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Solar Energy and Affordable Housing with AJ Patton, Episode 120

September 10, 2019

 

548 Capital is purchasing vacant land and redeveloping it into solar farms. While, solar energy can drastically reduce utility costs, the political landscape and startup costs may deter most. AJ Patton found a way to earmark solar energy for affordable housing that redevelops communities without gentrifying them. On this episode, he shares why solar energy is important, how he gained political support, and how he drives profits without drastically increasing rents.  

 

PartnerDownload a Free Sample Apartment Deal Package

 

 

Key Insights

  • Started with Duke Realty and went to HSBC

  • Took a job for a Hong Kong firm and was there for 10 years

  • Worked at a Hong Kong firm on convertible debt, ski resorts, islands, pipe transactions, etc.

  • A friend called and requested $10 million to build a solar farm and then sell the energy to a Fortune 500 firm

  • Asked friend about creating solar farms and selling to low income families

  • Own and operate the solar and energy into the portfolio

  • Building a 9 mega-watt solar infrastructure and earmarking the energy as a discount (malls, municipalities, and buildings) – will power 1,700 units

  • Energy sold at a 20% discount to the market

  • Creating these farms in the city, converting old steelmill gravesites to purchase and redevelop these spaces

  • Power52 is partner, founded by Ray Lewis and Rob Wallace

  • Job creation and education make it easier to work with the city  

  • An environmental consultant put AJ together with Ray Lewis

  • Goal is redeveloping communities without gentrification so current residents participate in the ascension of their own neighborhood

  • The low 25% census tracts are Opportunity Zones, if you invest in these communities you can get tax deferrals on capital gains from stocks

  • Up to 15% can be forgiven on federal level

  • Redeveloping 3,000 units on the South and West side of Chicago

  • Doing rooftop solar on these buildings as well

  • Cut the utilities by 1/3, lessens the burden to raise

  • Using investor capital only, not using LIHTC (low income housing tax credit) or TIF (tax increment financing)

  • Our return profile is competitive and we’re doing the good

  • It has to be housing, jobs and education to invest in a community

  • Put together a team featuring Erica Johnson to lead up construction and development and Charles Cole who was a partner on another fund

  • Grew up in Section 8 Housing in Unit 548, Erika is from the same projects

 

Partner: Check out the Northstar Real Estate Conference on Sept. 21 and 22

 

 

Bull’s Eye Tips:

Winning Your Market: Community buy-in, let folks know the why
 

Tracking Market Changes: Be an open source and be available


Daily Habit:  Up at 5am and read for 50 mins

 

Resources:

Dude You’re Going to Be a Dad by John Pfeiffer

 


Best Business Books:

Wall Street Journal

 

Digital Resources:

G Suite
 

Tweet This:

“Mission alignment is key”

 

“The low 25% census tracts are Opportunity Zones, if you invest in these communities you can get tax deferrals on capital gains from stocks”

 

“We’re not interested in curating a neighborhood”

 

“It has to be housing, jobs and education to properly invest in a community”

 

 

Places to Grab a Bite:

Ja Grill in Hyde Park
 

RPM Steak


Chicago Cut


 

Connect with AJ:

Website: 548capital.com

Twitter: @AJPatton10
 

Leave us a review and rating on Apple Podcasts or Stitcher. Be sure to check out more info at TargetMarketInsights.com.

 

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