October 21, 2025 • 35 mins
Atticus LeBlanc is the founder of PadSplit, the largest co-living marketplace in America. It’s like the Airbnb for room rentals, which both saves renters an average of $366 a month and can make property owners 2x as much money. Say hello to the solution to our affordable housing crisis that’s hiding in plain sight!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
This was not charity by any stretch, right, I mean
I increased my income in creating this opportunity, which really
just makes you feel like, why is this not a thing?
Why is everyone not doing this?
Speaker 2 (00:16):
This would be a win win for literally.
Speaker 1 (00:19):
Everyone, exactly. It's much cheaper, more accessible for Tiffany or
anyone in her similar situation, it's more profitable for the owner.
Everyone should be doing this, And I've been at this
point in the affordable housing space for ten years and
no one's even talking about it.
Speaker 2 (00:42):
Welcome to an army of normal folks. I'm Bill Courtney.
I'm a normal guy. I'm a husband, I'm a father,
I'm an entrepreneur, and I'm a football coach an inner
city Memphis. And the last part somehow led to an
oscar for one of my teams. That movie is called Undefeated.
I believe our country's problems are never going to be
(01:03):
solved by a bunch of fancy people and nice suits
using words that nobody ever really uses on CNN and Fox,
but rather by an army of normal folks, US just
you and me deciding hey, maybe I can help. That's
what Atticus LeBlanc, the voice you just heard, has done.
(01:24):
Atticus is the founder of pad split, the largest co
living marketplace in America. It's like the Airbnb for room rentals,
which both saves renders an average of three hundred and
sixty six bucks a month, and makes property owners two
times as much money. It's a win win. It's a
(01:45):
solution to our affordable housing crisis. That's hiding right and
plain sight, and something that tons of Army members could
be a part of. I cannot wait for you to
meet Atticus right after these brief messages from our general sponsors.
(02:12):
Atticus LeBlanc, welcome to Memphis.
Speaker 1 (02:15):
Thank you very much, appreciate it.
Speaker 2 (02:17):
We're your parents fans of Takila Mockingbird.
Speaker 1 (02:20):
You guessed correctly, Yes, they were, both were big fans.
There are a number of stories about how I got
the name. The one I choose to go with is
that they wanted to give me someone to live up to.
Speaker 2 (02:34):
Very very cool. Your real story, for our purposes picks
up in two thousand and two. Really, I think you
moved to Atlanta and you're making thirty thousand dollars a
year and you've rented a room is kind of how
the story starts. As far as I know, so just
(02:55):
kind of pick us up there and tell me what
was going on in your world.
Speaker 1 (02:58):
Yeah. Well the first thing I followed a girl me
to Atlanta. That's pretty important story. Yeah. So, uh, she
was she wanted to be in public health and work
in international HIV prevention. So Atlanta, home to CDC, was
it was a great place for that. So she came
to get her her master's in public health here. I
followed her down here because Atlanta, in Atlanta.
Speaker 2 (03:18):
You're saying here here, that's true, that's right.
Speaker 1 (03:21):
That's true. I did just I did, just get off
the plane. So so I followed her here. I wanted
to do real estate somewhere in the South and Atlanta.
Speaker 2 (03:30):
Wow, real estate was that something you did? You study
real estate?
Speaker 1 (03:33):
I did? I did? I So I kind of fell
into it. In college. I had no idea. I thought
I was going to be an attorney like my mom
and my namesake. So I was going to be an
English major and be an attorney. And then took a
class that was kind of role playing for real middle
names not Finch is no, it's it's Bryant.
Speaker 2 (03:50):
Go ahead, but ID ask.
Speaker 1 (03:53):
The So I just got a taste of what the
life of someone in real estate was like or a developer,
and just how you could kind of take something from
concept to completion, and just absolutely fell in love. So
I came down here not knowing anyone other than my
girlfriend at the time, fortunately now my wife. I followed
the right girl perfect and just started looking for Okay, well,
(04:17):
now what do I how do I actually carve out
a career in this space? Not knowing anyone took a job.
Speaker 2 (04:24):
So you literally showing up in Atlanta in two thousand
and two dreaming of real estate making not much money.
Speaker 1 (04:31):
Yeah, it was. It was the equivalent of ten bucks
an hour. I was working really long hours. It was
a it was like a boutique, little consulting firm, but
basically I was a guy in a cube with my
hands on the keyboard and Excel spreadshoot in front of
me for twelve hours day.
Speaker 2 (04:48):
Fun.
Speaker 1 (04:49):
Yeah, yeah, it was a blast. But you know, I
didn't have any financial background, so anyone I talked to said, oh, well,
you really need to understand the financial piece of the business.
And so that's where I started and lasted six months
before I realized I cannot sit in this cubicle any
longer and I have to get out there and just
figure out another way. So then I got the glamorous
(05:13):
job of working for racetrack gas convenience stores. As my
younger brother used to tease, you went to the Ivy
League so you can go pump gas, which is which
is only partially true. I was. I was working in
the real estate division for them, but it ended up
being a really really interesting role. I knew it wasn't
(05:35):
anything that I wanted to do long term, but I
knew that I wanted to get out of the cube
and this was a great venue for that. And we
were interacting on a weekly basis with the CEO of
the company, and of course they were growing very rapidly
so and it was an opportunity to just meet tons
of people all around the Southeast. I was usually engaging
(05:56):
with folks trying to convince them to sell their property
for a racetrack station, which could have been an office
owner or literally like a farmer, sometimes next to one another.
So it was it was super interesting and I really
just I think I became more extroverted and just much
(06:16):
more comfortable talking to anyone from any walk of life
in that vetotle.
Speaker 2 (06:21):
Wouldn't be a requisite for a job like that for sure.
Speaker 1 (06:23):
Yeah, yeah, no doubt. And yeah it was only two
and a half years in when they had given me
a non compete agreement. I had actually written some site
selection criteria for how I thought they should be picking
locations based on the performance data of stores that had
(06:44):
been operating for a long time. And they liked it.
They liked a lot. But that ended in a non
compete agreement that said, oh, here take this, you know,
with some.
Speaker 2 (06:53):
Really good stuff, so we're not sure we want you
to be around here anymore and start competing with us.
Speaker 1 (07:00):
Exactly exactly that happened. It does, it does, And I
mean I didn't. I didn't fault them for it, but
maybe in my naivete as a as a young professional,
I told my boss at the time I saw a
draft of an on computer agreement, was like, oh, I
would never sign that. With that, I pretty much sealed
my fate.
Speaker 2 (07:19):
I think, so two thousand and five, then, if I'm
doing the math right, yep, you got out of cubicle,
you actually learned some applied experience and negotiating for land
and real estate deals and kind of got to see
it and were along a lot of people and it's
(07:39):
still a young guy. Yeah yeah, And so now it's
time to tell audience who Atticus LeBlanc is. He's the
founder and CEO of pad Split, which I got, to
be honest with never heard of it until now, and
now I can't quit think of out how I'm gonna
(08:00):
get involved in pad split. It's really cool, but there's
a lot before we get there to set it up.
So in two thousand and five, I assume because that
is something you never gonna sign. You said ostall a
Vista baby.
Speaker 1 (08:18):
Yeah yeah, so I but you're twenty I was twenty five.
Speaker 2 (08:22):
I was thirty one when I said Ostilla Vista and
took my deep dive and tried to bankrupt myself about
seven or eight times. Yeah, yeah, but twenty five is young.
It was Were you married at this time?
Speaker 1 (08:36):
It's funny. I actually I had to I had to
leave ten days before my wedding. So, oh my.
Speaker 2 (08:43):
Gosh, your wife said, okay, or your fiance at the time.
