New York: To amass a fortune in real estate, despite New York’s crazy housing prices: that is the challenge thrown down by singer Jennifer Lopez and her boyfriend Alex Rodriguez to kids from the Bronx, the city’s poorest borough.
Around 50 young students from the Bronx, most of them black or Latino, have been selected for “Project Destined,” a scheme designed to teach them the ins and outs of financing and real estate and sponsored by J.Lo and A-Rod — as the retired baseball superstar Rodriguez is known.
The youths underwent intense instruction from lawyers, bankers, mortgage companies and realtors, but the course will not be just theoretical.
The student team that comes up with the best business plan will have the chance to buy a building worth $1.5 million in the Bronx and develop it.
In this real estate mecca, its skyline in constant flux and whose most famous alumnus Donald Trump is now in the White House, good contacts can open unimaginable doors.
That was the philosophy of the project’s two founders, Fred Greene and Cedric Bobo, both of them successful black businessmen who wanted to pass on their knowledge and experience to kids from humble backgrounds.
“What we are doing here is giving kids a chance to work with us almost like apprentices,” said Bobo. “Kids come in, analyze properties, we then buy them and we share a portion of the profits.”
“We want to put owners and stakeholders in the communities where they live, work and play. If we do that, we do a lot,” said Bobo, an experienced investment banker for the Carlyle Group, one of the power houses of Wall Street.
Before moving to the Bronx, where more than 35 percent of the population live in poverty, the program ran in Detroit, Memphis and Miami, helping young people from poorer backgrounds learn the ropes of business.
Escaping the ghetto
At Yankee stadium in the Bronx, the students — split up into six teams — lay out their business strategies to a panel of experts that includes Jonathan Gray, head of the Blackstone Group, and Lopez, the mega-star singer who herself grew up in the Bronx but who is selling her Manhattan penthouse apartment for $27 million.
The winning team will be the one with the most persuasive strategy that secures the greatest profit.
The winners will then become minority shareholders in the development and receive some of the earnings from the property, helping pay their university tuition as long as they stay enrolled in the project and take part in more courses online.
In a pre-training session, Rodriguez chats with participants on an impressive balcony overlooking Times Square.
“Real estate is a way out of the ‘hood,” he says. “For real estate is the one game where you can get rich .. it doesn’t matter if you don’t have any money and it doesn’t matter what market, you can go buy real estate all over the world with no money.”
The ex-ball star says he is living proof of that: he bought a duplex in southern Florida in 2003 and now owns more than 10,000 apartments through his company Monument Capital Management.
“I’m really excited to learn how the real estate market works,” said Jovani Amaxtal, an 18-year-old philosophy student whose Mexican mother works slicing loaves for street vendors. “That’s where the money is!”
– Don’t settle for less –
“I come from very humble beginnings. My mother worked two jobs. But I believed I was going to be the leader of my family and I was going to make a difference,” said Rodriguez, who grew up in Washington Heights, a Dominican neighborhood in New York.
“Don’t settle for anything less. This is the American dream,” he urged the students.
The price of a square meter of real estate in the Bronx is $3,081: the average annual income of a family is $35,176.
“It’s a lot of hard work but it’s something that everybody could do,” said Charles Wu, one of the project instructors. “You don’t have to have huge money. You can start small and you can build a portfolio over time.”
“Now I’ve told my friend, like, when I am 27, I am going to own the building, or two or five,” said student Andrea Alarcon, 17, who was born in Ecuador and whose mother works long shifts as a waitress to provide for the family.
“Being a homeowner? I’d love to! Having a house under my name… I am ready!” said Ruben Germosa, 18, who the week before had visited Harvard Business School with Bobo, his mouth wide open in awe. He is considering applying next year to the university but still does not know how he would pay the tuition fees.