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Real Estate

Published on
9 mins read

Unveiling Alternative Investment Opportunities in Real Estate

Alternative Investment

In the ever-evolving landscape of real estate, savvy investors are increasingly seeking alternative avenues to diversify their portfolios and maximize returns. As the demand for creative investment solutions continues to surge, a distinguished panel of experts is set to take center stage at the highly anticipated Diversity in Commercial Real Estate Conference, scheduled from July 27 to 30, 2023.

On the 28th of July, a panel of real estate trailblazers will converge to shed light on “Alternative Investment Opportunities” in the real estate sector. This panel includes Osei Rubie, President of National Standard Abstract and Reside in Opulence; Vernon J., founder of EquityCoin and Maurice Russell Grey, co-owner of ESRA Realty.

Navigating this insightful discussion as the moderator will be Leonard Smith, a Managing Partner at East Chop Capital. The panel promises to be a compelling blend of knowledge, experience, and foresight, sharing invaluable insights into three distinct areas of alternative investments.

Interviews

Prior to their upcoming panel session, we had the chance to catch up with several panelists to explore their noteworthy investment deals and how these align with the world of alternative investing. These insightful interviews offer a glimpse into the expertise they will bring to the table on the 28th of July.

Osei Rubie

Alternative Investment

Reside in Opulence has achieved notable success in the luxury short-term rental market. Could you share a specific project or success story that exemplifies the potential returns and growth opportunities in this alternative real estate investment niche?

In 2019, we acquired our first property in Edgartown, Martha’s Vineyard for $685,000. Leveraging insights from the established Black Eco System of property owners on the island of Martha’s Vineyard following “best practices” shared by friends and owners, we elevated the renter’s experience with branded bathrobes and towels.

Our goal is to create tailored luxury experiences for our renters. A successful renovation project allowed us to command over $1,000 per night, significantly higher than the previous rental income. In 2022, we sold the property for an impressive $1.5 million, demonstrating the lucrative potential of this alternative real estate investment niche.

In addition to short-term rentals, you have also achieved success in the title insurance industry, approaching $3 billion in closed deals. Can you share a notable deal that you believe demonstrates the potential of alternative investment opportunities in commercial real estate?

A notable example of the potential in alternative investment opportunities in commercial real estate is the Glenmore Manor Development Project in Brownsville, Brooklyn.

This transformative project includes the development of 233 units of affordable housing, almost 19,000 square feet of commercial/ retail space, and a community facility to support future entrepreneurs. The successful closure of this ambitious $175 million deal in June 2023 marks one of our largest transactions this year.

The Glenmore Manor Development Project not only demonstrates the potential for significant financial returns but also showcases the positive impact real estate investments can have on revitalizing communities and fostering economic development. Our team of title insurance experts at NSA was grateful to work on this monumental project.

Vernon J.

Alternative Investment

Affordable housing is a pressing issue globally. How does EquityCoin® address the challenges associated with funding and financing affordable housing projects?

As the first digital token backed by government voucher-based affordable housing, EquityCoin® houses families in danger of becoming homeless, while offering local community members the ability to own fractions of real estate equity. Through the use of Crowdfunding and Real Estate Tokenization, shareholders gain access to residual cash flow and benefit from the increased liquidity that blockchain technology provides.

We’ve white-labeled our system by developing a Crowdfunding and Tokenization platform called EquityShare, which allows community developers all over the country to raise up to $5M for their affordable housing project and tokenize their equity so that everyday investors can build generational wealth through fractionalized real estate.

What unique advantages does the use of digital tokens on the blockchain offer in terms of transparency, accessibility, and scalability?

Blockchain is a revolutionary technology disguised as a casino. Many people are caught up in the ‘hype’ of the wild crypto price swings, while unaware of the efficiencies that the underlying tech is bringing to traditional markets such as real estate investing.

By placing financial systems on the blockchain, there is increased transparency as all transactions are recorded on an immutable ledger, dividend payments are streamlined, and real estate syndicators have an incredibly clean way to manage their investor base. I see blockchain as the internet of accounting, transforming antiquated spreadsheet models into dynamic chains of value.

Maurice Russell Grey

Alternative Investment

ESRA Realty has facilitated over $30 million in property sales and has been actively involved in various types of real estate transactions. Could you shed light on the particular focus or niche that your company has carved out within the Harlem market?

Our firm was founded in 1929, by my Grandmother and her 2 sisters, who immigrated from Guyana in the 1920s. We are currently the oldest Black owned real estate company in NYC. The period of the late 20’’s to early 30’s in Harlem is commonly referred to as the Great Migration, because thousands of Blacks from the South and the Caribbean flooded NYC and desperately needed housing.

