I grew up in the 12th Street corridor, on the west side of Detroit, in the ’60s. The neighborhood was packed with speakeasies and bars. It was one of the areas hardest hit during the ’67 riots. I was 17 years old when that happened. Let’s just say I had a lot of new clothes afterward. I didn’t burn anything down or shoot anybody or anything like that, but I took advantage of the open stores. I was a kid.

 

Anyone I knew making big money was working in the automobile plants. My high school principal came to me a month before graduation and said, “Cedric, have you ever thought about going to college?” I said, “No, I’m going to work at Ford.” He said, “If I could get you money to go to college, would you go?” I said, “I guess.” Well, he did, and it changed my life.

 

After college, I was a Navy officer for eight years in the Bay Area. When I came off active duty, I ran into an old high school buddy. He was driving a Mercedes-Benz convertible, and I was driving a Honda. He told me he was in commodities trading. I said, “Sounds great. What’s that?” He said, “You’d be a great salesman. Let me introduce you to my boss.” I had no idea I’d make a lot of money doing it. I was singing and playing guitar at the time in clubs around the city. I had dreams of being the next Bob Dylan or Richie Havens. I worked in finance for 25 years. In the ’90s, I got an M.B.A. and a Ph.D. in economics online. Before I founded Harley Stanfield, I was an executive vice president for Solomon Brothers.

 

In the brokerage industry, there’s a direct correlation between the amount of money you make and the amount other people lose. It made me a lot of money, but it also caused me to drink and drug, because when I went to sleep at night, I didn’t like who I was looking at. I just woke up one day and realized I couldn’t do it.

​

In 2003, real estate prices were skyrocketing, and I wanted to get in on the action. My idea was to buy houses, refurbish them, then act as a mortgage broker to sell the houses as investment properties. I also embraced the idea of going green — making more energy-efficient properties that burned up less oil. I discovered that it would cost about the same to do sustainable retrofits as it would to do regular ones.

​

Most of our customers buy anywhere from one to six homes with us. From the get-go, we insisted they had to have a FICO score above 700 and that they put down 25 percent equity, a minimum of $40,000. In the early days, it was hard to get clients. In 2004, you could have a FICO score of 550 and buy a house with 0 percent down; why would you want to do business with us?

​

In exchange for those requirements, though, we guarantee that within 30 days of closing, we will have a renter in there paying more than the owner’s monthly property-tax, mortgage, and insurance payments. We also guarantee that if owners hold on to the property for five years, we will buy it back for its initial value. Most of the properties are single-family residential homes in college towns like Ann Arbor or Gainesville, Florida, where rents are much higher than mortgage values. We have a three-man department that scours the Internet looking for houses that meet those parameters.

​

In 2006, as housing prices began to slip, people began to understand our model. The object should be to buy low, sell high, not buy high, sell higher. The people who financed houses with 0 percent down, they’re the ones in trouble right now.

​

Our retrofits cut energy usage anywhere from 50 to 75 percent. To entice renters, we require that owners pay for utility expenses. That’s easier to do when the monthly bill is $50 instead of $150. We’ll do a wind tunnel test before we renovate to find where air is leaking. Most of the time, we install energy-efficient doors, windows, and insulation. In 2008, we sold 60 houses. This year so far, we’ve sold 63.

​

We doubled our revenue last year. A chunk of that came from expanding into financing and consulting on other green projects. Last year, we picked up almost $7 million from our partnership in the Enchantment Way. We hope it will be the first LEED Platinum resort in Las Vegas. That’s the highest rating from the U.S. Green Building Council. We’re helping with financing and with the development’s green technology.

​

In April, we acquired a 50 percent stake in a company that grows and processes a plant called jatropha. It can be transformed into a high-grade biodiesel that’s perfect for jet fuel. We’re applying for Department of Energy grants to help fund buying land in Hawaii to grow it.

We’ve started looking at properties in Detroit, which has been inundated with foreclosures. We’re able to take advantage of people having lost their homes. But a lot of the stuff we’re buying, we’re going to turn into low-income residences.

​

The city has some 40,000 houses for sale in empowerment zones all over the city. The zones provide dispensation for buying houses and funding for green retrofits. We talked about the possibility of taking somewhere in the neighborhood of 1,000 houses off of their hands. They were glad to see us. We’d be able to sell energy-efficient, fully restored houses for $40,000, $50,000, which means property-tax, mortgage, and insurance payments will be somewhere around $350 a month. Owners can rent them back out as low-income housing or as regular housing for $500 a month and show a substantial positive cash flow. It’s the kind of thing that we dream of.

​

Two months ago, if you had asked me if I was going to go back and try to resurrect Detroit, I would have thought you were nuts. But Detroit is probably going to become our focal point. The numbers make it very, very attractive.

​

Now that I own my own company, I don’t have to worry about doing the right thing with our investors’ money. I don’t have any investors mad at me. We didn’t rip them off. When we sold them something, they didn’t buy a piece of paper; they bought a house.