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Show Summary
In this episode of the Real Estate Pros Podcast, Doug Diakite shares his journey into the real estate industry, detailing his transition from a mortgage loan originator to co-founding Nationwide Community Revitalization, LLC. He discusses the importance of partnerships, the growth of his business, and the strategies they employ to help clients with damaged credit achieve home ownership through a lease-to-own model. Doug emphasizes the significance of integrity in partnerships and offers valuable advice for aspiring investors.
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Investor Fuel Show Transcript:
Doug (00:00)
Don’t wait too long because the older you get and the farther down the path you get the harder it becomes Now you got a mortgage now you got kids like I started my businessBefore I was married before I had kids and before I owned a home and so my bills were super low I had really low overhead and even though it still a terrifying decision to walk away from a good-paying job
my bills were super low, so that made it easier.
Kristen Knapp (01:57)
Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Doug Diakite, who is the co-founder of Nationwide Community Revitalization, LLC. We’re going to get all into his lease to own model. It’s very interesting. So thank you for being here, Doug.Doug (02:10)
Absolutely, thanks for having me, Kristen, and excited to talk to you today.Kristen Knapp (02:13)
Yeah, so let’s start at the beginning. How did you fall in love with real estate and how did you get into the industry?Doug (02:19)
did I fall in love with real estate? am coming out of the 2008 crisis I was actually looking into becoming a mortgage loan originator.And ⁓ I called a guy who had run my company that I worked for in college and said, hey, can I come work for your mortgage company? And he said, Doug, this is the absolute worst time to consider trying to be a mortgage
originator. I’d love to work with you again. I’d love to bring you on to my company, but I don’t even know if my company is going to be here by the end of this year. So he introduced me to a friend of his who was starting up a loss mitigation asset management company. And that company ⁓ specialized in acquiring large pools of non
performing mortgages. And at the time I had no real estate background, knew nothing about mortgage, very little finance background, and I said you know if that’s where you think I should go start my real estate journey then that’s where I’ll go. So I started over there and I took a job making $2,500 a month and started learning real estate mortgage finance from the ground up there.
Kristen Knapp (03:21)
wow, I you learned a lot, you know, starting in that way.Doug (03:24)
Yeah, it was an excellent opportunity.I said, the pay wasn’t fantastic, but I knew coming in that the goal was to learn the business, learn about real estate, and ultimately one day hopefully have my own company. So that was back in 2008. within a few years I’d moved up in the company. I was starting to make a good living for myself, and I started to think about what was coming next for me. And I thought to myself, if I stay here for another five years,
Am I going to be happy? Am I going to be earning more? Am I going to be learning more? And the answer at that time was, I think I’m going to be in the same exact spot, and I don’t think I’m going to be happy with that. And so I started to think about, OK, where am I going to go? What’s my next move? And I was able to partner with the partner I’m still with today. And he and I launched out on a journey working together in Q1 of 2014, so a little over 11 years ago.
Kristen Knapp (04:22)
Wow, I mean, how did you guys meet each other? I like that’s very serendipitous to just meet a partner that ended up working out so well.Doug (04:29)
It wasextremely serendipitous. he was a buyer of assets. before I had even started working at that company, he had started up his own real estate business. He was a flipper. He was a buy and hold guy. And so he had already grown a pretty sizable portfolio by the time his and my paths crossed in 2012 or 13.
And so he called up one day to see if he could buy any assets from the company that I was working for.
I started talking to this guy and I’m like, wow, this guy is maybe five years older than me and he already has a successful business and he’s already kind of doing what I see myself doing or what I’d like to be doing. And so I invited him out to lunch. He said no.
And I felt kind of dejected, but I said, all right, we’ll put that on the shelf, we’ll revisit it. So I came back around a year later, the second time he agreed to go have dinner with me. And so we met, we went out for dinner twice. He said, Doug, I’m not gonna be able to bring you on as an employee to offer you any type of salary close to what you’re making right now, but what I would like to do is start a partnership with you from the ground up.