This led to a boom in Harlem and the period knowns as the Harlem Renaissance. For almost the last 100 years we have provided valuable housing services such as helping Blacks buy properties when it was extremely difficult to do so, helping them get financing, and assisting them in managing their properties. We are experts in the Harlem, market selling everything from HDFC coops, to luxury brownstones, to multifamily apartment buildings.

Could you share a specific example of an alternative real estate investment project that you have been involved in and explain how it presented unique benefits or challenges compared to traditional investments?

Our company was heavily invested in multifamily real estate in Harlem, and during the late 2000s through 2020, Harlem properties experienced a boom in value. The problem was, the cash flows on the properties were no longer in line with the high perceived values.

We were able to sell several of those multi-family properties at peak value and move them into the triple net sphere which doubled our cash flows. Triple net is a completely different realm than multi-family, very hands off, and you aren’t able to force appreciation like multifamily, but it has its benefits, which include large residual incomes, backed by corporate credit. Real estate is by definition cyclical, so it’s always important to remain flexible and keep up to date on other avenues within real estate. There will be a point when you need them.

by Tony O. Lawson

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Published on
4 mins read

Black-Owned Real Estate Development Company, Reside in Opulence, Gains Momentum in Luxury Rental Market

reside in opulence

Father-son duo Osei and Nadir Rubie are quickly gaining momentum as luxury real estate developers in the vacation rental market after launching Reside in Opulence, a luxury real estate development firm.

From new construction to property acquisition and renovation, the New York-based firm creates experiences that combine luxury, leisure, and legacy. Their objective is to transform properties within historic, picturesque, and oceanfront communities where they can increase their value while generating revenue through short-term rentals or resale. Past projects include renovating single-family homes in Martha’s Vineyard, Long Beach, and the Poconos. 

After years of renovating other properties while conducting luxury market research and analysis, the self-taught real estate developers, purchased their first short-term vacation property in Martha’s Vineyard in 2019. The one-level ranch style house had four bedrooms, two full bathrooms, and outdated popcorn ceilings. When it was sold, Rubie and his son more than doubled the original purchase price.

Martha’s Vineyard, MA

Each acquisition was intentional, ensuring that all properties offered enough latitude for the redesign and renovation phases to achieve a finished high-end product. Through branded merchandising and a host of amenities, especially the entertainment options, Rubie and son saw increased bookings for their vacation properties. 

The Poconos property features four bedrooms, three bathrooms, a large outdoor patio; a grand family room with cathedral ceilings and fireplace; a wine cellar; a gym; a modern entertainment center; a full-size movie theater with luxury seating; gaming tables to play air hockey, cards, and dominoes; a state-of-the-art lower terrace with vintage full-size arcade machines and over 300 “old-school” games such as Super Mario Brothers, Donkey Kong, and Street Fighter.

reside in opulence
Poconos, PA

The Long Beach property, located half a block from the beach, has a modern design and multiple decks for relaxation and sunbathing. This three-level property also has a rooftop with a view, barbecue grill, spa room with a sauna accommodating 3 to 4 people, a 54-inch soaking tub, and a custom shower to feel zen. 

reside in opulence
Long Island, NY

“We are excited to embark on this new journey, an opportunity for my son and I to design an oasis for our guests to experience in some of the top vacation rental markets in the U.S. Together, we are building our legacy as a family, but also people of African descent gaining more market share in an industry that has historically excluded us,” said Osei Rubie.

“With every transaction, our commitment to community building and economic development deepens because we recognize the correlation between representation and generational wealth. One cannot exist without the other if we want to strengthen and uplift the African Diaspora,” said Nadir Rubie. 

Reside in Opulence is a state of mind cultivated through design concepts, high-quality building materials, and appliances. The smart homes offer ease with state-of-the-art technology to easily control the entry door locks, thermostats, and in-ceiling SONOS speakers while QR codes keep the instructions and frequently asked questions in the palm of your hand. Their guests come year-round for the serenity of the mountains or the beach to rest, relax, and rejuvenate.

Rubie and his son are no strangers to success, recently closing over $2 billion in transactions at National Standard Abstract – the title insurance experts in residential, commercial, and faith-based developments. Diversifying their housing portfolio with luxury short-term and vacation rentals will exponentially increase their business footprint and social impact. 

