Circle of Capital: Building Black Communities (Part 2)

Recently I had a discussion with a group of real estate investors from other states and a topic that came up was how we, as people of color, can build wealth in our communities but avoid gentrification of those same communities.  I feel this is not only an interesting and enlightening topic to consider but I feel it directly relates to investing in a hard money lender like Epic Impact Investors.

Gentrification leads to a number of problems for the community, including the current residents getting priced out of their own neighborhood.  The opportunities for people within the community to invest locally close down and become less accessible. 

Real estate investment funds often come into the community without having a single investor from that community invested in the fund.  Not because there aren’t investors available, but because those investors didn’t even realize that there was an opportunity.

Don’t misunderstand, I’m not saying that we are trying to hinder investment in our communities. Those investments help build our communities up.  Those investments help raise property values, improve schools, and provide opportunities for the people who live there.

While we don’t want to discourage investments in the community, we would like to know about them ahead of time.  Even just a simple postcard or letter letting potential investors know that somebody is coming in to build 110 new units with mixed-use commercial and give us a chance to become an investor.  Put the people in the community on notice that there is an investment opportunity coming.

There are already local investors within the community, people who have a vested interest in seeing their property values increase, see the equity in their home build.  If we are given notice of this opportunity it gives us a chance to contact them to let them know we are interested. The investment fund should be open to having community members invest in these projects.  People can buy in and invest right in their own neighborhood.  Nobody has a greater interest in investing financially in a real estate fund than the people who live in the community.

It is probably not in anybody’s best interest to make it a burden on the funds to notify the community.  More community meetings or other red tape isn’t necessarily the answer, just a simple postcard will do the trick.  The funds don’t care that the money being invested in the project is coming from people who live in the community.  The interest of the fund is to get the finances, complete the project, and get a return for the investors.

Community leaders should care.  City officials, community officials, and municipal officials should all be aware of making the opportunity for members of a community to reap the benefits of investing locally.  Investors within the community have been sowing into the communities for years and should be able to reap the benefits of their efforts.  They have been participating in community events, creating relationships with neighbors, and boosting local school systems.  They have made this community someplace that has attracted outside investors so why should they be denied an opportunity to invest themselves.

Maybe the funds should be required to send notice to potential investors in the community so they could decide if they will be able to participate.  Requiring them to save some spots for local community members to invest might be a solution. Additional opportunities for wealth need to be created for people who are already established in the community.

We want to be a resource for our communities.  At the end of the day, we want viable communities of color.  We want sustainable wealth building.  All this can happen through our Circle of Capital. People of color need to know that this method of passive real estate investing is a viable way to build wealth and to get diversity in their investment portfolio.

We hope that you will join us as an investor.  Sign up for a free telephone consultation to let us know what your goals are for investing, ask us any questions you might still have.  Even if you aren’t ready to invest just yet, we can discuss additional steps you can take to get there financially. If you are ready to participate as an investor, if you are ready to make an impact in communities of color, please reach out so we can get you matched to a project.

Are you a real estate developer or have a property you want to flip here in the Chicago area?  We want to hear from you as well! Fill out our online application.  We’ll analyze your deal and send you an email walking you through the next steps. We look forward to working with you!