National Football League running back LeSean McCoy admitted he had no idea how to handle finances earlier in his career. McCoy didn’t know how to monetize his high NFL salaries, and saving wasn’t an option either.
“Now that I’m in my 12th year in the league and looking at all the investments I’ve made, from good to bad, I think I’ve learned,” McCoy told CNBC.
It’s National Financial Literacy Month and McCoy says he’s more motivated to continue to “generate finance not just for myself, but for my family.”
Months after earning his second Super Bowl ring, while McCoy was on the Tampa Bay Buccaneers roster, the 32-year-old player is using the off-season downtime to wrap up real estate developments. McCoy and his brother LeRon run a real estate company Vice Capital. Now that McCoy’s playing days are almost over, he’s using the real estate investment route to build wealth after the NFL.
“We’re still starting up, but that’s the main goal,” said LeSean. He added that another mission is to help NFL players learn to “make money differently than just playing football.”
Vice Capital invests in distressed properties in lower-income communities and renovates buildings to create new homes and commercial space.
Using the McCoy brothers opportunity zones to develop some properties. Created as part of the federal Tax Cuts and Jobs Act of 2017, the areas provide developers with tax incentives for capital gains. They are designed to channel investment into underdeveloped areas of cities and help increase neighborhood values without triggering a rise in rent that would drive residents out of the rebuilt communities.
LeSean’s brother told him about the zones in 2017. But LeSean said he was skeptical when he learned the legislation was being passed under President Donald Trump’s administration. “Who is this for?” he asked his brother.
Before it became official, the legislation was used to be supported by US senators, including Sen. Cory Booker, (D-NJ) and Sen. Tim Scott, (R-SC). After examining the legislation and identifying the tax exemptions, LeSean determined it was a “win-win.”
“And on the other hand, as a humanitarian, you’re able to influence certain communities that need that change,” LeRon added. “Those are mostly inner-city areas.”
Former NBA player David Robinson also uses opportunity zones for development.
The McCoy brothers own 60 properties, some of which operate under Vice, including buildings in Birthplace of Harrisburg, Pennsylvania, and in Philadelphia where he played six seasons with the Eagles.
“We want to build that real estate empire,” LeSean said.
LeRon played in the NFL for the 2005 season with the Arizona Cardinals. LeSean played 12 seasons, was selected to six Pro Bowls and was part of the Kansas City Chiefs team that won the Super Bowl LIV. LeSean has made $63 million in his career, according to spotrac.
LeSean asked his brother to help drive Vice, which he launched in 2018 while continuing his NFL career.
“The hardest thing for players is confidence,” LeSean said. “My brother is a man I trust like no other, so that’s probably why it works so well with real estate. He’s constantly teaching me.”
During Covid-19, LeSean relied on LeRon to absorb the losses incurred for the company as construction was halted and residents occupying units were given protection from eviction. LeRon did not disclose financial details to CNBC, but said Vice’s losses were less than $2 million.
“We’re brothers, but he would fire me,” LeRon joked. “The biggest loss I can point to is not the dollars, but the opportunity.”
Before the pandemic, LeRon said Vice Capital was in negotiations to purchase a property near La Salle University in Philadelphia’s Germantown neighborhood. The property declined in value, but when Covid-19 sent property prices soaring, the owner pulled it off the market and then relisted it for double its previous price, putting it out of Vice’s reach.
LeRon said the pandemic is “putting pressure on things” as materials such as wood have risen, driving construction costs up. “But I would also say that it has made the seller’s market bigger,” he added. “Interest levels are cheap and everyone wants to buy.”
Here LeSean trusts his brother again. LeSean favors the sale of some high-priced properties in a red-hot real estate market. LeRon is against the idea.
“Sometimes we agree on things, and sometimes we don’t,” LeSean added. “But the good thing about our band is that I can trust him with business.”
However, the McCoy brothers cannot unload the Opportunity Zone properties. Investors get tax breaks on their capital gains if they leave their money in a select community for at least 10 years.
Although LeSean counts on his brother for business advice, he still has to decide his career as the 2021 season approaches. LeSean says he wants to play but remained unsure of a team’s interest.
“There are some teams that I probably won’t play for that reached out,” he said. “Hopefully other teams can agree on some things. It has to make sense.”
LeSean summed up his 2020 season, saying playing with Buc’s quarterback Tom Brady was an “amazing experience.”
“The whole trip, to see him and play with him… I scrambled against him when I played in Philadelphia (Brady was with New England at the time). He was like a drill sergeant, and when he really played with him , I could see he’s so intense and smart,” LeSean said. “I’ve never played with a quarterback like that where he’s 43. It was cool to see.”
As retirement is near, LeSean said he has options and real estate is the main game. Asked about stocks or investing in bitcoin, LeSean said he has tried the investments but is no longer interested.
“My thing is real estate,” LeSean said. “That’s something I understand. I don’t have to take anyone else’s word and the ups and downs – it’s just a lot. With real estate, I can see what’s going on; I can see my money, it touch and feel it.”