Celebrate differences. We’ve discovered that diversity in general — different ways of thinking, different backgrounds, different perspectives — makes us so much better. In business and in life, people often avoid hard conversations because they are, well, hard. But those moments where we see things differently, acknowledge other views, commit to listening, and learn from each other — that’s where we’ve learned the most and created the most good. As partners, we often come at things from different perspectives — Andrew might come at things from the employee perspective, Shannon from the tenant perspective, and Dan from the investor perspective. None of them is “right” — they’re all valid, and listening carefully and learning to elevate someone else’s point of view is where the magic happens.
In many large cities in the US, there is a crisis caused by a shortage of affordable housing options. This has led to a host of social challenges. In this series called “How We Are Helping To Make Housing More Affordable” we are talking to successful business leaders, real estate leaders, and builders, who share the initiatives they are undertaking to create more affordable housing options in the US.
As a part of this series, we had the pleasure of interviewing Shannon Reichert, Andrew Reichert, and Daniel Croce.
Shannon Reichert, Andrew Reichert, and Daniel Croce are partners and co-founders of Birgo, a real estate investment company that is focused on affordable “workforce” housing in the heartland of America. Birgo is mission-driven, and its 65+ employees are committed to the company’s core purpose of “improving lives through real estate.” Headquartered in Pittsburgh, Pennsylvania, Birgo currently has over 2,000 units and 200 million dollars in assets under management.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
We each took very different paths before joining forces to create Birgo, which we think is a strength of our story and enables us to see things from multiple perspectives. Shannon has a background in retail, Andrew started off in sales, and Dan was previously in finance. In terms of how we ended up doing what we’re doing today, the Reicherts (Shannon and Andrew) started investing in real estate in 2007, and they went full-time into property management in 2012 — managing properties by themselves at the time. The property management side of what we do was born out of a passion to invest in communities and connect with people.
Meanwhile, Dan started his first investment fund in 2013. The driving force behind that was a desire to create a better way for people to invest in income-producing assets. In 2015, we started having conversations around what it would be like to combine what we were each building — Shannon and Andrew bringing the expertise with property management and real estate experience, and Dan bringing the fund management and capital markets background. We joined forces to form Birgo in the fall of 2015, and that’s when we launched our first real estate fund that focused on workforce housing. It’s been a wild ride, but the rest is history!
Can you share the most interesting story that happened to you since you began your career?
Oh man… we do have some tales to tell! One memorable story is something we’re still experiencing. When we acquired an apartment complex, we found out the seller of the building wasn’t honest with the information they provided before closing. After closing, we walked into an incredibly difficult and disheartening situation where none of the tenants were paying rent and the building served as a hub for lots of illegal activity. It’s been a long road to turn the tide, but we’ve been able to make serious progress and the building has been repositioned in the community as a wonderful place to call home.
We had the joy of watching our team rally together and come up with a plan for how we would put a better narrative forward for future tenants. Today, the property has a more stabilized occupancy and receives high resident reviews.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
For all of us, leaning into partnership was the tipping point that made the ball start rolling much faster. We each have individually unique abilities to be the voice of our different key stakeholders — tenants (Shannon), investors (Dan), and employees (Andrew). Recognizing that we need different perspectives and making the decision to partner really set us on a faster growth trajectory. We think the takeaway there is that it can be really rewarding to make a decision to be a smaller part of something big instead of being a bigger part of something small.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful who helped get you to where you are? Can you share a story about that?
We can’t just pick one person, and we really have to point to our team of employees. The Birgo team is what makes our work so special. They live into our values and our core purpose of improving lives through real estate. It takes a special kind of person to want to work at a place that is taking on big challenges and has high standards for how we approach our work. We wouldn’t be anywhere near where we are today without our dedicated team, and we’re especially grateful for those who have been with us through thick and thin over the long run.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
There’s a book called “Evicted: Poverty and Profit in the American City.” It’s an outstanding book that paints a picture of what the typical low-income housing experience is in the United States today. It’s set in Milwaukee, and it’s actually completely heartbreaking — a painfully accurate description of what life looks like for so many people in our country. It tells the stories of many tenants that live in poverty and depicts their struggles to survive and stay off the streets in our country that has so much abundance. Some of them had issues with addiction, etc., and some fell on hard times and couldn’t catch a break. That book has served as a source of “fire in the belly” for Birgo from Day One. We are determined to help our tenants live a different story. It doesn’t have to be that way. Landlords are in a position of power and influence and if they will think of their tenants as more than a stream of income, they can bring about real impact in peoples’ lives. That book paints a picture of what low-income housing looks like when property owners only care about short-term profit.. At Birgo, we work diligently to paint a different picture for our residents.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Do unto others as you would have them do unto you.” Simple as that. This timeless adage governs how we think about interacting with all of our stakeholders. We put ourselves in someone else’s shoes and think about how we would want to be treated if we were someone else. That leads to more empathy for our tenants, more transparency with our investors, and more community with our employees. You can’t go wrong if you’re thinking from the Golden Rule framework.
