On a cold and blustery afternoon in the South Bronx, about a dozen high school students were roaming the streets of their neighborhood, but they weren't just hanging out. They were figuring out values, calculating capitalization rates on multifamily properties and scouting out investment opportunities.
They are part of Project Destined, a nonprofit program that teaches inner-city students the fundamentals of real estate development and investing, right on their own streets. The program then lets them participate in and gain financially from the profits on real deals in which Project Destined invests.
"This will be like a stepping-stone into my future, having this on my resume, having this on my college applications," said Erick Garcia, a high school junior. Garcia said he applied for the program the moment he heard about it and has been dedicated ever since. Most of the students are learning things they never had been exposed to before.
"We had to learn how to use Excel and how to make financial models," said Aleah Lydeatte-Hepburn.
Cedric Bobo, a former principal at the Carlyle Group, is the co-founder of Project Destined. He sees its growth very pragmatically as just good business. "I saw the demand. We didn't build this out of charity; we built it because there was demand in the marketplace and talent, and we needed to train that talent," said Bobo. And he capitalized on that demand with lightning speed.
Launched just four years ago, Project Destined has already run programs in Atlanta, Detroit, Los Angeles, Memphis, Miami, New York City and Oakland, California. It has drawn major real estate partners, including Brookfield Asset Management, Walker and Dunlop, Cortland and Unibail Rodamco Westfield.
"The key was being authentic and intentional," said Bobo. "We've always been intentional about training talent in places where they can't always access it, and developing them with a language and a thought process that prepares them to take on opportunities like Brookfield. So when we tell Brookfield and Westfield there's talent in their market, they get excited."
Students dive into the program through an online learning platform that teaches them all the basics: from understanding cap rates to predicting profit. Then they hit the ground in teams, each focusing on one property. They formulate a full-scale investor pitch, which they then execute to a panel of real estate experts, Shark Tank-style.
Ben Brown, a managing partner at Brookfield, was on the latest panel with the South Bronx students. He heard pitches for buildings with ground-floor retail, as well as new projects that would introduce co-living to the area. He said the insights he gets from these kids is invaluable, even on a corporate level.
"When we first met Cedric, we had just acquired this large site in the Bronx. It was our first investment into that market," said Brown. "The proposition that he came to us with this project was: 'You're getting access to these young people, who are already living there, who can be thoughtful and can tell you what's going on, what the local community wants, and oh, by the way, you can help in a big way not only financially but with your time and to educate them.'"
All the students in the program can get cash scholarships, with the most, $5,000, going to the winning team. Now, in a new partnership, they will also get personal accounts with Acorns, a financial wellness app.
"One of the things Cedric said is, it doesn't matter where you start; it matters where you end up, and that's the same kind of idea. You start small and you can build an oak tree," said Noah Kerner, CEO of Acorns. "And that's the idea behind Acorns, really — financial empowerment, getting started early. It's really a similar idea."
Some of the money the kids win will go directly into their Acorns account.
"I saw hungry kids ready to take on the future. I really like that," said Kerner. "I really like the idea of people taking control of their future and doing that as young as possible as early as possible."
Some of the kids from this program have gone on to get internships and even jobs in the real estate sector, but the most valuable part of Project Destined is that the students become part of a growing network of potential future business partners who all understand exactly where they're coming from.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.