Speaker 1 (08:47):
She she did. She wasn't worried. I teased, though. My
my father in law is just very straight laced, has
done absolutely everything by the book, and I teased that
he must have been thrilled with.
Speaker 2 (09:01):
Me, Oh, ten days before you're gonna married my daughter,
you quit?
Speaker 1 (09:08):
Yeah, exactly exactly. So it takes.
Speaker 2 (09:12):
It takes that.
Speaker 1 (09:12):
Though it did well, and I mean I was again
maybe young and stupid and just full of potspah and
confident that I could figure out a way to make
it work. I also saw through that job that the
real estate brokers on the other side of the table,
who were often doing the negotiating for the seller, Uh,
we're making really good commission checks on the back end.
(09:36):
And I thought, oh, well, if I'm on this side,
I can totally go do that. And so that's that
was the first jump. And then of course that business
takes a while to build because it's a relationship business.
And so for the next seven years money no, I
didn't have any money. No, But and actually we we
(09:58):
forgot a pretty important piece, which was was when I
went from renting that room, I was rerunting a room,
like when I got to a land. I was running
that room for six months. And then when that lease
was up with the guy who actually was on the lease,
he said he was going to move in with his
girlfriend or something, and so I was left to figure
out what I was going to do, and started looking
(10:20):
at apartments and then said, oh, well, for what I'm
going to pay in rent for this crappy apartment, I
can actually buy a house. And so I bought a
house when I was twenty three at essentially zero money down,
and my mortgage with insurance and everything was like seven
hundred and seventeen dollars a month. And so that was
the only reason I was able to leave Racetrack at
(10:41):
the time and feel comfortable ten days before my wedding.
Even though a lot of the other people were presented
with the same agreement and wanted to leave, they weren't
in a position where they had bills that were low
enough where they could justify the risk of taking on
a new venture. And so when I left Racetrack, I
did two things. One, I said, Okay, well, I want
to build my business as a real estate broker and
(11:04):
kind of wear my own my own hat and kind
of build my own shop. But the second thing was, well,
I also want to figure out what my contingency plan is.
And so the contingency plan was this little house that
I had bought in two thousand and three out of foreclosure,
was not in a great area. It was in a
very transitional in Atlanta.
Speaker 2 (11:25):
For that kind of money. It was on the fringe.
Speaker 1 (11:29):
That is correct, Yeah, on the fringe. And it was
a fixer upper. And there was an abandoned house right
next door where my wife Alis and I used to
kind of have to scare people out of the driveway
because some people would bring prostitutes in the driveway. Anyway,
So we're like, okay, we're going to we're going to
solve this problem. And I think I can get a
mortgage using my racetrack W two income and my wife's
(11:53):
income to buy this house. And then I can use
I have equity now in the first home that I purchased,
I can borrow against to fix it up, and then
I can sell that house that's fixed up and make
some money that way. So those were kind of the
two and.
Speaker 2 (12:08):
Get rid of the hookers on the drum.
Speaker 1 (12:10):
Yes, yes, that was a win win. Yeah, that was
a happy That was a happy benefit. So that was
like the two prong approach to entrepreneurship for me in
two thousand and five. One of those things worked out
really well and one didn't work out at all, which
is so the house sold in late two thousand and six,
just before things started getting a little bit dicey in
(12:31):
the real estate market, and my brokerage career really took
a nose dive in two thousand and seven, because I
was a land guy, we were at the very front
end of the financial crisis, and so I started feeling
the repercussions of that long before the general public or
(12:51):
other aspects of the market would. My first son was
born in September of two thousand and seven. Wife, whose
dream job was to work for the un had had
that dream job for a little bit. Inside it that
she hated it and she wanted to stop working take
care of the baby. I'm like, well, she's obviously helped
(13:12):
support me for the last several years at this point,
so I accepted that. And over the next three weeks, though,
I had three large deals and every single one of
them fell apart, and so I ended up making a
total of ten thousand dollars in two thousand and seven,
had a new baby at home and a wife who
(13:33):
had just left her job. Exactly. Yeah, so it's perfect.
Speaker 2 (13:40):
And now a few messages from our general sponsors. But
first I hope you'll follow us on your favorite social
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We're at army of normal folks on every channel. Give
(14:02):
us a follo up, We'll be right back. I started
my business in two thousand and one, September one of
two thousand and one, I had My children were five, four, three,
(14:26):
and two. We got on city water and it cleared up,
but it's just they just kept coming for some reason
and got over that home. And I had seventeen thousand
dollars in the bank when I started my business, and
now I'm in manufacturing, so it's asset laden, lots of employees.
(14:49):
It's very hard to cash flowed. And I bought out
my investors in mid two thousand and six, all leveraged,
and we're talking millions of dollars. And I never even
millions of dollars, never even entered my vocabulary before then.
(15:10):
I came from nothing, and I'm in the hardwood lumber business.
So you think lands on the front end. If people
are building homes, they're thinking about flooring in cabinets and
molding and millwork in the development phrase. And if cabinet
(15:34):
companies and millwork companies don't have a log of six
to nine months worth of orders, then they're not buying wood.
And our wood is not wood that you cut down
a tree and it becomes usable. Number like TNE our
stop takes a year to two years to get right.
So the whole point is hearing your story. Oddly, I
(15:57):
feel it because it was in late two thousand and
six and early two thousand. Everybody says it's the crash
of two thousand and whatever, eight or whatever. For us,
there's a crash of two thousand and six, late two
thousand and six, two thousand and seven, And I mean
it was layoffs for a six year old company. It
was layoffs. It was bank dut it was scratch. It
(16:20):
was not paying myself. It was literally wondering month by
month if we were going to cash full enough for
me to keep the doors open. So when you say,
and I had four small children and a wife taking
care of him at home, and it just bought a house.
So I'm just saying to you, those who are listing
(16:41):
to us that didn't experience business or entrepreneurship or troubles
at that time, they were very very real. Yep, so
how do you live on ten thousand dollars with a
wife and a kid?
Speaker 1 (16:52):
Uh? You borrow a lot?
Speaker 2 (16:55):
Yeah?
Speaker 1 (16:56):
Yeah, I mean it was it was true. But I
took two contract jobs kind of doing brokerage type work
for other people, and mostly as you know, I mean,
it was a terrible job market as well, certainly for
any of the skills that I had. And it's not
like the people were hiring. But I was walking around
(17:18):
like penguin for for a while trying to figure out, Okay,
what was I going to do and how could I
find a way? And I went back to Okay, well
the house next door worked out.
Speaker 2 (17:27):
Well, oh well, but your father in law really loved you.
Speaker 1 (17:30):
Now, I got to give credits him he and he
has been nothing but supportive throughout the entire journey, and
he and my wife both have never had anything but
confidence that that I would make it work.
Speaker 2 (17:44):
So pretty cool.
Speaker 1 (17:45):
It's it's really been amazing.
Speaker 2 (17:46):
I mean, when that doesn't work, if you don't have
that support, when you have to light the world's falling apart,
when you have that to lean on somehow, it makes
it okay.
Speaker 1 (17:55):
Yeah, I mean the word rock does not do it
justice enough, But you sold that house. Yeah, so we
sold the house next door and that was helpful, and
then we had the line of credit, right, so when
we sold the house, we got the line of credit
back to be able to draw. And so I knew, Okay, well,
I can survive off of this line of credit for
like two years. Now we're eating rice and beans, but
(18:18):
we can make it work. And so then how do
I But what I really started thinking was how do
I get myself into a position where I'm not relying
on other people's decision making. And when brokerage business, you
were entirely beholden to your client and they can make
a good decision or terrible decision. And I was interested
(18:40):
in the value. I could see areas around Atlanta where
I thought this is a great deal, but I was
interested in the best value for the lowest price. Like
that was just the investor mindset, and that doesn't really
pay off as a brokerage generally. So that was something
that was always under the surface that was bothering me.
