Earlier this year, Debbie was in the living room of her Capitol Hill townhouse when her husband noticed some commotion outside. The couple hadn’t seen anything like it before.
A large tour bus was parked on their block and at least 30 people were entering a nearby home. The members of this group were carrying thick workbooks. It was a Sunday. The people were dressed casually. They appeared to be middle class, middle-aged, and of various ethnicities.
Debbie had heard rumors about the history of the house, which was in bad shape. Word on the street was that the family inhabiting the home sold it and left. A leak in the roof had caused plaster to fall off the exterior. (Debbie’s name has been changed to protect her household’s privacy.)
Intrigued, Debbie went down the block and asked a man who was guiding the group if she could go inside. He agreed, and she watched the visitors surveying the house as if they were going to renovate it. They chatted about tearing out the kitchen and preserving the exposed brick wall.
When everyone left, Debbie says, they received gift bags. Hers contained a pen, a bottle of water, and a calendar from a real estate firm called Helpful Investing. The calendar featured pictures of a property that the company had apparently refurbished, spanning demolition to completion.
The next Sunday, the same thing happened: Another tour bus showed up with yet another group of visitors. Debbie later saw a “giant for-sale sign” out front. It read “We Buy Houses Any Condition CASH!!” plus the business’ name, phone number, and website.
Helpful Investing signs are posted outside several homes in developing areas, from Capitol Hill to Prince George’s County and across a sizeable swath of Northeast D.C. That’s left some residents, especially those on Capitol Hill’s eastern side, scratching their heads.
The property in Debbie’s neighborhood (“The Red House”) is currently listed on Helpful Investing’s website for over $1.2 million. Property records show that an LLC affiliated with the company bought it in February for $549,999—under half the current price.
A second two-story property located nearby, on K Street SE (“The Purple House”) is advertised online for over $1 million, as are five other Helpful Investing properties in D.C. The site displays 15 “Sold Properties,” eight of them in Maryland, which went for two to six times what Helpful Investing says it bought them for.
Current neighborhood commissioner Dan Ridge is wary about the company. “I think they’re playing some complicated lottery model that has big pay days when they shift a property,” he says. “I don’t like lotteries played on the backs of my neighbors, who often have little recourse.”
Marcus Thomas, a co-founder of Helpful Investing, says the firm focuses on “undervalued properties” in “transitional areas,” converting some into multiple condo units and keeping others as single-family homes. Thomas and his business partner Dan McCutchen launched the company a decade ago and redeveloped their first house in Capitol Heights, Maryland. They’ve since completed more than 50 projects and grown the business to the District, with a concentration in Capitol Hill.
The company aims to keep “hold time”—how long it owns properties—to a minimum: ideally four to six months for a rehabilitation flip, depending on a project’s specifications. Thomas admits that some Helpful Investing redevelopments can drag on for a year or more. He points the finger largely at regulatory hurdles, calling them the “Achilles’ heel” of the firm’s business model, since they can delay projects by months (“an exasperating amount of time”) and increase other costs.
“We don’t just buy something because it’s a dump,” Thomas says. “The value has to be there” in the property’s location and condition.
D.C. Superior Court records show one lawsuit against the company, filed last December by a woman who bought a home in Northeast that Helpful Investing had renovated but did not own.
The litigation alleges “extensive renovations without permits, without inspections, and without regard to proper construction techniques and [D.C.’s] building code,” forcing the buyer and her children to live “in a home that has holes in the walls, a flooding basement, a leaking roof, leaking and burst pipes, lacks insulation, and has broken floors and cabinets.” The current owner, whose attorneys did not respond to a request for comment, sued for fraud under D.C.’s consumer protection laws, claiming “no disclosure was made to [her] or her real estate agent of any issues with the home.” She purchased it in 2013 for $240,000 from a woman who had contracted with Helpful Investing.
In a response to the complaint, attorneys for the defendants, including Helpful Investing, denied almost all of the substantive allegations and counter-argued that the buyer was “responsible for checking the quality and suitability of the property before purchase.” They also said the alleged damages were “the fault of third parties,” and that the buyer had failed to mitigate them herself.
Once a month, Thomas says, Helpful Investing hosts “meetups” at a Largo hotel (“almost like an open mic session”) for people interested in real estate: Some may need to buy or sell a house, others may need an architect or general contractors. “It builds a trust system,” he says, noting that the sessions are free. “We’re not those late-night gurus.” (Although there usually is a DJ present.)
Lenders are asked to make a minimum investment of $50,000 in a project for periods of less than one year and penalties for the company are baked in if a project goes long. “That shows you I’m not here to hold your money,” he explains, noting that the average rate of return for investors is more than 10 percent, but those returns can be much higher. “We have never not paid anybody back.”
Thomas says about half of the company’s investors do not live in the D.C. area, but know its real estate market is hot. Helpful Investing identifies properties through multiple-listing services, word of mouth, and even “guerilla marketing” like mailers and signs. “We’re trying to stay within the footprint of the city and make neighbors happy,” he insists.
At mention of the tour buses that five residents say they have witnessed frequenting two of the firm’s Capitol Hill properties this year, Thomas chuckles. He says McCutchen also trains people for FortuneBuilders, a San Diego-based outfit that characterizes itself as “the premier real estate education company in the country,” and sometimes uses a Helpful Investing house as a “conduit” for workshops before it’s been remodeled. “It’s an introduction to what you are able to do in the area,” Thomas explains, adding that Helpful Investing does not charge for tours.
Still, former neighborhood commissioner Daniel Chao was taken aback when he saw a Helpful Investing property on a glossy postcard he received in the mail. The house was on Potomac Avenue SE and listed for about $1.2 million. “For the layout and how little work they did, even though the neighborhood’s value was rapidly skyrocketing, I thought ‘Who the heck would buy that home at that insane price?’”
In Thomas’ telling, though, Helpful Investing improves communities with bona fide processes in place. “This is all about a risk model,” he says with an aficionado’s aplomb. “I’m managing risk.”