Kristen Knapp (06:26)
Wow.Doug (06:27)
And that’s where my life changed. That’s where he and I decided I was gonna take the leap of faith and walk away from my six figure salary at the company I was working at and give it our best shot. And so, yeah, within a month we were working together and ⁓ it was very scary. Yeah.Kristen Knapp (06:45)
Wow, I mean to go from himrejecting your lunch invitation to wanting to partner with you, those two dinners must have gone really well. ⁓
Doug (06:53)
They reallydid. You know, I think we both were like-minded, both hardworking guys, both had big dreams, big vision. And ⁓ he had had a lot of partnerships up to that point that hadn’t gone so great. So he kind of knew what he wasn’t looking to partner with and our personalities connected and we just had a good meeting of the minds. And so we both came away just feeling like, okay, I’d like to work with that person. And yeah, we were off to the races.
Kristen Knapp (07:20)
That’s incredible. So you’re working together just a month later. How did you come up with this model that is now Nationwide Community Revitalization?Doug (07:29)
Greatquestion.
When I left my job, the idea was we were going to buy non-performing loans, because that’s what I had been doing for the last five and a half years. And that’s what he had kind of been investing in over the two years leading up to him and I working together. So we’re like, we’re going to pool as much capital as we can put together. We’re going to go out and instead of buying first position mortgage debt, we’re going to target second position mortgage debt, because those are a little cheaper. And you can stretch your dollars a little further. So that was like the original idea long before the rent I owned leased
thing came about. So we started there, we bought some pools of loans and we were working those assets and it was fun and that’s what I kind of knew how to do. That’s what that was what my expertise was at the time. And ⁓ so we were doing that tinkering away and then ⁓ a third partner that ⁓ I had known from working at my other job, he was an asset manager who had gone out on his own.
and he was running his own little business doing seller financing stuff, doing lease option rent to own stuff. And my business partner said, hey, what’s that guy doing? Cause he tried to sell us an asset. We looked at it and we’re like, we don’t really want to buy that, but maybe we can meet with him and kind of find out more about what he does and go from there. So we took him out to dinner and by the end of that dinner, we each had a beer and we…
Kristen Knapp (08:40)
Yeah.Doug (08:49)
again felt the meeting of the minds andboth felt like the three of us could all bring something unique and valuable to the partnership. And so we walked away that night as partners and started the rent to own business that we’re now doing 11 years later.
Kristen Knapp (09:03)
Wow, that’s incredible. You’ve really just had great luck with meeting great partners. I mean, I feel like it’s so that’s usually the hardest part. ⁓Doug (09:13)
Yeah, I would agree with that. ⁓ I have been pretty fortunate. I think when you meet someone and you just kind of connect and you get to know them a little bit, you can kind of get a feel or a sense of, do I trust this person? Do I think this person’s gonna do what they say they’re gonna do? Do they have integrity? And then do we think the personalities can go well together? And, you know, with both of those two men, it was a yes and a yes across the board.Kristen Knapp (09:34)
Yeah.Doug (09:42)
And so we knew like ⁓ we’ll start small. That was the other thing I will say. We start small with just let’s do a few assets. Let’s do a few deals together and kind of see how it goes. We didn’t even set up the LLC right away. It was kind of like, let’s just form a partnership. We’ll drop a partnership agreement.We’ll do our first handful of deals together, see how those go, and then we’ll take it from there. And that was how we started both of those two partnerships. And after we did the first handful of deals, it was like, yeah, this is working really great. We’re having fun. We could see the vision in front of us. Let’s go for it. And then we grew from there. And eventually, we got those LLCs entities created and ⁓ kind of dialed in the…
the documentation and all the technical formalities. yeah, it starts with finding good people that you can see yourself working with and ⁓ that’s a good start. Good place to start.
Kristen Knapp (11:06)
Yeah.Yeah,
I mean you obviously have such a great gut at establishing these partnerships. What would be something that would be kind of a red flag to you?