Ok super. Let’s now shift to the main part of our discussion about the shortage of affordable housing. Lack of affordable housing has been a problem for a long time in the United States. But it seems that it has gotten a lot worse over the past five years, particularly in the large cities. I know this is a huge topic, but for the benefit of our readers can you briefly explain to our readers what brought us to this place? Where did this crisis come from?
Beginning in the 1950s and 1960s, urban cores in the United States started to deteriorate. People left cities for the suburbs, and many cities became more affordable. That was actually a good thing. But, at the same time, property owners started neglecting their properties in the city, and thriving urban communities saw an increase in crime and poverty. For the past 20 years in particular, there’s been a rebirth of investment into our cities. Nationwide, we’ve been going through a “reverse urban flight,” and people are now leaving the suburbs for the cities. It’s great that our cities are getting more attention and investment, but the problem is that this is disregarding citizens who have lived in the cities since the original urban flight in the 1950s and 1960s. Many longtime residents are being forced out by this reverse migration .
Can you describe to our readers how your work is making an impact to address this crisis? Can you share some of the initiatives you are leading to help correct this issue?
Birgo’s core purpose is to “improve lives through real estate.” We genuinely believe that this is possible at all levels of the value chain: for our tenants, our investors, our employees, and the communities in which we invest. We acquire and operate workforce housing in the heartland of America but with a particular focus on how we impact the lives of those around us.. Again, people in this profession tend to acquire a bad reputation, so there’s a lot of opportunity to differentiate ourselves from most of our competition.
We’ve initiated innovative programs that allow delinquent tenants (those who fall behind on their rent payments) take a course on financial education. Upon completing the course, they get one month of back-due rent forgiven. We host pizza parties at our properties to build a sense of community between the residents and the property management staff. We’ve held crucial conversations with our tenants and employees to talk about issues surrounding racial and social injustice. Beyond programs like that, we simply don’t operate as a landlord who jacks up the rent just because we can. We work with tenants who have lived in one place for a long time to help them stay in the communities that they call home.
Can you share something about your work that makes you most proud? Is there a particular story or incident that you found most uplifting?
There are countless people who are still in their homes today because Birgo has worked with them through tough times. We’re incredibly proud of our team for how they have shown the ability to work with people that most landlords would toss to the street. Interestingly enough, though, I’m most proud of the fact that many of our previous tenants are now homeowners. This may seem strange but, we would rather lose tenants to permanent affordability than keep them as a tenant. It’s one thing to have an affordable living situation today, but it’s another altogether to have long-term housing security and stability, and that’s something that gets us really fired up.
In your opinion, what should other home builders do to further address these problems?
Real estate developers should keep this issue front and center. They shouldn’t shy away from the issue or pretend it’s not a problem. Usually, they are somewhat captive to their investors. If they start to tell the story to their investors about how their capital can make an impact for the betterment of society, instead of only focusing on return on investment in terms of dollars and cents, more of that capital will be directed towards ensuring we protect affordability in this country. Shifting the conversation is the key.
Can you share three things that the community and society can do to help you address the root of this crisis? Can you give some examples?
- A lot of this comes down to capital investment. If people want to make a difference in the affordable housing crisis, they must put capital behind it. This can be done by buying property directly in your community and ensuring that you make it affordable for the long term, or by investing capital with someone who cares about this cause.
- Start to spread a message of collaboration between landlords and renters. That relationship generally has a bad reputation, but positive relationships are possible. We should start to tell the stories of great relationships that leads to mutual flourishing. If your landlord is a good one, post about that on social media.