 

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Published on
1 min read

Daryl Carter on Building a $4 Billion Real Estate Investment Firm

daryl carter

Daryl Carter is the founder and CEO of Avanath Capital Management, a real estate investment firm that specializes in acquiring multi-family apartment communities across the United States.

With almost $4 billion dollars worth of properties acquired in 15 states since its establishment in 2008, Avanath Capital Management is one of the largest Black owned real estate investment firms in the country and the largest Black owned affordable housing investment firm.

daryl carter
7 Dekalb (Brooklyn) 251 units | Acquired January 2023

Notable purchases include a high-rise in New York for $101 million, two properties in California for $132 million, and a recent acquisition in Chicago for $119 million, which is one of the largest deals in the city’s history.

daryl carter
Lincoln Park Plaza (Chicago) – 256 units | Acquired March 2023

In this interview, Daryl shares:

  • His thoughts on the current state of the affordable housing industry and future predictions.
  • His strategy for attracting institutional investors.
  • How affordable housing investors can position themselves for success in this economic climate.
  • Commercial real estate markets he is interested in.
  • Personal characteristics that entrepreneurs need to have.
  • The importance of including Black owned businesses in his ecosystem.

by Tony O. Lawson

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Published on
16 mins read

Three Black Developers Drive $400 Million Revenue to Black Business Ecosystem

black developers

The real estate development industry has long been dominated by white-owned companies, with only a small fraction of the 112,000 firms in the United States being Black-owned.

However, Black real estate developers are proving to be just as successful as their white counterparts, and they are also more likely to hire Black owned businesses.

This creates more opportunities for these companies to participate in larger projects and provides economic empowerment for these businesses to reinvest in their communities through scholarships and other empowerment activities.

Despite their success, Black developers still face many constraints, including a representation crisis, a revenue gap for medium-sized Black developers, and revenue cliffs for large Black developers. However, removing these constraints could be an opportunity to increase wealth in Black communities and expand the overall economy by creating many new jobs.

In this article, we interview a group of Black real estate developers to discuss their experiences and perspectives on these issues.

Ericka Keller – Managing Member, Brisa Builders Development.

Ericka Keller

How has being a Black developer influenced your approach to community engagement and creating economic opportunities for other Black-owned real estate-related businesses?

Being a Black developer is intrinsically tied to my approach to real estate development. From my perspective having a strategic plan regarding the path to economically empowering other Black and brown businesses is a fundamental component of the development process,  just as much as having a zoning analysis completed, an environmental study completed, and a budget, which we all know are usually the first steps in developing a project.

Every development has to be viewed through the lens of not only real estate but also through the lens of developing minority-owned businesses because that is the only way to truly close the economic disparity and racial inequality.

One of the first questions that I ask for every project is “What Black or Brown-owned business can I engage for  various aspects of this opportunity?” Who is the best fit for this opportunity? I truly believe that it is the responsibility of every Black developer to take this approach to their development projects – to consider every sector of the development process and seek out and research Black businesses for varied opportunities.

Can you talk about projects you’ve worked on where you specifically prioritized hiring Black-owned businesses? What impact did that decision have on the project and the community?

We take this approach seriously for all of our projects, however, I would like to highlight one of our substantial projects,  Ebenezer Plaza which is a three-phased project in Brooklyn,  New York producing 523 units of deeply affordable housing, 22,000 sq. ft of commercial retail and 40,000 sq feet of community facility in the form of House of Worship.

In this project, we went well beyond the required minority participation as stipulated by the city policies. The General Contractor was particularly deliberate in ensuring that the supervisory personnel on the job site represented the community’s diversity, with the Superintendent Project Manager and Assistant Project Manager being Black. Additionally, we enlisted the services of various Black-owned businesses, including National Standard Abstract, a title insurance company. Moreover, we exceeded the city’s mandate on the minimum amount of contracts required for minority and women-owned businesses by doubling the number.

For one phase of the project,  which required $6 million worth of awarded contracts to certified M/WBE firms, we had over $12 million worth of contracts, which still didn’t capture minority and women-owned businesses that were awarded but choose not to certify their status with the city as well the employment opportunities that occurred for black and brown people during the construction period. The reported numbers above also don’t capture the other strategic ways to empower minority and women-owned businesses like our choice to hire an MWBE property manager and minority-owned social service provider.

Kenneth M. Morrison  – Managing Member, Lemor Development Group

black developers
Ken Morrison

What role do Black developers play in addressing the housing affordability crisis, and how can the industry as a whole work to create more equitable access to housing?

