Motivation of Douglas Newby
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There are many reasons people become a real estate agent. Some love looking inside homes, some consider becoming a real estate agent as a way to economically leverage their contacts and wide circle of family and friends, others become a real estate agent as a second career. The motivation of Douglas Newby becoming a real estate agent might be unique – to benefit clients, neighborhoods and Dallas.
Preservation and Neighborhood Revitalization
When Douglas Newby was a student writing his master’s thesis at SMU on how to revitalize a neighborhood, Economic Incentives to Reverse Migration in an Inner City Neighborhood, and as a recent homeowner working to improve his new neighborhood of Munger Place and Old East Dallas, he realized there needed to be a marketplace for potential homeowners to be able to purchase deteriorated, divided up rent houses and renovate them into single family homes. With 10,000 real estate agents in Dallas at the time, you would think every neighborhood would have a marketplace and it would be easy to make a home purchase. Actually, it was not.
Prestigious Neighborhood Became Redlined
However, the Munger Place neighborhood, while once the most prestigious in Dallas, had become redlined with no conventional home loans available since the properties were primarily absentee owned and had deteriorated for 30 years. Lenders were not interested in loaning money for home purchases in a neighborhood of homes divided up into weekly rental apartments. Real estate agents were not interested in selling homes for a commission equal to selling a Kirby vacuum cleaner. It is in this environment that Douglas Newby became a real estate agent.
Co-Founding the Historic Dallas Fund’s Revolving Fund was not Enough to Revitalize a Neighborhood
Douglas Newby initiated and co-founded the Historic Dallas Fund with Virginia and Lee McAlester. This was a nonprofit initiative set up to buy 21 six-month to two-year options on Munger Place deteriorated properties from absentee owners so these properties could be resold with preservation deed restrictions to individual homeowners who would convert these divided-up rent houses back to single-family homes.
I had developed an investment strategy and the three of us set up an organizational chart of committees and committee chairs. But at that point, it became apparent there was not a real estate firm or agent who could negotiate these options. One afternoon at a meeting, Virginia and Lee turned to me and said, “You are the youngest, a student, and don’t have a robust income anyway, so why don’t you obtain your real estate license for the cause and negotiate these options.” I realized that if I did not obtain my real estate license and negotiate these options, the revolving fund would never get off the ground.
I recall then going on a car trip with friends to Oaxaca for their academic purposes, sitting in the back seat studying to obtain my real estate license. On my return, I took the exam and passed. My first real estate transaction was negotiating 21 options from multiple owners that were all executed in approximately one week so the prices in the neighborhood would not go up. This allowed the Historic Dallas Fund to later simultaneously close on the purchase of a home and resell it to a homeowner with deed restrictions. The Historic Dallas Fund was successful and the preservation effort was successful.
Because of the Historic Dallas Fund, the Historic Preservation League, now Preservation Dallas, was able to hire its first executive director with the profits from the Historic Dallas Fund. The preservation deed restrictions allowed the exterior of the homes to be protected and renovated in a historically accurate way.
I continued my work as a real estate broker in Munger Place, shepherding these transactions on houses that were the most difficult in Dallas to sell. While urban economic professors, city planners, and most of Dallas thought a few artists and urban pioneers might take the risk to move into this deteriorated dangerous neighborhood, they said we could never find 200 much less 2,000 homebuyers to do so. The naysayers were right. What I realized, but they didn’t, was that every time I sold a rent house to a homeowner, the neighborhood would incrementally improve and make the area attractive enough for two or three more homeowners to take the risk. Every time a home was renovated, the neighborhood would improve and the pool of potential homebuyers would expand. Eventually 2,000 homes were renovated and the historic neighborhood, instead of being torn down, had $1 billion of appreciation.
Experience Selling Homes in the Hardest Neighborhood Made Selling Homes in the Best Neighborhoods Easy
My experience selling the hardest homes to sell in Dallas defined my approach and understanding of residential real estate. Since some of these homes one could barely walk into, and the floorplans and front facades were mangled, I would hire an architect to draw the original front facade and floorplan. I would also have a contractor give an estimate on the cost to renovate the home. I realized the easier it was to understand these difficult homes, the more likely a buyer would purchase them. When I began selling the homes in Highland Park and Preston Hollow, this gave my clients selling a home a huge advantage. I was the only real estate broker in Dallas at the time who provided floorplans for existing homes, and other information and materials the buyers found useful.
Homes are Preserved and Provide a Good Investment for Buyers
My experience has not changed from my first transaction. Every home that I have sold since my first transaction of 21 options, the buyers who purchased a home with preservation deed restrictions have made a great investment. My clients who purchased a vacant lot or a historic home to renovate that did not have preservation deed restrictions also made a great investment.
Information on Neighborhoods Increase the Value of a Home
Another thing I have learned from my earliest real estate experience was the more a homebuyer knows about a neighborhood, the more attracted they will be to a home in that neighborhood. This was true in a neighborhood that has been revitalized, and it is true in the most expensive neighborhoods in Dallas, and it is especially true in the luxury niche neighborhoods that do not have as many comparables and as much easy economic data to rely on.
When Buyers Invest in Homes, the Neighborhood Improves and Dallas Improves
A concept that continues to motivate Douglas Newby is his understanding that every time a home is preserved or a home is renovated or an architecturally significant home is built, the neighborhood improves and as a result Dallas improves and becomes more attractive to homebuyers that are moving to Dallas from around the country.