And so I started thinking, Okay, well have this line
of credit. What can I go by with this line
(19:02):
of credit? It was fifty thousand dollars, so this line
of credit against my home for fifty grand, and so
I start looking at other houses. The one next door
worked out, well, so what else can I do?
Speaker 2 (19:11):
Did you only need to have enough credit for a
down payment, So fifty thousand dollars credit, it could give
you five ten thousand dollars down payments.
Speaker 1 (19:22):
Yeah. The problem was we didn't. We couldn't for that.
We couldn't qualify for long having to pay cash. Correct. Yeah,
so you had that in the entirety of that fifty
grand to go buy a house. So I'm like, okay, well,
let me.
Speaker 2 (19:33):
Look, you're still on the fringe.
Speaker 1 (19:35):
Yeah, We're definitely in the fringe. And so I started
looking inside the perimeter. I too eighty five in Atlanta,
and my search was under fifty thousand dollars, Like, what's
what can I find for under fifty thousand dollars? And
I had done that search before and usually it was
fifty burned out shacks in the worst parts of town.
(19:55):
And this one day in November two thousand and seven,
as I get back to this realzations start looking again.
There are eleven hundred houses and.
Speaker 2 (20:03):
It's because the housing markets crashed and they just there's
an opportunity exactly.
Speaker 1 (20:08):
But it wasn't It was not public yet that the
housing market had crashed. So I'm calling all.
Speaker 2 (20:13):
These on end and people like me know it, people
live in the normal world. Don't feel a hip because
we're on the leading edge of it. That makes complete sense, exactly.
So you're starting to see it before anybody else does,
and you're starting to see the very first of the
houses starting to become available. Now that's interesting. Yeah, So
(20:33):
timing is everything, isn't it.
Speaker 1 (20:35):
It is? It is, and I mean God works in
mysterious ways, does right. But so I started looking and
I was calling all these real estate agents asking what
was going on, and nobody could give me any any answers.
They didn't know, No, they didn't, they didn't they I mean,
they just said that the bank flood started happening in October.
Most of the early houses were all kind of mortgage
(20:56):
fraud type deals, So you would see prior sales for
like two hundred and fifty thousand dollars for this little
house that in no way, shape or form could have
ever actually sold for two hundred and fifty thousand dollars,
but it was still cheaper than anything had been in
the last four years for that same property, the same neighborhood,
(21:16):
et cetera. And these were, i mean, in town neighborhoods,
not necessarily on the fringe. In some cases absolutely past
the fringe, but many of them were in relatively stable neighborhoods.
And so it kind of left me both scratched my
head and.
Speaker 2 (21:30):
Are we talking are we talking new cookie cutter construction
houses or we've talked in houses built in the sixties
and seventies that that the bones were there. Yeah.
Speaker 1 (21:39):
Mostly, So you kind of have two eras of development.
You have one that was like nineteen twenties, these really
historic neighborhoods and the.
Speaker 2 (21:50):
Bungalow type, yes, exactly, and MEMPHISI is full of them, yeah, yeah.
Speaker 1 (21:55):
And then the other, the other era would be like
nineteen fifties, early sixties style. Yeah, post World War two.
Speaker 2 (22:01):
The World War two that's coming home and getting the
twelve hundred square foot, three bedroom, two bath, small kitchen.
Speaker 1 (22:08):
Yeah, nine hundred, twelve hundred square foot.
Speaker 2 (22:09):
But those houses exactly exemphasis, full of those. Yeah.
Speaker 1 (22:13):
I mean pretty much every city, every city has.
Speaker 2 (22:16):
He's especially in the city center exactly because that's where
the city was before it grew.
Speaker 1 (22:21):
Okay, exactly, So in any case, I try to convince
anyone who will listen to me. Friends, family, my former clients.
Father in law, I was pretty sure he was out
way too conservative to invest in this. I was just
(22:42):
I was thankful that he tolerated me for as long
as he did. So, Yeah, I ended up creating a
little company called Atlanta Housing Fund. So they'll give you
an idea of how early it was that Atlanta Housing
Fund was available as a name. And Atlanta Housing Fund
still only has two houses, but bought thirteen houses under
(23:03):
thirty thousand dollars the first year.
Speaker 2 (23:05):
Okay, so you used the fifty grand bought this house
for thirty.
Speaker 1 (23:10):
So yeah, so I bought I bought three houses. My
goal was if I can get to ten, if I
can get to ten on my own, then I can
replace an income and then I don't have to worry
about what other people decide to do or not do,
and I can just know that I have a stable
income for my family.
Speaker 2 (23:25):
Yeah. But what I'm saying is the first house, how
much was it?
Speaker 1 (23:28):
Twenty four thousand, one hundred dollars?
Speaker 2 (23:29):
Okay, what are a praise for?
Speaker 1 (23:31):
Oh gosh, at that time, probably twenty seven thousand dollars.
Speaker 2 (23:35):
Okay, so how did you buy ten in the first year?
Because if you can't borrow and you're having to use
that line of credit, if there's no equity in what
you buy immediately, how do you.
Speaker 1 (23:43):
Turn exactly exactly right? So what I did was I
only ended up buying three on my own over the
course at first year.
Speaker 2 (23:53):
You raised money for the quote Atlanta Housing Fund.
Speaker 1 (23:56):
Correct, Yeah, so there were two other entities because I
knew I couldn't turn them right and there was no
liquidity from banks available.
Speaker 2 (24:06):
That's what I was exactly Yeah.
Speaker 1 (24:07):
I don't know how many banks I walked into where
they're like, oh, this is a really interesting idea. No
we can't, we can exactly, so you're in. So it
was it was all It was all cash, And what
I would do so that I could actually eat was
I would say to these other investors, you pay me
three thousand dollars to find the home, buy the home,
(24:30):
manage the renovation, and manage the property. But then you
give me a third of the income moving forward.
Speaker 2 (24:43):
We'll be right that your property management is what you're doing.
Speaker 1 (24:56):
Correct? Yeah?
Speaker 2 (24:57):
At first?
Speaker 1 (24:58):
Well, well not just property management.
Speaker 2 (24:59):
I mean it was is brokering too.
Speaker 1 (25:01):
It was the broker ing, it was the the proper
the project management of the construction. I was reasonably good. Yep, yeah,
got it. But they would pay me three thousand dollars.
So those really ten houses that I bought with other
people's money. The first year paid me thirty grand, and
then I had those two other contract jobs. So that's
(25:23):
how I could kind of recreate an income for two
thousand and eight.
Speaker 2 (25:27):
You are still square, You're hustling.
Speaker 1 (25:32):
Yes, yeah, it was absolutely a hustle.
Speaker 2 (25:36):
You're swim at a housing medley.
Speaker 1 (25:38):
But it was right, it was, but it was it
was a lot of learning in the early years, and
I was I mean I knew these neighborhoods like the
back of my hand after the first year, where I
had memorized like every single house on every single block
that I was interested in buying it over a four
year period.
Speaker 2 (25:56):
What was the criteria? What made it of value? Your words?
Speaker 1 (26:01):
Yeah, So first thing, first was I had to be
willing to drive there at eleven o'clock at night with
my wife in the car. I love that, And so
if it met that criteria, I was interested. Generally What
I found was you wanted something that hadn't been lipstick
(26:22):
on a pig, if you're familiar with that terminology. So
you wanted to see like as much of an original
condition as you could, so that you knew what you
were working with and you could more reliably budget. If
the air conditioning unit was still there and outside the house,
that was a goal mine.