In the US, affordable housing does not get done without government assistance. Starting with that premise, legislatively; that means that Black developers need to be a part of the legislative process. We should be heard and part of the process when programs are being created/updated and we should also play a significant role when those programs are put in place. Many times Black developers come from the same type of communities they develop in.

They can relate to the communities they develop in. For the community members to see and work with developers who look like them creates an intangible benefit from these interactions. Black developers have the same capacity to deliver competent work and returns to investors just like all developers. The issues begin when Black developers are challenged with smaller, harder to execute deals that get pushed back so municipalities can focus on larger developments.  This is a major pain point for Black developers.

Municipalities need to fundamentally change how they prioritize funding of developments. When Black developers have the same access to deal flow, they will grow and can execute larger developments that will help alleviate the affordability crisis. If this issue is addressed, Black developers will have the opportunity to compete in the affordable housing space.

Prioritizing Black developers getting deals done not only grows the capacity of these companies but since the majority of these developments are in areas that need affordable housing, you begin to see higher prioritization of local hiring, reduction of blight, locally based business growth, and Black dollars circulating in the community a little longer.

What advice would you give to other Black developers who are struggling to access capital and secure funding for their projects?  

Collaboration and partnerships are the keys to growth in this business.  Not only for the capital and funding but when growing capacity; collaborations with experienced developers are a tool for growing capacity. The capital space is slowly beginning to open up to black developers, but it is nowhere as equitable as it should be.

Leaning into capital funders who are doing business with Black developers is a good place to start.  It is also important to know what funders are looking for. Your company’s administrative structure needs to be in place with a clear delineation of roles, in particular, how are finances handled. Who is preparing your financial statements etc., are questions funders want to know.  Even if you don’t have a CFO or someone on your staff working on your financials, think about using a third-party accounting firm to serve as your company’s CFO.

This is a primary area funders focus on.  If you don’t have this in place, funders will not have confidence in funding your organization or project.  Also, seek funding from organizations that fund the sector you practice in.  You can find lenders, funders, pre-dev financing, and debt specific to your sector.  In particular, around affordable and workforce housing, there are funding sources specific to that sector.  There are increasingly more dollars available for green development and conversions which can be used in your capital stack.

Chris Bramwell, Jr. – Managing Partner, CB EMMANUEL 

black developers
Chris Bramwell

How do you navigate the challenges of securing financing for your projects, and what strategies have you found to be most effective in obtaining funding?

  1. Identify the type of housing you are developing: Understanding the type of housing you are developing can help you figure out what types of financing are available.
  2. Build strong relationships with funders, syndicators, agencies, and community stakeholders: Developing strong relationships with key players in the industry can help you gain access to financing opportunities.
  3. Pair different sources of funding to create a financially feasible project: You need to understand the different types of funding sources such as subsidies, grants, equity, and debts, and how to effectively pair them to make your project financially feasible.
  4. Consider joint ventures: Joint ventures can help you build your knowledge, experience, and balance sheet. It can also allow you to gain access to multiple financing awards.
  5. Seek guidance from experienced professionals: It is essential to seek guidance from experienced professionals who can help you navigate the complex world of financing and provide you with valuable insights.
  6. Focus on developing a solid business plan: Having a well-defined business plan that outlines your project’s goals, strategies, and financial projections can increase your chances of securing financing.

Overall, securing financing can be challenging, but by implementing these strategies, you can increase your chances of obtaining the necessary funding to bring your projects to fruition.

Can you share any specific examples of projects you’ve worked on that have had a positive impact on the surrounding community, particularly in terms of economic empowerment?

Our projects have had a positive impact on the surrounding community by empowering the local economy through our commitment to hiring Local Minority Small Businesses, subs, and employees. We prioritize using individuals and companies from the community and this has resulted in a ripple effect of economic growth.

Our projects create jobs, which in turn leads to local employees patronizing small businesses in the community. Additionally, the small businesses we work with are able to donate services or funds to local churches, non-profits, and other community organizations. Overall, our projects have had a significant impact on the economic empowerment of the communities we serve.

As a minority developer, I’ve had the opportunity to empower the communities we serve through the use of local minority small businesses, subs, and employees. For example, I was able to help a union doorman grow his moving and storage business by hiring his company for a project, which eventually led to him quitting his union job to run his business full-time and even partnering with another local entrepreneur to open a restaurant in the community.

Another example involves a small home improvement business that I hired for a project. They did such a great job that I continued to use their services on several other projects. As a token of appreciation, they helped renovate a local church’s sanctuary, transforming it into a state-of-the-art multi-purpose room used for various community events.

