Graham Kilmer

Rent-To-Own Company Helps Home Buyers

Milwaukee business helps them improve their credit and gain mortgages.

By - May 11th, 2017 01:24 pm
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Carl Quindel, owner of Strong Blocks. Photo by Grace Fuhr.

Carl Quindel, owner of Strong Blocks. Photo by Grace Fuhr.

Like many American cities, Milwaukee face a crisis of affordable housing and homeownership for its lower income residents.

Owning a home, or having equity in a home, has long been the bedrock of the American middle class. Achieving this has become harder, especially after the mortgage crisis of the last decade and changes that tightened credit.

Simply put, “It’s difficult to get a mortgage right now,” says Carl Quindel, owner of Strong Blocks, a new rent-to-own company.

Quindel’s company offers an easier way, for some, to eventually buy a home.

Quindel was the executive director of ACTS Housing, a real estate brokerage firm that helps families purchase homes, from 2007 to 2015. It was there that he realized city residents needed other options for getting into a home.

He said ACTS was seeing about 2,000 people a year and getting only 100 to 150 into a house. Upon further review of these families, he concluded that their credit rating was often a problem and that “250 families a year could benefit from six to 18 months to work on their credit to get a mortgage from the banks.”

Someone that goes through Quindel’s company will have the right to purchase the home they are renting, and can either put down a lump sum of cash or use portions of their rent for a future down payment on the home.

Michael Williams, a CNC machinist at Snap-On Tools, was Strong Blocks first success story. He says he became interested in owning his own home a few years ago, but didn’t have the credit or cash to put down on a mortgage.

For years he had bounced around a few places renting, some nice, others not, he said. He found Strong Blocks on Craigslist and decided to try rent-to-own, but his first hurdle to owning a home was his credit.

That’s where Strong Blocks can help. The company helps interested parties put together a 21-month buying plan tailored to the home they wish to buy. Often, as with Williams, this includes coaching them on how to improve their credit.

“I did what I needed to do,” Williams says. “Then, when I thought I had that together, I showed him [Quindel]. They said “We think you’re ready to go in a house.’”

Strong Blocks has purchased and renovated dozens of homes. Recently, the company also won a contract from the city to purchase 25 tax-foreclosed homes in the greater Sherman Park area for $1 to renovate for future rent-to-own families.

So far, Strong Blocks has spent more than $1 million on rehabbing houses, and works with over 55 vendors and contractors.

“We’re putting a lot money into these central city contractors,” Quindel says.

After a family has picked a home. Strong Blocks puts together the lease and a right-to-purchase agreement. This agreement secures a family’s ability to buy the home for a specific price during a specific period of time.

Williams worked on his credit for about seven months, then picked a house out of the Strong Blocks inventory and began renting until he was ready to apply for the loan.

Williams says he’d like to buy and renovate a few homes to rent out to low income families, so they can have decent housing too. “I lived in some homes and they were real bad,” he says. “I want to make nice homes for people with a low income.”

Williams has a 12-year-old son, so his new house represents more than homeownership. It symbolizes something he’s achieved in his life that will be there for his son when he’s gone.

“I’m trying to break a cycle,” he said. “I’ll be able to leave my son these things.”

Categories: Real Estate

11 thoughts on “Rent-To-Own Company Helps Home Buyers”

  1. I’m looking for a rent to own place 3 bedroom

  2. AG says:

    Ah, yes… excellent. Not only can you take advantage of people without much money or decent credit, but you can look like the hero while doing it. Sweet!

  3. Matt says:

    Good story. Next time might want to mention that some of these rent to own companies are vultures buying crap houses and ripping off poor people to enhance the slumlord bottom line.

    Green Bay

    http://www.wearegreenbay.com/news/local-news/rent-to-own-former-vision-property-management-employees-speak-out/609937839

    Legislative Scrutiny

    https://www.nytimes.com/2017/03/13/business/dealbook/rent-to-own-firm-real-estate-vision-property.html

    Financial and Physical Harm

    https://www.nytimes.com/2016/08/22/business/dealbook/rent-to-own-homes-a-win-win-for-landlords-a-risk-for-struggling-tenants.html?_r=0

    And what corporation wouldn’t love the chance to profit off houses still full of lead paint

    https://www.nytimes.com/2016/12/26/business/dealbook/seller-financed-home-sales-poor-people-lead-paint.html?_r=0

    Perhaps Urban Milwaukee needs an ombudsman.

  4. George Rilley II says:

    Where and how to sign up.