Speaker 2 (26:41):
That meant like, because that meant the neighborhood was probably
decent and had neighbors looking out.
Speaker 1 (26:47):
More the latter than the former. What I realized very
quickly is there's no such thing as good neighborhood bad neighborhood.
And I knew this from living in my own house
as well, which was on the fringe. It's good neighbor,
bad neighbor. And if if that air conditioning unit were
in place, you knew that a foreclosure process took long
enough where it had been sitting there exposed for a
long period of time. So there was a good neighbor
(27:09):
somewhere around that was keeping an eye on things.
Speaker 2 (27:13):
Love it.
Speaker 1 (27:13):
That's cool, So those I mean, that was really that
was really about it, and it was.
Speaker 2 (27:17):
It was field square footage that did matter.
Speaker 1 (27:21):
No, I mean, you knew because the Atlanta Housing Authority
at the time was shutting down the housing projects, they
would give housing vouchers to renters, and so you knew
like how much each bedroom would pay. So you could
do that math and figure out, all, right, well, I
can buy this house and be fully renovated for forty
(27:43):
five thousand dollars and get nine hundred to one thousand
dollars in rent and that math works.
Speaker 2 (27:50):
So that does work. Yeah, So even if you're were
you financing these things over thirty.
Speaker 1 (27:55):
Years not initially. The only way we were able to
roll all the funds eventually was we found one credit
union who would refinance the properties after they had been
stabilized and rented and cash flowing for six months. And
so once we found that, it became a different a
different game because now you could recycle some of the capital.
Speaker 2 (28:15):
Would they take a thirty or no, twenty fifteen? What
what a credit union take on a house like it?
Speaker 1 (28:20):
So, yeah, some of them, some of them were thirty,
but most of them were like fifteen year fifteen year loans.
That makes sense, but it was it was attractive enough
for to make sense. And so in by two thousand
and nine, all my friends, family, formal clients. Everybody's out
of money. But one of the guys, yeah, we just
(28:45):
like ever happened. Everyone literally like everything was in the
houses and anybody else who had money out there was
not interested in this particular strategy. Some of them I
still tease about today, say what you could have done? Yeah, exactly.
But there was one guy, Stan Sugerman, who was in
(29:05):
the Atlanta Housing Fund partnership. I'd worked with him at Racetrack, interestingly,
and he had been one of the first investors in
Atlanta Housing Fund and he was ready to leave his
job in two thousand and nine and he bought into
this strategy and thought, Okay, this was going to be
a worthwhile endeavor, so he was going to go do
it on his own. I was like, why don't we
(29:26):
just team up because I can see that we are
very different personalities and skill sets, but I can see
that you're hustling every bit is hard or harder than
I am, and I think it would just be a
good partnership. And for anyone who knows Stan is like,
we're very different people, but it's been a fantastic partnership
to this day. And so his idea was he was
(29:48):
going to go. He's Jewish, and there were guys at
a synagogue that would loan money at thirteen percent interest,
with three percentage points rolled into the loan every six months.
So it was like exteen in nineteen percent interests.
Speaker 2 (30:01):
Wow, state would loan money like that exactly, loan money
like that.
Speaker 1 (30:07):
It's a it's a good business. So they would loan.
They would loan this money to us, but it was
at one hundred percent financing. Oh, and so we could
then go buy these properties at really high interest rates
but one hundred percent financing and then roll them over
into the Credit Union research exactly. And so so we
(30:31):
kept we kept buying. Most of them were affordable rentals
through the Housing Choice or Section eight program. Uh one
we did with actually a number we did. We started
this program called the Neighborhood Stabilization Program, which was federal
dollars in the crash where you had to meet certain criteria,
had to be affordable housing. And so that was a
(30:52):
public private partnership with the City of Atlanta. And then
the other thing that was really interesting was one of
the first houses that became vacant after the tenant moved
out after a year. Right next door was a rooming house.
So I had seen these rooming houses all around town
as I was driving these different blocks. But my degree
(31:13):
was in architecture and urban studies. I had never heard
the term rooming houses outside of the context of like
nineteen twenties New York. But there was one next door
to this vacant house that I had, and I got
to know one of the guys who lived there. His
name was Mitch, and Mitch earned seven hundred and thirty
five dollars a month total income. So he had some
(31:34):
sort of of liver disease and was disabled, and he
was on Social Security income. And Mitch comes to me
one day when the house is vacant, says, hey, can
we come rent rooms in your house? Because this house
is going to get foreclosed and we're all going to
be evicted. And a couple things occurred to me at
(31:57):
that moment. One when I learned that Mitch is earning
seven hundred and thirty five dollars a month, I realize,
Mitch is not going to qualify for anything anywhere in
the state.
Speaker 2 (32:08):
Hitch is that foreclosure way from literally being a homeless man,
yes on the streets begging for money, Yeah, exactly, And
where do they send the sochi security check when you
don't have a Yeah, what you're saying now dives into
a whole societal thing that people really don't understand that
(32:30):
Mitch is disabled. He is getting seven hundred and thirty
dollars a month, but what does that afford him? And
if it doesn't afford him anything, he literally is now
a homeless guy, and good luck getting the money to
him when he doesn't have a residence. And it's as
a really slippery teeterie slope that once it starts downhill,
(32:53):
the wheels come off. And there's hundreds of thousands of
Americans like Mitch.
Speaker 1 (32:58):
Yeah, especially in two and nine yea, when I mean
it was all paper checks and nowhere to go. But
I what I realize is even in the worst parts,
well beyond the fringe, worst parts of town, crappiest departments,
most property managers are looking at three times the rent
for an income requirement. Well, we're in the depth of
(33:22):
the crash, like it is clear to everyone in two
thousand and nine. Oh yeah, we are in it. We
don't know if we're ever going to come out of it.
Speaker 2 (33:28):
Yep. Banks are failing the government's buying propping up be
of a or somebody else. It was terrible, and nobody's
coming to save Mitch.
Speaker 1 (33:37):
Right well, and there are no units available at the
two hundred dollars in change per month that he can
actually qualify for. Uh. And so so that was the
first thing. The second thing I realized was, wait a second, Well,
how many other people have that same problem that they're
not going to qualify for anything? And you realize the
entire service sector, right, anybody working minimum wage jobs or
(33:59):
working at McDonald's or Wendys or what have you like,
they have a very similar problem. Because when housing is
as cheap as it's ever been, it's still not cheap
enough for those people to qualify. You've got a massive issue.
Speaker 2 (34:10):
Even for an apartment.
Speaker 1 (34:11):
Correct. And And that house that they had been living
in there had been a tarp on the roof the
entire year that I had Are you kidding? I had
the house next door, there had been no heating and
air conditioning wires hanging off the side. And they were
paying one hundred bucks a week.
Speaker 2 (34:28):
For rooms, which how many were in that house?
Speaker 1 (34:31):
There were five in that two thousand dollars a month.
It's more than that because there are four point three
weeks in a month, not only.
Speaker 2 (34:39):
Four, that's right, So twenty four fifty a month about yeah.
Speaker 1 (34:47):
Yeah, Now, like, how in.
Speaker 2 (34:48):
The world can the tenant lose that property when he
has that kind of income coming in on a place
that is clearly a.
Speaker 1 (34:57):
Cost great question, I mean, who knows.
Speaker 2 (35:01):
But the fact is it's getting foreclosed.
Speaker 1 (35:03):
On, it's getting it's getting for clothing.
Speaker 2 (35:07):
And that concludes part one of our conversation with Atticus LeBlanc,
and you don't want to miss part two that's now
available to listen to. Together, guys, we can change this country,
but it starts with you. I'll see in part two.