Lastly, a father and son duo approached me to use their title company for my projects. Despite my initial skepticism, I gave them a chance and it turned out to be a great success. They have since given back to the community by sponsoring networking events, giving out scholarships to local students, investing in other small businesses, and supporting local sports clubs for kids.

These examples show how giving opportunities to local minority entrepreneurs can help them grow their businesses, create jobs and opportunities, and ultimately give back to the community.

Overall, our projects are not just about creating buildings or infrastructure, but also about creating a sustainable ecosystem that benefits the entire community. This is a great example of how business can be a force for good, and I hope more developers and entrepreneurs.

Osei Rubie – Founder and President of National Standard Abstract

black developers
Osei Rubie

The success story of my company, National Standard Abstract, illustrates how Black developers can play a critical role in empowering Black businesses within the development ecosystem.

These developers have strategically chosen to hire and partner with businesses like ours, resulting in over $2 billion in closed deals for our title insurance firm, and the ability to hire Black employees and invest in local communities through initiatives like scholarships for youth organizations.

This cycle of economic empowerment can be seen in the support provided by National Standard Abstract to local organizations like The Rosedale Jets, HBCU Lincoln University, and elementary school students in Harlem.

Overall, Black developers can be a powerful force in creating a more equitable and thriving ecosystem for Black businesses and communities.

by Tony O. Lawson

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Published on
4 mins read

Creating Profitable Spaces: The Basics of Real Estate Development

real estate development

Real estate development is a process of improving and enhancing land or property to increase its value and make it suitable for specific use.

This can involve developing new structures, such as commercial or residential buildings, or renovating existing ones. In this article, we’ll cover the basics of real estate development and explore the opportunities available in both the commercial and residential sectors.

Commercial Development

Commercial development involves the construction or renovation of buildings for commercial use, such as office buildings, retail spaces, and hotels. The goal is to create spaces that will be in high demand by businesses and generate a profit for the developer. Opportunities in commercial real estate development include building new retail centers, renovating existing office buildings, and developing hotels in tourist areas.

Residential Development

Residential development involves the construction or renovation of homes and apartments for people to live in. The goal is to create high-quality, attractive homes and apartments that people will want to live in, and to generate a profit for the developer. Opportunities in residential real estate development include building new subdivisions, renovating existing apartment buildings, and developing luxury homes.

Key Considerations

Regardless of the type of real estate development you’re interested in, there are several key considerations to keep in mind:

  1. Market demand: It’s important to research the demand for the type of property you’re planning to develop. For example, is there a high demand for luxury homes in your area? Are there enough businesses that would be interested in leasing office space in your proposed retail center?
  2. Location: The location of your development is key to its success. Consider factors such as proximity to transportation, access to amenities, and the local economy.
  3. Financing: Real estate development can be expensive, so you’ll need to secure financing. This can include loans, investments, and partnerships.
  4. Zoning and regulations: Before starting a development project, it’s important to research local zoning laws and regulations to ensure that your project is allowed and meets all necessary requirements.
  5. Building and construction: Construction is a complex process that requires careful planning and management. Make sure you have a team of professionals, including architects, contractors, and engineers, to help ensure that your project is completed on time and within budget.

Real estate development can be a lucrative and exciting field with opportunities in both the commercial and residential sectors. However, it requires careful planning, research, and execution to ensure success. By considering market demand, location, financing, zoning and regulations, and building and construction, real estate developers can create profitable and attractive spaces that meet the needs of businesses and individuals alike.

Whether you’re interested in developing new commercial spaces or creating beautiful homes and apartments, the possibilities in real estate development are endless. With dedication, hard work, and a little bit of creativity, you can turn land into profitable assets and make a positive impact in your community.

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Published on
3 mins read

Anderson Hunt Brown: A Pioneer in Real Estate Development and Civil Rights

Anderson Hunt Brown (1880 – 1974) was an American businessman, real-estate developer, and civil rights activist.

He was born on April 23, 1880 in a three-room house in Dunbar, West Virginia. His parents, recently freed from slavery, took multiple jobs to make ends meet, enlisting Brown and his siblings’ help in their work as a farmer and laundress.

anderson hunt brown
A.H. Brown (third from left) stands with a group that includes Martin Luther King, Sr. at Charleston, West Virginia’s First Baptist Church in 1971.WEST VIRGINIA STATE ARCHIVES

Despite only having a fourth-grade education, Brown began his entrepreneurial journey at an early age. He would climb onto coal train cars, throw coal onto the tracks, and with his friends, sell it to local businesses for 50 cents.

