Shortly after he arrived in the United States almost forty years ago, Dr. Joe Asamoah received some life-changing advice from a trusted mentor: always have a plan b. An electrical engineer with an MBA and Ph.D., Dr. Asamoah, or Dr. Joe, as he’s often called, was quick to heed this advice as well as his mentor’s second piece of advice: buy and hold real estate, for building wealth.
As is his style, Dr. Joe listened to this guidance and immediately got to work. He asked questions of people he respected, began learning as much as he could, and then dove in at the first chance he got. His first investment was a single-family home that he bought for $47,000.
When he bought that first rental unit, it had a $5,000 water bill. Tenants hadn’t paid rent in three months, and, even in the best-case scenario, the property would produce only about $50 a month. Nevertheless, Dr. Joe dealt with the issues, learned from his mistakes, and was determined to follow his mentor’s advice of holding onto properties. Thirty-seven years later, the property that he bought for $47,000 is worth around $900,000, the current Tenants have been there for 12 years and pay $4,700 per month, and he owns the property free and clear.
Finding a Recession-Proof Niche
After over three decades of real estate investing, Dr. Joe has found his niche and concentrated all of his efforts on that. His model is centered around Section 8 housing, which is a federally funded program that authorizes government funding to go directly to private Landlords on behalf of eligible low-income Tenants.
He’s learned that when he offers quality Section 8 housing in good neighborhoods, he can attract Tier 1 Tenants. His Tenants will stay for extended periods (he has one Tenant that’s been there for 25 years), and his model isn’t impacted by economic cycles. If his Tenants’ income decreases, HUD pays more and ensures that he’s consistently paid a competitive rent.
It’s not the easiest model – it took some extensive research into section 8 requirements, zeroing in on ideal tenants, and understanding neighborhoods. Plus, the model requires Dr. Joe to keep his properties in top-notch condition, manage them well, and consistently prioritize Tenant needs.
Nevertheless, it’s a model that’s proven to be effective throughout economic ups and downs and a model that has been scalable. Dr. Joe currently owns over thirty single-family homes in the DC area – one of the most expensive markets in the US. He has a track record of retaining tenants, he is earning an impressive cash flow, and his properties are steadily appreciating. Perhaps most importantly, his model enables him to provide quality housing and serve as a trusted Landlord to people that otherwise might not have either.
Tangible Advice from Dr. Joe for Building Wealth
We can’t say enough good things about how Dr. Joe runs his business. He has a wealth of knowledge and is a great source of inspiration. While there’s so much to share, we wanted to pull out a few pieces from our recent interview with him that Landlords can apply to their own business.
Make a Plan for Retaining Tenants
A key component of Dr. Joe’s model is attracting and retaining Tier 1 Tenants. These are Tenants that take good care of their property, keep everything in immaculate condition, pay rent on time, and are easy and pleasant to work with.
He was quick to tell us that you can’t just HOPE that Tenants will stay. Instead, Landlords need to create a plan focused on Tenant retention. Here’s how he does it:
- He keeps his properties in pristine condition. He repairs and upgrades them before Tenants move in, plus he knows what his ideal tenant wants in a property and makes sure his properties have it. Once Tenants have moved in, he promptly addresses any issues that arise, makes sure that his properties are well-maintained, and meet all reasonable Tenant requests.
- He goes above and beyond to make tenants happy and build goodwill.
- All tenants receive flowers on Mother’s Day and a present on Christmas.
- If the kids in his rental units perform well in school and show him their report cards, he gives them $50.
- Tenants can take a vacation every year in the Asamoahs’ timeshare not far from the DC area.
The idea here is that he has a great product that Tenants can’t find elsewhere. Plus, he’s an ideal Landlord – not only meeting Tenants’ needs but also going above and beyond to show them that he appreciates and values them as Tenants. The result is that his Tenants don’t want to leave and it’s not unusual for him to have Tenants stay for 10, 15, or even 20 years!
Have a Clear Strategy for Acquiring Properties
Dr. Joe has a very specific model that works for him. For this model, he knows exactly what type of property he needs to attract the Tenants that he wants. He states his plan simply as an “ABC” strategy. He buys C houses, in B neighborhoods, and rents to A Tenants.
Here’s what this looks like in practice. He looks for properties in good neighborhoods that are not in good condition and need work. He then fixes them up and gets them in great condition. Finally, he looks for a Tenant, who wants a nice house, in a good neighborhood with access to quality schools and amenities.
Using this model, he knows exactly what to look for when acquiring new properties and exactly what he needs to do to attract and retain Tier 1, or A, Tenants.
Set a High Bar for Screening Tenants
The key to Dr. Joe’s strategy is attracting quality Tenants. An essential first step is offering quality houses in good condition and in good neighborhoods. However, the next step is equally important: selecting a Tier 1 Tenant.
He does this by setting a high bar for Tenants and conducting thorough Tenant screening. One unusual step in his screening process is a home visit. He’s learned that the best way to predict how your rental unit will look three months after a new Tenant moves in is by looking at what their current home looks like. Because of this, a home visit is a required part of his screening process.
Prioritize Helping People
One of the most inspiring things about Dr. Joe is how passionate he is about the work he does. He isn’t simply focused on making money. Instead, he understands that by providing quality Section 8 housing in good neighborhoods, he is changing the trajectory of people’s lives.
He recently had a Tenant reach out and thank him for giving her such a great place to live. She said that because of that opportunity, her children were able to attend a quality school and both had received full rides to college. This feedback is what it’s all about for Dr. Joe. He understands that he can make a difference and he takes that responsibility very seriously.
One of the many reasons we think so highly of Dr. Asamoah is his commitment to helping other Landlords and sharing what he’s learned. After all, that’s what drives us at ezLandlordforms.com, and it’s the culture we want to create in our community of Landlords.
We hope you’ll connect with Dr. Joe to continue learning from him. You can follow him on Instagram, visit his website at www.joeasamoah.com, or check out his YouTube Channel for more advice, tips, and inspiration. In addition, Dr. Joe hosts his “Wealth Wednesday” live stream each week @ 7 pm EST on YouTube where he shares sage advice from his 30+ years of experience.
Emily Koelsch, ezLandlordForms Contributing Writer
Emily Koelsch is a freelance writer and blogger, who primarily writes about business, real estate, and technology.