This was not charity by any stretch, right, I mean
I increased my income in creating this opportunity, which really
just makes you feel like, why is this not a thing?
Why is everyone not doing this?
Speaker 2 (00:16):
This would be a win win for literally.
Speaker 1 (00:19):
Everyone, exactly. It's much cheaper, more accessible for Tiffany or
anyone in her similar situation, it's more profitable for the owner.
Everyone should be doing this, And I've been at this
point in the affordable housing space for ten years and
no one's even talking about it.
Speaker 2 (00:42):
Welcome to an army of normal folks. I'm Bill Courtney.
I'm a normal guy. I'm a husband, I'm a father,
I'm an entrepreneur, and I'm a football coach an inner
city Memphis. And the last part somehow led to an
oscar for one of my teams. That movie is called Undefeated.
I believe our country's problems are never going to be
(01:03):
solved by a bunch of fancy people and nice suits
using words that nobody ever really uses on CNN and Fox,
but rather by an army of normal folks, US just
you and me deciding hey, maybe I can help. That's
what Atticus LeBlanc, the voice you just heard, has done.
(01:24):
Atticus is the founder of pad split, the largest co
living marketplace in America. It's like the Airbnb for room rentals,
which both saves renders an average of three hundred and
sixty six bucks a month, and makes property owners two
times as much money. It's a win win. It's a
(01:45):
solution to our affordable housing crisis. That's hiding right and
plain sight, and something that tons of Army members could
be a part of. I cannot wait for you to
meet Atticus right after these brief messages from our general sponsors.
(02:12):
Atticus LeBlanc, welcome to Memphis.
Speaker 1 (02:15):
Thank you very much, appreciate it.
Speaker 2 (02:17):
We're your parents fans of Takila Mockingbird.
Speaker 1 (02:20):
You guessed correctly, Yes, they were, both were big fans.
There are a number of stories about how I got
the name. The one I choose to go with is
that they wanted to give me someone to live up to.
Speaker 2 (02:34):
Very very cool. Your real story, for our purposes picks
up in two thousand and two. Really, I think you
moved to Atlanta and you're making thirty thousand dollars a
year and you've rented a room is kind of how
the story starts. As far as I know, so just
(02:55):
kind of pick us up there and tell me what
was going on in your world.
Speaker 1 (02:58):
Yeah. Well the first thing I followed a girl me
to Atlanta. That's pretty important story. Yeah. So, uh, she
was she wanted to be in public health and work
in international HIV prevention. So Atlanta, home to CDC, was
it was a great place for that. So she came
to get her her master's in public health here. I
followed her down here because Atlanta, in Atlanta.
Speaker 2 (03:18):
You're saying here here, that's true, that's right.
Speaker 1 (03:21):
That's true. I did just I did, just get off
the plane. So so I followed her here. I wanted
to do real estate somewhere in the South and Atlanta.
Speaker 2 (03:30):
Wow, real estate was that something you did? You study
real estate?
Speaker 1 (03:33):
I did? I did? I So I kind of fell
into it. In college. I had no idea. I thought
I was going to be an attorney like my mom
and my namesake. So I was going to be an
English major and be an attorney. And then took a
class that was kind of role playing for real middle
names not Finch is no, it's it's Bryant.
Speaker 2 (03:50):
Go ahead, but ID ask.
Speaker 1 (03:53):
The So I just got a taste of what the
life of someone in real estate was like or a developer,
and just how you could kind of take something from
concept to completion, and just absolutely fell in love. So
I came down here not knowing anyone other than my
girlfriend at the time, fortunately now my wife. I followed
the right girl perfect and just started looking for Okay, well,
(04:17):
now what do I how do I actually carve out
a career in this space? Not knowing anyone took a job.
Speaker 2 (04:24):
So you literally showing up in Atlanta in two thousand
and two dreaming of real estate making not much money.
Speaker 1 (04:31):
Yeah, it was. It was the equivalent of ten bucks
an hour. I was working really long hours. It was
a it was like a boutique, little consulting firm, but
basically I was a guy in a cube with my
hands on the keyboard and Excel spreadshoot in front of
me for twelve hours day.
Speaker 2 (04:48):
Fun.
Speaker 1 (04:49):
Yeah, yeah, it was a blast. But you know, I
didn't have any financial background, so anyone I talked to said, oh, well,
you really need to understand the financial piece of the business.
And so that's where I started and lasted six months
before I realized I cannot sit in this cubicle any
longer and I have to get out there and just
figure out another way. So then I got the glamorous
(05:13):
job of working for racetrack gas convenience stores. As my
younger brother used to tease, you went to the Ivy
League so you can go pump gas, which is which
is only partially true. I was. I was working in
the real estate division for them, but it ended up
being a really really interesting role. I knew it wasn't
(05:35):
anything that I wanted to do long term, but I
knew that I wanted to get out of the cube
and this was a great venue for that. And we
were interacting on a weekly basis with the CEO of
the company, and of course they were growing very rapidly
so and it was an opportunity to just meet tons
of people all around the Southeast. I was usually engaging
(05:56):
with folks trying to convince them to sell their property
for a racetrack station, which could have been an office
owner or literally like a farmer, sometimes next to one another.
So it was it was super interesting and I really
just I think I became more extroverted and just much
(06:16):
more comfortable talking to anyone from any walk of life
in that vetotle.
Speaker 2 (06:21):
Wouldn't be a requisite for a job like that for sure.
Speaker 1 (06:23):
Yeah, yeah, no doubt. And yeah it was only two
and a half years in when they had given me
a non compete agreement. I had actually written some site
selection criteria for how I thought they should be picking
locations based on the performance data of stores that had
(06:44):
been operating for a long time. And they liked it.
They liked a lot. But that ended in a non
compete agreement that said, oh, here take this, you know,
with some.
Speaker 2 (06:53):
Really good stuff, so we're not sure we want you
to be around here anymore and start competing with us.
Speaker 1 (07:00):
Exactly exactly that happened. It does, it does, And I
mean I didn't. I didn't fault them for it, but
maybe in my naivete as a as a young professional,
I told my boss at the time I saw a
draft of an on computer agreement, was like, oh, I
would never sign that. With that, I pretty much sealed
my fate.
Speaker 2 (07:19):
I think, so two thousand and five, then, if I'm
doing the math right, yep, you got out of cubicle,
you actually learned some applied experience and negotiating for land
and real estate deals and kind of got to see
it and were along a lot of people and it's
(07:39):
still a young guy. Yeah yeah, And so now it's
time to tell audience who Atticus LeBlanc is. He's the
founder and CEO of pad Split, which I got, to
be honest with never heard of it until now, and
now I can't quit think of out how I'm gonna
(08:00):
get involved in pad split. It's really cool, but there's
a lot before we get there to set it up.
So in two thousand and five, I assume because that
is something you never gonna sign. You said ostall a
Vista baby.
Speaker 1 (08:18):
Yeah yeah, so I but you're twenty I was twenty five.
Speaker 2 (08:22):
I was thirty one when I said Ostilla Vista and
took my deep dive and tried to bankrupt myself about
seven or eight times. Yeah, yeah, but twenty five is young.
It was Were you married at this time?
Speaker 1 (08:36):
It's funny. I actually I had to I had to
leave ten days before my wedding. So, oh my.
Speaker 2 (08:43):
Gosh, your wife said, okay, or your fiance at the time.
Speaker 1 (08:47):
She she did. She wasn't worried. I teased, though. My
my father in law is just very straight laced, has
done absolutely everything by the book, and I teased that
he must have been thrilled with.