Doug (11:21)
That’s a good question. think if you’re sitting down with someone and they say something and later on they say something and it doesn’t match up in your next call or your next conversation, I think that would be one thing where you’re like, okay, this guy’s saying one thing and then…and then now it’s something kind of different. you kind of note that. And then if you have a couple other little things like that, then you can kind of know, yeah, do I want to go further with this person? Probably not. think there’s better, there’s more fish in the sea. There’s probably someone better out there where I don’t have that uneasy feeling that I’m not getting the full unvarnished ⁓ truth from this person. Because really at the end of the day, the integrity is the biggest piece.
The last thing you want to do is invest all this time effort energy into a partnership where you don’t fully trust the person And you don’t have that feeling of like okay this person does what they say they’re gonna do this person has integrity so that that would be kind of the one thing is anything that they show you or reveal in those first few conversations that kind of seems to indicate that there may be an integrity issue I would say steer clear there
Kristen Knapp (12:30)
Yeah, listen to that for sure. Yeah, and so just tell us more about the company. Tell us more about kind of what you guys are doing.Doug (12:31)
Yeah, follow your gut there.So what was really cool, I think, initially was, you’re having a good time building this business from the ground up, but you don’t have anyone that works with you ⁓ other than your partners. So the three of us are doing all the jobs and wearing all the hats. And so that’s fun in the beginning. And then you realize, OK, we’ve got to start delegating some work. We’ve to start handing some of this off and bringing some new people on.
And that part of the business is really fun as well because you’re like, we have the access to capital. We have the access to the inventory to buy the assets, but we can’t do this. If we really want to grow this business and into a significant size company and grow this portfolio, we need more. We need more help. And so we started off by bringing on asset managers. So the asset managers, their role is to come in. They market the properties.
So like we’ll put a property up on say Zillow. We’ll say, we’ll advertise a rent payment. This one’s thousand bucks down, $800 a month. And then they’ll start taking inbound phone calls. And when they vet those people over the phone, they do like a basic screening over the phone. If the basic qualifications are met there, we’ll give them a code. They go check out the property. Then if they like it, they submit an application. We go through the whole screening process on the app. And if we want to
offer this person the opportunity to come in and do our rent to own program, ⁓ then they help with all the closing paperwork and all that stuff. And then that asset manager then works with that family.
in perpetuity through the program. like if they get into trouble, they’re like, I can’t make my payment. You know, this happened. This is my hardship. They’ll call this asset manager that helped them get into the home. And so they’re with them for the full life cycle of the program. So that was where we started. We got the asset managers in place. And then in the following years, that’s where we started to add support staff operations, renovation, maintenance people, ⁓ collections people, eviction.
team members to handle each of those separate functions and roles. ⁓ so watching this team grow and having the people, like I said in the beginning that ⁓ we just love working with every day is so great. And… ⁓
And then for me personally in this business, if we’re talking about recruiting and hiring, one of the biggest things for me was
already had like a team of, I don’t know, six or eight people. And my partner said to me one day, said, Doug, you’re like burning the candle and like going so hard and handling so much stuff that you shouldn’t have to be working on and doing. He said, you need an assistant. And I said, yeah, you’re right. But you know, it’s so funny. It’s like you would think you would be anxious to kind of hand off some of this work that you don’t want to do.
But when you’ve never had that and you’re used to doing it all yourself, it’s actually a lot harder than one might think. And so when we were hiring for another position, there was a guy who really stood out to us. His name was Kevin.
And Kevin, we said, you know, we don’t have the exact role for Kevin today, but why don’t we start him as the assistant and see how goes. Kevin was early twenties, bright guy, and we just saw so much potential in this man. And so Kevin started working as my right hand, no real real estate experience to speak of. And within fast forward three, four years, he was doing 80 % of the work that I used to do. And now he’s literally my right hand man.
He’s my partner, Jeff’s right hand man, and he kind of runs 90 % of the day to day of our company and has become the most valuable person that I’ve probably ever worked with outside of my partners. So, yeah.