- Talk to your local government officials about how this is a problem in your neighborhood, and encourage them to do something about it. They have the power to lobby for funds to be directed towards this crisis.
If you had the power to influence legislation, are there laws which you would like to see introduced that might help you in your work?
Today, most of the government funding for affordable housing goes to new construction and development projects. We really wish there was more capital available to people like us, who are buying the existing affordable housing stock, to maintain and improve what already exists. It’s incredibly expensive to build new housing, and it can be much more cost-effective and sustainable to modestly upgrade already existing infrastructure.. We would love to see some funding be made available for landlords who have a passion for maintaining affordability in our communities, but without having to build from the ground up. Rent control programs can be helpful in some instances, but they can also have some unintended consequences.We would love to see governments be more innovative in how they approach this crisis by providing incentives for property owners to maintain affordable housing.
What are your “5 things I wish someone told me when I first started leading my company” and why? Please share a story or example for each.
- Celebrate differences. We’ve discovered that diversity in general — different ways of thinking, different backgrounds, different perspectives — makes us so much better. In business and in life, people often avoid hard conversations because they are, well, hard. But those moments where we see things differently, acknowledge other views, commit to listening, and learn from each other — that’s where we’ve learned the most and created the most good. As partners, we often come at things from different perspectives — Andrew might come at things from the employee perspective, Shannon from the tenant perspective, and Dan from the investor perspective. None of them is “right” — they’re all valid, and listening carefully and learning to elevate someone else’s point of view is where the magic happens.
- Clear is kind. Transparency and direct communication are what people really want. Don’t sugarcoat. We’ve learned to lead with the bad news for our investors. When we release quarterly updates, if our results aren’t what we hoped they would be, we acknowledge that, and we tell them why. We take ownership for any mistakes, learn from them, and send a clear message about how we plan to improve. It turns out that clear communication builds trust, especially when you have to be the bearer of bad news.
- Live an integrated life. “Work-life balance” is a big buzzword these days, and while the spirit behind it is good, we prefer to be fully integrated people, moving seamlessly back and forth between professional life and personal life. For Andrew, that might mean firing off emails late at night, but he got to play with his daughters before they went to bed. For Shannon, it might mean juggling taking the girls to a dance class or out for a walk in between an hour of work here and there. For Dan, it could be getting up at 4 a.m. to get some work done before his 3-year-old son gets up at 5:30 a.m., but leaving the office at 5 p.m. on the dot every day. Having passion and a purpose in your business is a key to living an integrated life, and if you can do that, “work” often doesn’t feel like work at all!
- Leading a company is not for the faint of heart. It can be a real emotional rollercoaster to lead a company! As a landlord, an employer, and a steward of investor capital, we are in a unique position of influence in many different people’s lives. We’ve had the opportunity to be alongside each of those stakeholders during significant moments of their lives — for the weddings and the babies being born, but also for breakups and funerals. We recently had a former tenant that wanted to return to her former apartment on the anniversary of her daughter’s death for a small memorial service. We accommodated her request and helped bring a little bit of closure for her. It was heartbreaking and beautiful.
- Storytelling is powerful. We’ve only recently begun to reach out to the world to talk about the things that are going on behind the scenes. We want to share our approach to property management and overcoming stereotypes with the world. We’re not just about profit; we’re about improving lives through real estate. When people hear about that, they want to know more and they want to be involved. When you have a story to tell, don’t be afraid to shout it from the rooftops. People love the philosophies that inform our story, and they usually want to be a part of it too.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
We would do exactly what we’re doing right now! Hopefully, our work is contributing to a movement that’s all about providing sustainable, dignifying housing solutions to the people that need it most, while delivering an attractive return on investment and a compelling mission for investors. We genuinely believe that the work we do in the real estate business is moving the needle for people that need affordable housing, and the more we tell this story, the more we think people will want to get on board and either be a part of what we’re doing, or create something similar in their own communities.
Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them. 🙂
We would love to hang out with Barack Obama. He could definitely help us solve the problem of affordable housing! This isn’t a political statement at all, but it would be incredible to dialogue with leaders who really understand and want to value all stakeholders. People who have had tremendous success but come from very low means tend to have a unique ability to see all perspectives, and that’s critical in our mission.
How can our readers further follow your work online?
This was very meaningful, thank you so much, and we wish you only continued success.