Speaker 2 (09:01):
Me, Oh, ten days before you're gonna married my daughter,
you quit?
Speaker 1 (09:08):
Yeah, exactly exactly. So it takes.
Speaker 2 (09:12):
It takes that.
Speaker 1 (09:12):
Though it did well, and I mean I was again
maybe young and stupid and just full of potspah and
confident that I could figure out a way to make
it work. I also saw through that job that the
real estate brokers on the other side of the table,
who were often doing the negotiating for the seller, Uh,
we're making really good commission checks on the back end.
(09:36):
And I thought, oh, well, if I'm on this side,
I can totally go do that. And so that's that
was the first jump. And then of course that business
takes a while to build because it's a relationship business.
And so for the next seven years money no, I
didn't have any money. No, But and actually we we
(09:58):
forgot a pretty important piece, which was was when I
went from renting that room, I was rerunting a room,
like when I got to a land. I was running
that room for six months. And then when that lease
was up with the guy who actually was on the lease,
he said he was going to move in with his
girlfriend or something, and so I was left to figure
out what I was going to do, and started looking
(10:20):
at apartments and then said, oh, well, for what I'm
going to pay in rent for this crappy apartment, I
can actually buy a house. And so I bought a
house when I was twenty three at essentially zero money down,
and my mortgage with insurance and everything was like seven
hundred and seventeen dollars a month. And so that was
the only reason I was able to leave Racetrack at
(10:41):
the time and feel comfortable ten days before my wedding.
Even though a lot of the other people were presented
with the same agreement and wanted to leave, they weren't
in a position where they had bills that were low
enough where they could justify the risk of taking on
a new venture. And so when I left Racetrack, I
did two things. One, I said, Okay, well, I want
to build my business as a real estate broker and
(11:04):
kind of wear my own my own hat and kind
of build my own shop. But the second thing was, well,
I also want to figure out what my contingency plan is.
And so the contingency plan was this little house that
I had bought in two thousand and three out of foreclosure,
was not in a great area. It was in a
very transitional in Atlanta.
Speaker 2 (11:25):
For that kind of money. It was on the fringe.
Speaker 1 (11:29):
That is correct, Yeah, on the fringe. And it was
a fixer upper. And there was an abandoned house right
next door where my wife Alis and I used to
kind of have to scare people out of the driveway
because some people would bring prostitutes in the driveway. Anyway,
So we're like, okay, we're going to we're going to
solve this problem. And I think I can get a
mortgage using my racetrack W two income and my wife's
(11:53):
income to buy this house. And then I can use
I have equity now in the first home that I purchased,
I can borrow against to fix it up, and then
I can sell that house that's fixed up and make
some money that way. So those were kind of the
two and.
Speaker 2 (12:08):
Get rid of the hookers on the drum.
Speaker 1 (12:10):
Yes, yes, that was a win win. Yeah, that was
a happy That was a happy benefit. So that was
like the two prong approach to entrepreneurship for me in
two thousand and five. One of those things worked out
really well and one didn't work out at all, which
is so the house sold in late two thousand and six,
just before things started getting a little bit dicey in
(12:31):
the real estate market, and my brokerage career really took
a nose dive in two thousand and seven, because I
was a land guy, we were at the very front
end of the financial crisis, and so I started feeling
the repercussions of that long before the general public or
(12:51):
other aspects of the market would. My first son was
born in September of two thousand and seven. Wife, whose
dream job was to work for the un had had
that dream job for a little bit. Inside it that
she hated it and she wanted to stop working take
care of the baby. I'm like, well, she's obviously helped
(13:12):
support me for the last several years at this point,
so I accepted that. And over the next three weeks, though,
I had three large deals and every single one of
them fell apart, and so I ended up making a
total of ten thousand dollars in two thousand and seven,
had a new baby at home and a wife who
(13:33):
had just left her job. Exactly. Yeah, so it's perfect.
Speaker 2 (13:40):
And now a few messages from our general sponsors. But
first I hope you'll follow us on your favorite social
media channels where we share more powerful content, including reels
from our video studio and testimonials from Army and mepers.
We're at army of normal folks on every channel. Give
(14:02):
us a follo up, We'll be right back. I started
my business in two thousand and one, September one of
two thousand and one, I had My children were five, four, three,
(14:26):
and two. We got on city water and it cleared up,
but it's just they just kept coming for some reason
and got over that home. And I had seventeen thousand
dollars in the bank when I started my business, and
now I'm in manufacturing, so it's asset laden, lots of employees.
(14:49):
It's very hard to cash flowed. And I bought out
my investors in mid two thousand and six, all leveraged,
and we're talking millions of dollars. And I never even
millions of dollars, never even entered my vocabulary before then.
(15:10):
I came from nothing, and I'm in the hardwood lumber business.
So you think lands on the front end. If people
are building homes, they're thinking about flooring in cabinets and
molding and millwork in the development phrase. And if cabinet
(15:34):
companies and millwork companies don't have a log of six
to nine months worth of orders, then they're not buying wood.
And our wood is not wood that you cut down
a tree and it becomes usable. Number like TNE our
stop takes a year to two years to get right.
So the whole point is hearing your story. Oddly, I
(15:57):
feel it because it was in late two thousand and
six and early two thousand. Everybody says it's the crash
of two thousand and whatever, eight or whatever. For us,
there's a crash of two thousand and six, late two
thousand and six, two thousand and seven, And I mean
it was layoffs for a six year old company. It
was layoffs. It was bank dut it was scratch. It
(16:20):
was not paying myself. It was literally wondering month by
month if we were going to cash full enough for
me to keep the doors open. So when you say,
and I had four small children and a wife taking
care of him at home, and it just bought a house.
So I'm just saying to you, those who are listing
(16:41):
to us that didn't experience business or entrepreneurship or troubles
at that time, they were very very real. Yep, so
how do you live on ten thousand dollars with a
wife and a kid?
Speaker 1 (16:52):
Uh? You borrow a lot?
Speaker 2 (16:55):
Yeah?
Speaker 1 (16:56):
Yeah, I mean it was it was true. But I
took two contract jobs kind of doing brokerage type work
for other people, and mostly as you know, I mean,
it was a terrible job market as well, certainly for
any of the skills that I had. And it's not
like the people were hiring. But I was walking around
(17:18):
like penguin for for a while trying to figure out, Okay,
what was I going to do and how could I
find a way? And I went back to Okay, well
the house next door worked out.
Speaker 2 (17:27):
Well, oh well, but your father in law really loved you.
Speaker 1 (17:30):
Now, I got to give credits him he and he
has been nothing but supportive throughout the entire journey, and
he and my wife both have never had anything but
confidence that that I would make it work.
Speaker 2 (17:44):
So pretty cool.
Speaker 1 (17:45):
It's it's really been amazing.
Speaker 2 (17:46):
I mean, when that doesn't work, if you don't have
that support, when you have to light the world's falling apart,
when you have that to lean on somehow, it makes
it okay.
Speaker 1 (17:55):
Yeah, I mean the word rock does not do it
justice enough, But you sold that house. Yeah, so we
sold the house next door and that was helpful, and
then we had the line of credit, right, so when
we sold the house, we got the line of credit
back to be able to draw. And so I knew, Okay, well,
I can survive off of this line of credit for
like two years. Now we're eating rice and beans, but
(18:18):
we can make it work. And so then how do
I But what I really started thinking was how do
I get myself into a position where I'm not relying
on other people's decision making. And when brokerage business, you
were entirely beholden to your client and they can make
a good decision or terrible decision. And I was interested
(18:40):
in the value. I could see areas around Atlanta where
I thought this is a great deal, but I was
interested in the best value for the lowest price. Like
that was just the investor mindset, and that doesn't really
pay off as a brokerage generally. So that was something
that was always under the surface that was bothering me.