Kristen Knapp (16:53)
That’s amazing. Yeah, you’ve been able tobuild a really impressive team around you. And kind of in the beginning when you were talking about working with inbound, how do you decide if someone is, if you want to work with them on a lease to own basis?
Doug (16:58)
Yeah.You know, really for us, comes down to we’re working with damaged credit folks, right? And so, you know, we’ve helped people in the 400s, 500s, low 500s. And what we look for most is income. Do they meet the minimum income requirement, which typically for our properties is 4X the monthly payment amount in net income. And so we start there. Do they have the minimum income requirements? So that’s number one. Number two.
we’re looking at how long have they been on their job. You know, if they have a good job history and they’ve been at that job for several years, that gives us a good feeling that despite the poor credit, they had consistency at that job. So that’s a good thing. Number three, we look at ⁓ their rental history. So a lot of these folks are moving from like a one bedroom apartment into a single family detached home that we provide through our program.
So it’s a really sweet opportunity for these families to get out of these little cramped apartments. Now they have a yard for their kids to play in. Now they have three bedrooms instead of one bedroom. Now they have a couple bathrooms, right? So we’re excited to offer that opportunity, but we do want to see what have they been paying in rent, right? So like, we don’t like seeing like people that have been paying $300 a month now coming into ours, it’s going to be an 8.95 a month payment, right? So what we’re looking for there is, you know, do they have a long…
consistent history at their last one or two places and have they paid a payment that’s somewhat close to where our payments gonna be. So that’s number three. And then most importantly, I would say their resourcefulness because these homes are distressed. They do need some work, a lot of it’s cosmetic work, but they do need to be able to come in and do the necessary maintenance and repairs to the property.
Kristen Knapp (18:37)
Right.Doug (18:55)
So part of our application process is what are your qualifications and your experience to be able to do what this home is going to need. We talk through what their plan is. We make sure if it’s not them, that it’s their uncle who lives down the street and that he’s walked the property with them and he’s committed and he’s seen the property and he knows what’s involved and he’s committed to helping them. So that’s kind of the whole picture of what we’re looking for. And if they check all those boxes, we’re happy to give that family the opportunity.Kristen Knapp (19:23)
I mean, I feel like this is such a good example of a model that’s really a win-win. Because I feel like it’s such a good investment for you guys. And I want you to talk a little bit also about kind of what happens with these rent payments and at what point are they, you know, looking to buy. And you guys, I know that you guys help with the financing. ⁓but it really is a great investment for you. And then on the other side, you’re doing great work for other people. Other people’s lives are really changed by the potential of home ownership.
Doug (19:57)
Yeah, absolutely. We love the fact that we have a win-win opportunity here that we’re working with. I it feels like you can’t really have a long-term, sustainable, successful business without being able to create these win-wins, right? Because if your whole focus is how do we win without any regard for how does everybody win that you come across and work with,that’s not going to work out in the long run. You might win in the short term, but it’s not going to work in the long run. that’s what’s been one of the really beautiful things is, you know, seeing these families that came to us again in the 500 credit scores coming out of the apartment, you know, they have a few kids and now all of a sudden they can see homeownership as an actual achievable dream versus just, you know, a dream that’s for someone else because they’ll never be able to get it. So now they can see it, now they can visualize it and it’s right
in front of them as long as they make all their payments.
Kristen Knapp (20:54)
Amazing, yeah, and walk us through kind of what happens throughout the relationship with these people.Doug (21:00)
That’s a good question. you know, it’s not all sunshine and butterflies and rainbows, as I’m sure you can guess and imagine. ⁓ So we do have people that hit stumbles along the way, which, you know, is expected. And like I said, our asset managers are working with them as their single point of contact along the way. So for us, like the big thing that we try to stress upon with these folks is like, when you come into our program, ⁓Life’s gonna happen. You you’re gonna get hit with some financial problems and unforeseen things that are gonna come up and we know that. That’s how it is for everyone, right? And so when that happens, we just encourage you to communicate with us. We encourage you to let us know what’s going on so we can help. And if you do that, we’ll do everything in our power to help you, right? And so…
For those folks that take our advice and they actually don’t bury their head in the sand and come to the table and say, look, my car broke down and I had to spend $800 to fix my car that I wasn’t planning on. What do we do in that situation? Well, typically we’ll look at what is their current income and can they afford to do a repayment plan where we put their balance and we stretch it out over a six month, 12 month, 18 month time frame so that they can repay whatever payment they missed.