As a teenager, Brown learned to play the trombone and traveled to Cincinnati and other Western cities with his brothers in their band, “Uncle Tom’s Cabin,” netting $10 a week (about $300 in today’s terms) for their performances.

He learned how to cut meat and opened a butcher shop and an adjoining restaurant. Several years later, he took a real estate investing course in Boston and used his earnings to buy a house at 1219 Washington Street, next to Charleston High School.

Brown’s frustration with a lack of affordable housing for Black families in Charleston inspired him to build a real estate empire, filling that need. He built commercial properties and leased office space to fellow Black entrepreneurs, creating one of the earliest Black-owned shared work spaces.

Brown also bought land around Charleston to build houses, which he rented affordably to Black community members who may have had trouble securing housing from the mostly all-white realtors at the time. By the time of his death in 1974 at the age of 94, Brown had owned and managed up to 100 properties.

In addition to developing residential and commercial properties, Brown fought for civil rights throughout his life. He was frustrated by the lack of adequate medical care for Black citizens and discrimination, which led to the opening of the Community Hospital in 1924, the city’s first state-of-the-art hospital for Black residents.

Brown used his influence and wealth to launch successful court battles that struck down segregation laws at local swimming pools, libraries, and lunch counters in his home state of West Virginia.

He instilled this passion for civil rights in his children, and his son, Willard L. Brown, became the first Black judge in West Virginia and represented the state chapter of the NAACP in a case of racial discrimination in public schools, which became part of the landmark 1954 U.S. Supreme Court case, Brown v. Board of Education of Topeka, that banned segregation in public schools.

This Black History moment is brought to you by National Standard Abstract

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Published on
3 mins read

Title Insurance: Protection for Your Biggest Investments

title insurance

When buying a home or commercial property, one of the biggest investments you will make in your lifetime, it is crucial to protect yourself from potential title problems that could arise.

Title insurance provides just that, protection for your investment. It is a type of insurance policy that safeguards your rights to the property, ensuring that you have a clear and unencumbered title to the real estate you are purchasing.

Let’s consider some examples of how title insurance can protect you in both residential and commercial real estate transactions.

Residential real estate

In the case of residential real estate, title insurance can protect you from various title issues, such as liens, undisclosed heirs, and fraud. For example, if an individual who previously owned the property had a lien placed against them, the lien could still be attached to the property even after it has been sold. Title insurance would protect you from financial loss in such a scenario, as the insurance company would be responsible for paying the lien and covering any legal fees.

Similarly, title insurance can protect you from fraud, such as when someone other than the seller claims to have an ownership interest in the property. In this case, title insurance would pay for legal fees and expenses incurred in resolving the dispute, protecting you from financial loss.

Commercial real estate

In commercial real estate, title insurance can be even more important, as the stakes are often much higher. For instance, if a title issue arises during a commercial real estate transaction, the cost of resolving it can be substantial. Title insurance can provide protection in such a scenario, as the insurance company would cover the cost of any legal fees and expenses incurred in resolving the title issue.

In conclusion, title insurance is a wise investment for anyone buying a home or commercial property. It provides peace of mind and protects you from financial loss due to title issues or defects. When purchasing real estate, it’s always better to be safe than sorry, and title insurance is one way to ensure that your investment is protected.

National Standard Abstract is a trusted and experienced provider of title insurance services, with a commitment to customer satisfaction. Contact them today to learn more about how they can help you protect your biggest investment.

EMAIL & PHONE
Info@nationalstandardabs.com
Phone: 516-302-8451
Fax: 516-355-5059

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Published on
13 mins read

East Chop Capital: Building Wealth and Community Through Luxury Vacation Rentals

east chop capital

The global vacation rental industry is expected to surge by 17% by 2030, reaching a value of over $112 billion. The demand for luxury rentals, which offer privacy, uniqueness, and luxury design, is especially on the rise among travelers.

East Chop Capital is a private equity firm that invests at the intersection of real estate, travel recovery, and the new norm of hybrid and remote work.

We caught up with founders Calvin L. Butts, Jr. and Carrington M. Carter, to gain insights into their company and its goals.

Tell us about the founding of East Chop Capital and what inspired you to start the company. 

[Carrington]: Calvin and I started investing in vacation rental homes back in 2014, when we built our first home in the Pocono Mountains of Pennsylvania, a 6-bedroom, 3-bathroom, 2800 sq ft mountain chalet, and launched the Getaway Society brand.

The idea for entering this industry came after I went on several ski trips with friends from college (shout out to Hampton University). Our group of 15+ would stay in large vacation rental homes. After the third trip, I ran the numbers and concluded that the industry had lots of potential, especially with the growth of platforms like Vrbo and Airbnb. 