And so I started thinking, Okay, well have this line
of credit. What can I go by with this line
(19:02):
of credit? It was fifty thousand dollars, so this line
of credit against my home for fifty grand, and so
I start looking at other houses. The one next door
worked out, well, so what else can I do?
Speaker 2 (19:11):
Did you only need to have enough credit for a
down payment, So fifty thousand dollars credit, it could give
you five ten thousand dollars down payments.
Speaker 1 (19:22):
Yeah. The problem was we didn't. We couldn't for that.
We couldn't qualify for long having to pay cash. Correct. Yeah,
so you had that in the entirety of that fifty
grand to go buy a house. So I'm like, okay, well,
let me.
Speaker 2 (19:33):
Look, you're still on the fringe.
Speaker 1 (19:35):
Yeah, We're definitely in the fringe. And so I started
looking inside the perimeter. I too eighty five in Atlanta,
and my search was under fifty thousand dollars, Like, what's
what can I find for under fifty thousand dollars? And
I had done that search before and usually it was
fifty burned out shacks in the worst parts of town.
(19:55):
And this one day in November two thousand and seven,
as I get back to this realzations start looking again.
There are eleven hundred houses and.
Speaker 2 (20:03):
It's because the housing markets crashed and they just there's
an opportunity exactly.
Speaker 1 (20:08):
But it wasn't It was not public yet that the
housing market had crashed. So I'm calling all.
Speaker 2 (20:13):
These on end and people like me know it, people
live in the normal world. Don't feel a hip because
we're on the leading edge of it. That makes complete sense, exactly.
So you're starting to see it before anybody else does,
and you're starting to see the very first of the
houses starting to become available. Now that's interesting. Yeah, So
(20:33):
timing is everything, isn't it.
Speaker 1 (20:35):
It is? It is, and I mean God works in
mysterious ways, does right. But so I started looking and
I was calling all these real estate agents asking what
was going on, and nobody could give me any any answers.
They didn't know, No, they didn't, they didn't they I mean,
they just said that the bank flood started happening in October.
Most of the early houses were all kind of mortgage
(20:56):
fraud type deals, So you would see prior sales for
like two hundred and fifty thousand dollars for this little
house that in no way, shape or form could have
ever actually sold for two hundred and fifty thousand dollars,
but it was still cheaper than anything had been in
the last four years for that same property, the same neighborhood,
(21:16):
et cetera. And these were, i mean, in town neighborhoods,
not necessarily on the fringe. In some cases absolutely past
the fringe, but many of them were in relatively stable neighborhoods.
And so it kind of left me both scratched my
head and.
Speaker 2 (21:30):
Are we talking are we talking new cookie cutter construction
houses or we've talked in houses built in the sixties
and seventies that that the bones were there. Yeah.
Speaker 1 (21:39):
Mostly, So you kind of have two eras of development.
You have one that was like nineteen twenties, these really
historic neighborhoods and the.
Speaker 2 (21:50):
Bungalow type, yes, exactly, and MEMPHISI is full of them, yeah, yeah.
Speaker 1 (21:55):
And then the other, the other era would be like
nineteen fifties, early sixties style. Yeah, post World War two.
Speaker 2 (22:01):
The World War two that's coming home and getting the
twelve hundred square foot, three bedroom, two bath, small kitchen.
Speaker 1 (22:08):
Yeah, nine hundred, twelve hundred square foot.
Speaker 2 (22:09):
But those houses exactly exemphasis, full of those. Yeah.
Speaker 1 (22:13):
I mean pretty much every city, every city has.
Speaker 2 (22:16):
He's especially in the city center exactly because that's where
the city was before it grew.
Speaker 1 (22:21):
Okay, exactly, So in any case, I try to convince
anyone who will listen to me. Friends, family, my former clients.
Father in law, I was pretty sure he was out
way too conservative to invest in this. I was just
(22:42):
I was thankful that he tolerated me for as long
as he did. So, Yeah, I ended up creating a
little company called Atlanta Housing Fund. So they'll give you
an idea of how early it was that Atlanta Housing
Fund was available as a name. And Atlanta Housing Fund
still only has two houses, but bought thirteen houses under
(23:03):
thirty thousand dollars the first year.
Speaker 2 (23:05):
Okay, so you used the fifty grand bought this house
for thirty.
Speaker 1 (23:10):
So yeah, so I bought I bought three houses. My
goal was if I can get to ten, if I
can get to ten on my own, then I can
replace an income and then I don't have to worry
about what other people decide to do or not do,
and I can just know that I have a stable
income for my family.
Speaker 2 (23:25):
Yeah. But what I'm saying is the first house, how
much was it?
Speaker 1 (23:28):
Twenty four thousand, one hundred dollars?
Speaker 2 (23:29):
Okay, what are a praise for?
Speaker 1 (23:31):
Oh gosh, at that time, probably twenty seven thousand dollars.
Speaker 2 (23:35):
Okay, so how did you buy ten in the first year?
Because if you can't borrow and you're having to use
that line of credit, if there's no equity in what
you buy immediately, how do you.
Speaker 1 (23:43):
Turn exactly exactly right? So what I did was I
only ended up buying three on my own over the
course at first year.
Speaker 2 (23:53):
You raised money for the quote Atlanta Housing Fund.
Speaker 1 (23:56):
Correct, Yeah, so there were two other entities because I
knew I couldn't turn them right and there was no
liquidity from banks available.
Speaker 2 (24:06):
That's what I was exactly Yeah.
Speaker 1 (24:07):
I don't know how many banks I walked into where
they're like, oh, this is a really interesting idea. No
we can't, we can exactly, so you're in. So it
was it was all It was all cash, And what
I would do so that I could actually eat was
I would say to these other investors, you pay me
three thousand dollars to find the home, buy the home,
(24:30):
manage the renovation, and manage the property. But then you
give me a third of the income moving forward.
Speaker 2 (24:43):
We'll be right that your property management is what you're doing.
Speaker 1 (24:56):
Correct? Yeah?
Speaker 2 (24:57):
At first?
Speaker 1 (24:58):
Well, well not just property management.
Speaker 2 (24:59):
I mean it was is brokering too.
Speaker 1 (25:01):
It was the broker ing, it was the the proper
the project management of the construction. I was reasonably good. Yep, yeah,
got it. But they would pay me three thousand dollars.
So those really ten houses that I bought with other
people's money. The first year paid me thirty grand, and
then I had those two other contract jobs. So that's
(25:23):
how I could kind of recreate an income for two
thousand and eight.
Speaker 2 (25:27):
You are still square, You're hustling.
Speaker 1 (25:32):
Yes, yeah, it was absolutely a hustle.
Speaker 2 (25:36):
You're swim at a housing medley.
Speaker 1 (25:38):
But it was right, it was, but it was it
was a lot of learning in the early years, and
I was I mean I knew these neighborhoods like the
back of my hand after the first year, where I
had memorized like every single house on every single block
that I was interested in buying it over a four
year period.
Speaker 2 (25:56):
What was the criteria? What made it of value? Your words?
Speaker 1 (26:01):
Yeah, So first thing, first was I had to be
willing to drive there at eleven o'clock at night with
my wife in the car. I love that, And so
if it met that criteria, I was interested. Generally What
I found was you wanted something that hadn't been lipstick
(26:22):
on a pig, if you're familiar with that terminology. So
you wanted to see like as much of an original
condition as you could, so that you knew what you
were working with and you could more reliably budget. If
the air conditioning unit was still there and outside the house,
that was a goal mine.