over that time frame and get back on track. So that’s one of the things we do. Another thing is hardship package is we’ll have them submit an application that lets us know their current financial situation. And then by submitting that we see if they’re working in good faith. And then in some cases we can offer them a reduced payment plan, which is nice because we’re like if they can’t in some cases like if they can’t afford the regular payment like adding to it’s not going to work out. So let’s see what they can afford and see if we can make it work to offer them a reduced payment plan. And now if we’ve tried everything
and they lost their jobs, let’s say, and they can’t afford to make any payment anymore. Well, you tried your best. We’d like to help you with relocation expenses, so we’ll offer cash for keys, relocation assistance. A lot of your audience, I’m sure, has heard these terms. And we can help them that way. Help them land on their feet at their next place and ⁓ have a soft landing and get a fresh start. So those are all the ways that we kind of come in and try to help when they hit their stumbles and struggles. And we’ve had a lot of success.
working with people that way because a lot of them are used to the banks who go, if you can’t pay, you gotta go. And that’s it, right? And so if you give them a suite of options and different ways that you can come in and help, a lot of them appreciate that and will take us up on the help and we can get them back on track.
Kristen Knapp (23:32)
Yeah, you guys definitely have just like a human approach to it. You can tell it’s a company that cares. Yeah, well this has been awesome. I mean, we’re already hitting the end of our time, but to kind of wrap all of this up, I would love for you to share maybe a piece of advice that you wish you knew earlier in your career that you can share with everyone else.Doug (23:36)
Absolutely.Absolutely, absolutely.
Wow,
let’s see. So I would say the best advice in terms of starting your business is it’s most likely gonna be, you wanna have some base level of experience and competency so that you can bring skills to whoever you’re gonna try to partner with or work with or try to get to invest in you, invest with you.
⁓ But once you’ve kind of gotten that base level in that foundation
Don’t wait too long because the older you get and the farther down the path you get the harder it becomes Now you got a mortgage now you got kids like I started my business Before I was married before I had kids and before I owned a home and so my bills were super low I had really low overhead and even though it still a terrifying decision to walk away from a good-paying job
my bills were super low, so that made it easier.
So I would say just looking back at my path and my journey, going early was the move for me. And I think that’s applicable to most investors is figure out how you’re gonna get that base level of experience and then get out there and give it a shot.
Kristen Knapp (25:09)
Well, I think that’s such good advice. mean, you’ve been able to, you know, fill in the blanks of this model. I mean, it’s just a very impressive model and you guys have built something really special. So thank you so much for being here today.Doug (25:22)
Awesome, thank you so much for having me. This was fun and I hope…some of your audience can take something away. And one last thing I did want to share with the audience is we are looking to work with and partner with younger up and coming investors. Our preference is we’d like to try to work with investors who’ve got at least a few deals under their belt so they kind of have some experience. But we are looking to help some of the up and coming aspiring investors out there. And if they’d be interested in finding out some more information or working with us, please, they can get in contact.
Kristen Knapp (25:54)
Yeah, tell everyone how to find you.Doug (25:58)
So I can be reached at DDIAKITE at Nationwide CRLLC. That’s DDIAKITE at Nationwide CRLLC. And that’s the best place to reach us. And from there we can ⁓ see if we’re able to put something together.Kristen Knapp (26:17)
Fabulous. Well, thank you so much for being here today, Doug. And thank you everybody for listening. I hope you learned a lot and we will see you back next time. Bye.Doug (26:20)
Kirsten, thanks for having me.
