Spring 2025
The Atlanta-based real estate investment firm enlists its residents as partners to care for their properties and grow wealth together
By Katja Ridderbusch
Daniel Dorfman’s advice to landlords, large and small, is to be hands-on. “Go out into the streets. Talk with the people who live in your properties. Understand what they like and what they miss,” says the cofounder and CEO of Seed InvestCo, widely known as Roots, an Atlanta-based boutique real estate investment firm with a large social mission.
Daniel practices what he preaches. Several times a month, he meets with some of his tenants. The company’s 38 employees are constantly online and on the phone researching, surveying, and explaining the Roots model, which is designed to help renters build wealth by partnering with property owners.
It’s a model that combines the human connection with advanced technology.
SOWING SEEDS OF CHANGE
Daniel was involved in several start-ups and real estate ventures before founding Roots with his father, Larry Dorfman, and their longtime business associate, Scott Jacobsen, in 2021.
Traditionally, property owners and renters have an adversarial relationship. “We wanted to shift the attitude and create a win-win situation, where both owners and residents benefit,” says Daniel. Even the language matters: The Roots team tries to avoid the words “landlords” and “tenants.”
Roots falls into a larger trend in the residential real estate market, especially the workforce and affordable housing sector, says Terri Montague, a senior lecturer at Emory University’s School of Law. “Affordable housing is no longer considered a public good,” she notes. “We’re seeing a commercialization of low-cost housing, with more for-profit players moving into this space.” Atlanta, she adds, “has become ground zero for this trend.”
Models like “rent to own,” which allow tenants to rent a property with the option to buy it later, have sprung up around the country. In Atlanta and other cities, forprofit and nonprofit organizations have formed joint ventures, and corporate players try to give their workforce housing projects “more of a community look,” says Montague, who has worked for the U.S. Department of Housing and Urban Development and served as the founding president and CEO at Atlanta Beltline.
Roots sits “somewhere in the middle,” she adds. The company is for-profit but has a nonprofit arm, which provides rental assistance to people who may be facing unexpected hardships.
There’s a community look and feel to the Roots office building in Midtown Atlanta, which blends in with the area’s eclectic mix of historic single-family homes. Desks are scattered around the second floor, where a large neon sign emblazoned with the words “Humans Helping Humans” greets staff and visitors, and the smell of freshly brewed coffee fills the air.
In the dimly lit conference room with forest-green walls, Larry’s bulldog Chubb (named after Nick Chubb, former UGA running back, now with the Cleveland Browns) snoozes on a velvet chaise.
“Real estate is an amazing tool for building generational wealth,” says Daniel, who has the casual charm of a West Coast tech entrepreneur. But the majority of Americans don’t make enough money to invest. There are 44 million renters in the U.S., and the average renter has $630 in cash savings, according to Harvard University’s Joint Center for Housing Studies.
BUILDING FOR A BETTER FUTURE
It’s a huge market to tap into, says Larry. Born in Brooklyn, the son of a kosher butcher, he’s a lifelong serial entrepreneur. He founded and led APCO Holdings, a provider and administrator of automotive finance and insurance products, and stepped out of retirement to help launch and grow Roots.
Larry says he’s passionate about the company’s mission and the business opportunity. “We are commercially motivated and community-inspired.”
Roots calls its model: “Live in it like you own it.” Roots is a privately held Regulation A+ Real Estate Investment Trust (REIT), and its name has become synonymous with the company itself.
In the Roots fund, investors and renters grow wealth together. Similar to entry-level investment tools like Robinhood and Acorn, anyone can invest as little as $100. Instead of putting their security deposit in a traditional escrow account, renters have the choice to put their deposit into the fund, at an average annual return of over 17 percent.
Renters can earn $150 in rebates each quarter if they meet three requirements: Pay their rent on time, have no lease violations, and record short videos inside and outside the property every three months. The rebates go into the fund. The idea is to create incentives for renters to take good care of the property and to identify small issues early before they become major—and costly—repairs.
If residents meet their requirements four times in a row, they earn a $200 bonus, as they do when they renew their lease. Over five years, residents could earn, on average, $7,500 in their wealth-building account.
TAKING ROOT
Roots manages its properties through its proprietary resident engagement software called Bloom. Since its founding in 2021, Rootshas acquired 188 properties, mainly single-family homes, with about 475 individuals and families currently living in them. Most are preexisting rentals located within a 20-mile radius of downtown Atlanta. This year, the company plans to buy properties in Augusta and expand to cities around the Southeast, including Birmingham, Nashville, and Charlotte.
Roots says it uses third-party tools like Zillow to price its units. More than 80 percent of the units are priced below the median market rent, according to the company.
In the screening process for renters, Roots checks off the standard categories, like credit and rental history, criminal background, and employment status. Applicants who, during the interview, seem particularly excited about the Roots model and are eager to start building wealth “are the people we want to have as partners in our properties,” says Larry.
He adds that the majority of Roots’ residents are single parents who work two jobs and don’t have a lot of extra money to invest.