We quickly expanded to Martha’s Vineyard and then to Hilton Head in order to grow our portfolio, buying about $3.5 million worth of real estate in five years. For Martha’s Vineyard, we both knew about the history as an enclave for African Americans, but after Calvin experienced the magic of the Vineyard firsthand following a Sigma Pi Phi Grand Boule’ conference in Boston, we quickly bought some property. 

As people learned of our success and inquired about how to invest alongside us, we decided to create a separate private equity firm, East Chop Capital, and launched a real estate fund focused exclusively on luxury vacation rental homes. Through this process, we discovered just how much a vehicle like East Chop Capital is needed in our community. 

For our first fund, we raised $4 million from 90 investors, 89% of whom are Black, 11% White, and 18% Women. We are on track to deliver 27% returns, net of fees, which is an outstanding performance for any fund manager, especially for a first fund. 

Our firm is named after the East Chop area in the town of Oak Bluffs on the island of Martha’s Vineyard, where we own two homes. 

Your firm has been able to raise more than double the amount of capital in less time for its second real estate fund compared to its first. What do you attribute this to? 

[Calvin]: We’ve been owners, investors, and operators in this space for almost a decade. Our track record is likely the biggest reason we’ve had faster success raising capital for our second fund compared to our first. For Fund I, it took us three years to raise $4 million.

For Fund II, we raised $9 million in about six months. We’ve sold four properties from our first fund, some at triple digit ROIs, returned over $3 million back to investors, and we’ve done so in this current economic environment. We are pleased with our results, and certainly, our investors are as well. 

In addition to our track record, we’ve spent considerable time building relationships and trust over the past nearly five years since we started East Chop Capital. We are hardworking, genuine, honest, and really dedicated to bringing people along on the journey to learn, network together, and of course, build wealth. The relationships and trust that we’ve built, coupled with our communication, transparency, and “building in public” across social media, gives people the comfort and confidence to recommend us to others. 

Unfortunately, we haven’t received an investment from institutions or family offices, which is critical in order to scale a business. We know the statistics around the lack of access to capital for minority-owned businesses and are aware of competitors who have received $100+ million in support, despite having less experience. We hope that our track record and continuing to tell our story will lead to larger investments in our firm. 

Can you discuss your focus on the intersection of real estate, the rebound in travel, and the future of hybrid work? 

[Carrington]: The thesis of our second vacation rental home fund has four key components:

  1. Real estate as a cash-generating hard asset: Real estate has a well-documented history of generating income and appreciating over time, especially luxury real estate in key locations. 
  2. The rebound in travel post-COVID: COVID is certainly not over, but we are adjusting to living with it as best we can, including traveling. There is still significant pent-up demand to travel and connect with family and friends–birthdays, weddings, new babies, promotions… lots of reasons that people want to celebrate and celebrate together. We feel that experiences will remain a priority over material things.
  3. The demand for drivable, leisure destinations: Our strategy includes building a geographically diverse portfolio of luxury vacation rental homes, within a six-hour drive of major metroplexes across the country. Drivable, leisure destinations will continue to be a viable option for families and large groups who want to enjoy a vacation and save money by driving instead of flying.
  4. The future of work in which hybrid is the new normal: You see headlines everyday about companies trying to force workers back into the office. While company policies will vary, for office workers, it appears that the new normal will be 2-4 days in the office, often with an additional week(s) of remote work offered. We are in the early innings of employees discovering, and more importantly acting on, this flexibility to live, work, and travel in ways never before possible. Vacation rentals will play an increasing role in this new life of flexibility as weekend trips turn into a full week, or a one-week vacation may turn into multiple weeks.

What is your strategy for identifying and acquiring luxury vacation rental properties in desirable locations across the US and internationally? 

[Carrington]: It’s part art, part science. First, it starts with us. Places that we have visited and enjoyed, or places that we have heard about as enjoyable vacation destinations. Aside from personal insights, often this intel comes from family, friends, investors, and others in our network. Put another way, we listen to customers of luxury vacation rental homes.

Next, we analyze travel reports and other “top destination” lists from companies like Vrbo, Airbnb, Vacasa, Evolve, AirDNA, and media outlets like Travel + Leisure, Conde’ Nast, National Geographic, Travel Noire, CNN Travel, TripAdvisor, Lonely Planet, Skift, and others. 

