Jonae Maxey, BBA ’21, always dreamed of being an entrepreneur.
Through her involvement in optiMize — a student-led organization at the University of Michigan that offers workshops, mentorship, and funding for students to create self-directed projects that make a positive impact — she has made that dream real. A native Detroiter and junior at the Ross School of Business, Maxey is laying the foundation for social impact through real estate.
Maxey discovered her passion for real estate investment during her sophomore year. She recalls having a major transformation in her business mindset after reading Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter. The book details how to achieve financial independence by investing; Maxey, who has always wanted to alleviate Detroit blight, was inspired to invest in real estate. Now, she wants to involve other Detroiters in that process.
She began her journey by building her network and industry knowledge. Maxey audited an MBA-level real estate class taught by Michigan Ross lecturer Peter Allen. Inspired by a Ross class in human capital management taught by Cheri Alexander, chief innovation officer and executive director corporate learning at Ross, Maxey began considering community development through business.
Maxey combined these classroom experiences with her passion for entrepreneurship. Through optiMize, she developed her real estate business.
“My purpose for Maxey Real Estate Investments is to revitalize inner-city communities within Detroit without displacing the community,” Maxey said. Awarded $8,000 from optiMize, her goal is twofold: buy and rehabilitate vacant properties in Detroit using Detroit-based businesses, then lease to Detroiters with rent or rent-to-own agreements.
Investing in Detroit
Maxey bought her business’s first property in December with the help of a private investor and started the property’s rehabilitation in January. The project’s momentum slowed due to COVID-19 disruptions. Demand within the housing market has halted as well, which presents a new challenge for Maxey. During this period, she is using the virtual fellowship to build her network with other real estate companies.
Maxey’s goal is to “connect with tenants on a personal level and also build a business around human capital, around people.” To address low rates of home ownership in Detroit, Maxey plans on renting homes with buyer-friendly, rent-to-own leases. In these land contracts, a portion of the rental payments will go toward buying the home.
Her model is different from other rent-to-own contracts, because Maxey intends on working directly with Detroit tenants to design payment plans that are affordable and manageable. Thus, the down payment, payment, and timing options will vary based on the individual.
To maintain profitability for her business, Maxey will incorporate a mix of rent and rent-to-own properties. “For the future, I will make most of my properties rent-to-own after some years of stabilization by renting them out,” she explained. After she has become financially stable, Maxey will focus on buying properties solely to position as rent-to-own.
Maxey is working to change the “narrative of what Detroiters see when it comes to a landlord and real estate in general.” She also wants to set an example for other young Detroiters to stand up for the community and bring everyone together.