“I really do enjoy exploiting the poor,” Thomas Cruz said on TikTok in the fall, cackling from the balcony of his new waterfront mansion in Miami.
Cruz, 35, says he built his wealth off Wilmington real estate by figuring out how to rapidly scale what he calls an arbitrage model: Buy run-down homes for cheap, do as little maintenance as possible, lease them to people poor enough to qualify for government assistance programs, and turn a pretty profit.
He dispenses advice to his 1.2 million online followers about how to do this, too, alongside videos that show his first-class travel to the World Cup, fancy cars, and a yacht.
All paid for by you, he often reminds viewers, the American taxpayer.
But back in North Carolina, records and interviews reveal Cruz left behind a portfolio of neglected rental properties. Wilmington’s code enforcement department filed legal claims against him at least 25 times between 2019 and 2022 to compel his compliance. Before he sold most of them last year and left town, Cruz had been cited for 366 violations at 49 properties. He was “definitely our biggest landlord problem” at the time, a city code official told The Assembly.
“If y’all wanna fuck the middle class and the poor at the same time, lemme hear a ‘hell yeah’ in the comments,” Cruz implored a live TikTok audience of roughly 1,000 on the Sunday before Thanksgiving.
A chorus of “Hell yeah” poured into the chat.
For The Assembly, Johanna F. Still and Kevin Maurer dig into Cruz’s business model. Read the story: TikTok's Prince of Poverty
You can find this and other editions of The Dive here.
Benjamin Schachtman: Alright, Johanna Still, thanks for being here.
Johann Still: Thank you.
BS: So on the most recent episode of The Dive, you had a long look at former Wilmingtonian – Thomas Cruz. For people who don't know who is Tom Cruz, the other Tom Cruz?
JS: The other Tom Cruise, who has no relation to the actor, he was around here for college around 2010. And then he really got invested into real estate in the 2019-2021 timeframe. He was sort of a fixture, I guess you could say, he would ride his Lamborghini down in some of the most low-income areas of town. He really created quite a spectacle of himself. And he was also a huge landlord. When I say huge, I mean, he had – he says – upwards of 400 properties in the Wilmington area. And so a lot of people were familiar with him because maybe they were his tenants, or they had seen him riding around; he would do random acts of philanthropy, big tipping. He also attracted quite an audience on TikTok, where he has over a million followers now.
BS: Right, so on TikTok, he showed off a globe-trotting lifestyle, fancy watches, trips to the Middle East. And he also was pretty transparent about how he had made the money that was supporting that lifestyle, which is kind of the meat and potatoes of this story. So how did Thomas Cruz get so rich?
JS: Right, not only is he transparent, he's selling courses so that you can get rich just like him too. So his bread and butter, he claims is Section Eight, which is a form of federal government housing, that pays a voucher directly to the landlord, so it's guaranteed. And in some places it's the full amount, in Wilmington, it's almost all of the full amount of rent. And these tenants basically receive almost all or totally free rent. And the landlord gets guaranteed federally-backed government-paid-for rent. And so what he did is what he calls a Section Eight arbitrage model, where he basically bought rundown houses. And so this is in pre-market-going-insane times 2018, 2019 in Wilmington. He was buying properties, a lot of them for less than $100,000 (you can't really do that now). And then he was renting them out for the market rate rent that is set and capped by the government and basically making, he says, a big profit doing this model. And what makes him unique, what makes him interesting, is that he has absolutely no shame about, you know, his business model and him saying that he's exploiting poor people. He really, he's actually adopted this sort of villainous persona in his TikToks and talks about how he loves to exploit poor people.
BS: Right. And we should say that Section Eight housing and Section Eight landlords fill an important void in the housing market. I know specifically here in Wilmington, there's long wait lists, we just need more people who are willing to accept tenants whose rent is paid, at least in part, by Section Eight. But Thomas Cruz's approach to this – as you said villainous is probably a good word – self styled as exploiting both, you know, the taxpayer and his tenants. And he put a pretty fine point on it in one quote, that's in your story.
JS: Yeah, exactly. He, you know, he frequently will tell you, you know, you paid for this speaking and referring to American taxpayers. And you know, in one TikTok live right before Thanksgiving, he was speaking to an audience of about 1,000 people who tune in to his lives and was saying, you know, “if you want to fuck the middle class and poor people at the same time, let me hear a hell yeah in the comments” – and ‘hell yeahs’ just came pouring in. And so that's what's interesting is that he has a following, right? So he's attracting people. People are obviously interested in the message he's sending. They're interested in, obviously, his wealth and the business model that he used to obtain it.
BS: So it is a fascinating profile of one of Wilmington's most, let's say, infamous landlords, in the most recent episode of The Dive, Johanna Still thanks for this reporting, and thanks for being here.
JS: Thanks for having me.