  5. Bruce Murphy says:

    Matt and AG: you raise legitimate concerns about national companies in this industry, which I have previously written about: http://urbanmilwaukee.com/2014/02/11/murphys-law-stealth-investors-target-citys-foreclosed-homes/

    But we have no reason to believe any of this applies to Strong Blocks. You might be interested to know that Carl Quindel was reluctant to be interviewed for fear he would be lumped in with some of these shady operators.

    Certainly we’d want to know if there was any reason to think a particular local rent-to-own company was shady. But to simply make these accusations without evidence is unfair. In cases like this might I suggest a private note to me at bruce@urbanmilwaukee.com is more appropriate. I’m sure you don’t want to be unfair to a scrupulous business.

  6. AG says:

    Bruce, while I wasn’t referencing the extreme examples that Matt was, my position remains. Rent-to-own is a bad financial decision. If you’re not ready to buy a home, you’re not ready. You can repair your credit and save money renting without entering into a program like this that makes it more expensive to get into a home. This is an example of a legal and legitimate industry that provides a service that people who make sound financial decisions would never partake in.

    Programs to help repair bad credit and advise on preparing to become a home owner are a far better path to home ownership than a rent-to-own program. I stand by my original position.

  7. Matt says:

    Sorry not sorry.

    Mine was a journalism complaint. I made and make no accusations against Strong.

    There’s a big national prize winning book telling us about an Eviction Crisis in Milwaukee.

    There are giant corporate slumlords entering inner city markets all over the country, as documented above (ten minutes on Google). People think they are buying houses, but then they get evicted.

    CCAP shows eleven evictions filed by Strong Blocks in the past 2 years in Milwaukee County.

    The presumption of good intentions in a sleazy industry is unsupportable.

    Mine is a journalism complaint.

  8. Vincent Hanna says:

    AG you are something else. Given the chance to reconsider being unfair to a scrupulous business you don’t have firsthand knowledge of, you double-down and oversimplify and overgeneralize, and (again) act like you know best for everyone everywhere. You are a paternalistic and self-righteous ass.

  9. Tim says:

    I have to back up AG on this. Anyone that I’ve ever known that’s tried to rent-to-own has been evicted.

    They may not have had the best credit, good financial habits, or accumulated assets but that’s exactly the point. They put their hard earned money into something and got booted out on their ass.

    It was designed for them to fail.

    They all would have been better off renting a place. Pushing lower income and lower asset people into home ownership does not benefit those people. Usually, the market pushes them into the real estate cycle just as the market is cresting. Since they usually have blemishes on their credit, they pay higher financing costs as well.

    Long story short, in real estate musical chairs… they’re left standing without a seat of their own.

    Who walks away to rent/sell these properties to the next applicant? Who walks away with all the fees from these transactions?

  10. AG says:

    Yeah Vincent, and I’m sure you’re a big fan of payday loan stores too.

    People can make their own decisions, but I don’t believe in rent to own being some sort of altruistic ideal.

  11. Juli Kaufmann says:

    I am an investor in Strong Blocks. I only invest locally and in businesses that aim to create positive social impact in combination with at least modest financial resturns. I made the decision to support the business after intensive scrutiny.

    First of all, my investigation focused on the entrepreneur behind the business – Carl Quindel. In every investment I make, I have learned that the person leading the effort matters just as much as the soundness of the idea. Carl’s service to Milwaukee, his personal integrity, and his demonstrable professional results are exceptional. He is extremely smart, passionate, and focused on making transformational impact. I have gotten to know Carl professionally and base this opinion on this firsthand experience.

    Second, I have assessed the business model. I have lived experience in this housing market. Early in my life, I lived in substandard City of Milwaukee housing as a tenant. Eventually, I became a homeowner and then, for a few difficult years, became a residential landlord. I’ve seen firsthand the challenges within this marketplace that were exceptionally articulated by Matthew Desmond’s book Evicted. I would hope we all can agree that we have severe housing disparities and challenges in Milwaukee, even if the solutions prove complex, elusive and not always agreeable to all.

    I view Strong Blocks as an innovative approach that is working to solve what have otherwise proven to be nearly intractable challenges. This is not the solution for all things, nor for everyone, but for the right situations, it is transformative. Strong Blocks uses equitable strategy that creates value for families, for residential neighborhoods block-by-block, and for local investors. Strong Blocks also hires locally and creates a web of economic impact by hiring local residential contractors to invest in residential improvements.

    I am proud of my investment in Strong Blocks and proud of the hard work of its leaders. This is the sort innovation and change agent leadership Milwaukee needs. They have my gratitude for working toward solutions.

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