Speaker 2 (26:41):
That meant like, because that meant the neighborhood was probably
decent and had neighbors looking out.
Speaker 1 (26:47):
More the latter than the former. What I realized very
quickly is there's no such thing as good neighborhood bad neighborhood.
And I knew this from living in my own house
as well, which was on the fringe. It's good neighbor,
bad neighbor. And if if that air conditioning unit were
in place, you knew that a foreclosure process took long
enough where it had been sitting there exposed for a
long period of time. So there was a good neighbor
(27:09):
somewhere around that was keeping an eye on things.
Speaker 2 (27:13):
Love it.
Speaker 1 (27:13):
That's cool, So those I mean, that was really that
was really about it, and it was.
Speaker 2 (27:17):
It was field square footage that did matter.
Speaker 1 (27:21):
No, I mean, you knew because the Atlanta Housing Authority
at the time was shutting down the housing projects, they
would give housing vouchers to renters, and so you knew
like how much each bedroom would pay. So you could
do that math and figure out, all, right, well, I
can buy this house and be fully renovated for forty
(27:43):
five thousand dollars and get nine hundred to one thousand
dollars in rent and that math works.
Speaker 2 (27:50):
So that does work. Yeah, So even if you're were
you financing these things over thirty.
Speaker 1 (27:55):
Years not initially. The only way we were able to
roll all the funds eventually was we found one credit
union who would refinance the properties after they had been
stabilized and rented and cash flowing for six months. And
so once we found that, it became a different a
different game because now you could recycle some of the capital.
Speaker 2 (28:15):
Would they take a thirty or no, twenty fifteen? What
what a credit union take on a house like it?
Speaker 1 (28:20):
So, yeah, some of them, some of them were thirty,
but most of them were like fifteen year fifteen year loans.
That makes sense, but it was it was attractive enough
for to make sense. And so in by two thousand
and nine, all my friends, family, formal clients. Everybody's out
of money. But one of the guys, yeah, we just
(28:45):
like ever happened. Everyone literally like everything was in the
houses and anybody else who had money out there was
not interested in this particular strategy. Some of them I
still tease about today, say what you could have done? Yeah, exactly.
But there was one guy, Stan Sugerman, who was in
(29:05):
the Atlanta Housing Fund partnership. I'd worked with him at Racetrack, interestingly,
and he had been one of the first investors in
Atlanta Housing Fund and he was ready to leave his
job in two thousand and nine and he bought into
this strategy and thought, Okay, this was going to be
a worthwhile endeavor, so he was going to go do
it on his own. I was like, why don't we
(29:26):
just team up because I can see that we are
very different personalities and skill sets, but I can see
that you're hustling every bit is hard or harder than
I am, and I think it would just be a
good partnership. And for anyone who knows Stan is like,
we're very different people, but it's been a fantastic partnership
to this day. And so his idea was he was
(29:48):
going to go. He's Jewish, and there were guys at
a synagogue that would loan money at thirteen percent interest,
with three percentage points rolled into the loan every six months.
So it was like exteen in nineteen percent interests.
Speaker 2 (30:01):
Wow, state would loan money like that exactly, loan money
like that.
Speaker 1 (30:07):
It's a it's a good business. So they would loan.
They would loan this money to us, but it was
at one hundred percent financing. Oh, and so we could
then go buy these properties at really high interest rates
but one hundred percent financing and then roll them over
into the Credit Union research exactly. And so so we
(30:31):
kept we kept buying. Most of them were affordable rentals
through the Housing Choice or Section eight program. Uh one
we did with actually a number we did. We started
this program called the Neighborhood Stabilization Program, which was federal
dollars in the crash where you had to meet certain criteria,
had to be affordable housing. And so that was a
(30:52):
public private partnership with the City of Atlanta. And then
the other thing that was really interesting was one of
the first houses that became vacant after the tenant moved
out after a year. Right next door was a rooming house.
So I had seen these rooming houses all around town
as I was driving these different blocks. But my degree
(31:13):
was in architecture and urban studies. I had never heard
the term rooming houses outside of the context of like
nineteen twenties New York. But there was one next door
to this vacant house that I had, and I got
to know one of the guys who lived there. His
name was Mitch, and Mitch earned seven hundred and thirty
five dollars a month total income. So he had some
(31:34):
sort of of liver disease and was disabled, and he
was on Social Security income. And Mitch comes to me
one day when the house is vacant, says, hey, can
we come rent rooms in your house? Because this house
is going to get foreclosed and we're all going to
be evicted. And a couple things occurred to me at
(31:57):
that moment. One when I learned that Mitch is earning
seven hundred and thirty five dollars a month, I realize,
Mitch is not going to qualify for anything anywhere in
the state.
Speaker 2 (32:08):
Hitch is that foreclosure way from literally being a homeless man,
yes on the streets begging for money, Yeah, exactly, And
where do they send the sochi security check when you
don't have a Yeah, what you're saying now dives into
a whole societal thing that people really don't understand that
(32:30):
Mitch is disabled. He is getting seven hundred and thirty
dollars a month, but what does that afford him? And
if it doesn't afford him anything, he literally is now
a homeless guy, and good luck getting the money to
him when he doesn't have a residence. And it's as
a really slippery teeterie slope that once it starts downhill,
(32:53):
the wheels come off. And there's hundreds of thousands of
Americans like Mitch.
Speaker 1 (32:58):
Yeah, especially in two and nine yea, when I mean
it was all paper checks and nowhere to go. But
I what I realize is even in the worst parts,
well beyond the fringe, worst parts of town, crappiest departments,
most property managers are looking at three times the rent
for an income requirement. Well, we're in the depth of
(33:22):
the crash, like it is clear to everyone in two
thousand and nine. Oh yeah, we are in it. We
don't know if we're ever going to come out of it.
Speaker 2 (33:28):
Yep. Banks are failing the government's buying propping up be
of a or somebody else. It was terrible, and nobody's
coming to save Mitch.
Speaker 1 (33:37):
Right well, and there are no units available at the
two hundred dollars in change per month that he can
actually qualify for. Uh. And so so that was the
first thing. The second thing I realized was, wait a second, Well,
how many other people have that same problem that they're
not going to qualify for anything? And you realize the
entire service sector, right, anybody working minimum wage jobs or
(33:59):
working at McDonald's or Wendys or what have you like,
they have a very similar problem. Because when housing is
as cheap as it's ever been, it's still not cheap
enough for those people to qualify. You've got a massive issue.
Speaker 2 (34:10):
Even for an apartment.
Speaker 1 (34:11):
Correct. And And that house that they had been living
in there had been a tarp on the roof the
entire year that I had Are you kidding? I had
the house next door, there had been no heating and
air conditioning wires hanging off the side. And they were
paying one hundred bucks a week.
Speaker 2 (34:28):
For rooms, which how many were in that house?
Speaker 1 (34:31):
There were five in that two thousand dollars a month.
It's more than that because there are four point three
weeks in a month, not only.
Speaker 2 (34:39):
Four, that's right, So twenty four fifty a month about yeah.
Speaker 1 (34:47):
Yeah, Now, like, how in.
Speaker 2 (34:48):
The world can the tenant lose that property when he
has that kind of income coming in on a place
that is clearly a.
Speaker 1 (34:57):
Cost great question, I mean, who knows.
Speaker 2 (35:01):
But the fact is it's getting foreclosed.
Speaker 1 (35:03):
On, it's getting it's getting for clothing.
Speaker 2 (35:07):
And that concludes part one of our conversation with Atticus LeBlanc,
and you don't want to miss part two that's now
available to listen to. Together, guys, we can change this country,
but it starts with you. I'll see in part two.
Host
Bill Courtney
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