David, thanks again for being here, man.

David Summers (27:40)
Yeah.

Micah Johnson (27:43)
Thanks everybody for joining in with us on this episode. If you got value out of it, please like this episode, share it with someone else you think can get value out of it. And as always, if you don’t please subscribe to our podcast. We appreciate every single one of you out there that follows along with us. have more conversations coming up with operators just like David out there building something real in the industry. Thanks for being with us. We’ll see you on the next episode.

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Impact Investing That Actually Pays | Workforce Reentry Multifamily Strategy Explained

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