GOOD FOR PEOPLE, GOOD FOR BUSINESS
“I am Roots,” Derrick Hendrix likes to say whenever he’s asked about Roots. Hendrix has been renting with Roots since August 2024. He’s proud of the midnight blue four-bedroom, two-bathroom ranch house in South Atlanta he lives in with his seven children, ages one to 15. Bikes and toys are scattered around the entrance. “We’re happy. We feel safe. This is home,” he says.
Hendrix learned about Roots through an acquaintance, and when Larry offered to rent him a house, “it sounded too good to be true,” he says.
Hendrix, who’s from Florida, moved to Atlanta in 2014. He has worked as a FedEx driver, a flagger on construction sites, a state-certified bail recovery officer, and now has a small company that handles property and event security.
His previous tenant experiences were terrible, he says. Relationships with property owners and management firms were tense. He’s lived in four rentals since moving to Atlanta and recalls paying for a lot of repairs and upgrades over the years.
His last home caught fire, and he ended up moving into a hotel with his children. That’s when he was introduced to Roots. “I was skeptical. I’m not gonna lie,” says Hendrix. “But then I decided to just trust.”
So far, he hasn’t regretted it. The house is close to his kids’ schools and daycare. “I have no safety concerns, and I’m not worried that there will be a busted pipe,” Hendrix says.
Hendrix wants to hold up his end of the bargain. He’s fulfilling the requirements and has even invested extra money into the Roots fund. He’s sent short videos of the home and yard and his kids playing there. “It’s not just documenting things that don’t work. It’s documenting how a family lives and grows together in a home,” he says.
Hendrix also takes advantage of the educational opportunities that Roots offers through its community partners, like webinars on financial literacy. Now that his housing situation is stabilized, he’s also looking into improving his credit. And maybe, one day, he may purchase his own home. “That’s my long-term goal,” he says with a smile.
A key part of the Roots mission, Daniel says, is “to help create a path to homeownership and upward mobility for our residents while they help us take better care of our assets.” He notes that the cash value accrued through investing in the fund won’t pay for a new home, but it may offset some of the costs associated with purchasing real estate.
“THE FACT IS, YOU’VE GOT TO BE PROFITABLE. YOU’VE GOT TO MAKE MONEY TO MAKE AN IMPACT. AND AS A BUSINESS, WE’VE PROVEN THAT WE CAN DO IT.” — LARRY DORFMAN
More importantly, there is a psychological aspect to it. Larry adds that the experience of investing and building wealth, combined with financial education, instills in residents a sense of confidence as they are looking to become homeowners.
Roots also assigns case managers who help renters along the journey. If, for example, a resident faces unexpected expenses—such as a major car repair or medical bills—they can tap into their Roots wealth-building account instead of running up debt.
The model may sound almost altruistic, but there’s more to it, Larry notes. Not only do renters benefit from the model, but so does the company’s bottom line. Roots residents renew their leases at a rate of 83 percent, which is higher than the national average of 62 percent, according to RentCafe which collects private and public housing data.
As a result of lower tenant turnover and better property maintenance, Larry says Roots’ turning costs are way down. These are expenses occurring when a renter moves out, including cleaning, repairs, painting, and any necessary replacements to prepare the unit for a new tenant.
PROPAGATING THE MODEL
Housing expert Terri Montague thinks the Roots model holds promise. For one thing, its intention is “helping residents build wealth instead of simply extracting wealth.” Also, unlike typical corporate landlords, Roots “seems to focus on personal interactions with the tenants,” she says.
But questions remain, she continues. For example, how Roots—and companies implementing a similar concept—are handling the entrance of artificial intelligence into the real estate sector. While AI tends to boost efficiencies, it also drives a trend towards depersonalization, says Montague.
Roots’ founders appear confident as they embark on this difficult balancing act. The company has licensed its Bloom resident engagement software and is selling it to other players in the real estate marketplace, mainly property owners and managers.
“We want to focus on mass user adoption of our platform and share our playbook on how to engage residents in a new and different way, by aligning our interest and our mission,” Daniel says.
One of the companies that has launched a pilot program using Bloom is the Integral Group, a real estate developer with properties in Georgia (mainly Atlanta) Savannah, and Columbus, as well as Texas, California, Colorado, and other states. Projects range from retail to residential, lowcost to luxury.
The Bloom software, including the option to view uploaded resident videos, “provides the opportunity to [see] inside the units more regularly and in a much less invasive manner,” says Rian Smith, the Integral Group’s vice president and chief legal officer. Tenants can shoot and share videos on their own schedule rather than having to work around inspectors’ timetables.
It also helps manage limited staff more efficiently, she adds, “so that maintenance technicians can focus on actual repairs instead of inspections.”
The Roots founders say it’s all about making and growing their impact in the workforce housing market and the community, whether through business ventures or philanthropy. “The fact is, you’ve got to be profitable. You’ve got to make money to make an impact,” says Larry. “And as a business, we’ve proven that we can do it.” By 2028, Rootsaims to expand real investment opportunities to 1 million renting families, in Georgia and across the country.
Copyright: GaBiz Magazine / Katja Ridderbusch