We also track growing metroplexes and look for the surrounding areas that people will escape to for weekend getaways and extended trips. When given the choice, travelers tend to have a strong affinity for beach, lake, mountain, and entertainment destinations. 

east chop capital
Getaway Yacht Charter’s 54-foot Azimut Flybridge named Struqqle –  Photo: Above Visuals.

What are your future plans for growth and expansion in the vacation rental market and in the private equity industry overall? 

[Calvin]: With our Getaway Society brand, powered by East Chop Capital, our goal is to own a boutique portfolio of 100-150 luxury vacation rental homes around the world. Buying, building, renting, and opportunistically selling over time to generate returns and build wealth while delighting guests around the world. 

Right now we have homes in Martha’s Vineyard, Hilton Head, Orlando, Gatlinburg, the Pocono Mountains, Virginia Beach, and Broken Bow (Oklahoma). We are building two large homes in Orlando: a 12-bedroom, 13,000 sq ft home and a 10-bedroom, 6,000 sq ft home, which we’re calling self-contained resorts.

east chop capital
3D rendering of 12-bedroom, 13,500 sq ft property in Orlando. FL – Photo credit: MJS Designers Group.

They’re being built with amenities such as a resort-style pool, bowling alley, indoor basketball court, movie theater, game room/arcade, and fitness center.

east chop capital
3D rendering of 12-bedroom, 13,500 sq ft property in Orlando. FL – Photo credit: MJS Designers Group.

We are also building four beach houses along the Texas Gulf Coast in Port Aransas, and two luxury mountain homes in Banner Elk, North Carolina, located two hours outside of Charlotte, and near Beech Mountain, Sugar Mountain, and Grandfather Mountain. 

Carrington and I also have a fascination with yachts, and we hope to build this fascination into a parallel business that gives guests a new experience on the water in places where we have homes. I grew up in Savannah around water. We went to Hampton University, which is three-quarters surrounded by water, and loved watching yachts in the harbor. Getaway Yacht Charters had a soft launch last year, with the acquisition of a 54-foot Azimut Flybridge. This business is still in its infancy, but we are excited about its future. 

On the private equity front, earlier Carrington mentioned how much a vehicle like East Chop Capital is needed in our community. It was an “Aha moment” for us. Real estate will continue to be our foundation, but under the overall objective of building wealth, we have discovered a unique way to mobilize our community of 150+ LPs [limited partners/investors] to make sizable investments ($100,000 to $1+ million) in other deals.

We are equally excited about this vertical within East Chop Capital, as it perfectly aligns with our commitment to provide the best combined financial, educational, and social returns through curated and vetted investments across various industries. 

We’d love to have your support as we continue to scale and welcome the opportunity to host you for a vacation! Please follow us @GetawaySociety and @EastChopCapital on Instagram, Facebook, and LinkedIn, and join our email lists to stay connected about our growing portfolio of luxury vacation rental homes, and other East Chop Capital investments.

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Alternative Investments 101: An Overview of Real Estate, Private Equity, and More

Alternative Investments

Alternative investments are a popular way for investors to diversify their portfolios and potentially earn higher returns. These types of investments are not the typical stocks, bonds, and cash, but rather a range of other assets that offer the potential for higher returns and lower volatility.

Real Estate

Real estate is one of the most popular alternative investments and can take many forms, including residential properties, commercial properties, and real estate investment trusts (REITs). Investing in real estate allows investors to earn income through rent and capital appreciation. Furthermore, real estate can provide diversification benefits as it doesn’t always move in sync with the stock market.

Private Equity

Private equity funds invest in private companies, typically with the goal of taking the company public or selling it to another company. These investments can provide significant returns, but they also come with a higher level of risk. Private equity is only available to accredited investors and institutional investors.

Hedge Funds

Hedge funds use a variety of investment strategies to generate returns that are not closely correlated with the overall stock market. These strategies can include short selling, leverage, and derivatives. Hedge funds are only available to accredited investors and institutional investors, and they typically have higher investment minimums and management fees than traditional mutual funds.

Commodities

Commodities are raw materials that are used in the production of goods and services. Investing in commodities can provide diversification benefits and the potential for higher returns. Commodities can be traded through futures contracts, commodity ETFs, and commodity-focused mutual funds.

Art, Collectibles

Investing in rare and valuable art, antiques, and other collectible items can be a great way to diversify a portfolio. The value of these items can appreciate over time and they can also provide enjoyment while they’re held. Investing in art, and collectibles can be difficult, as it requires knowledge and expertise to accurately value the items.

Venture Capital

Venture capital funds invest in start-ups or early-stage companies with high growth potential. These investments can provide significant returns, but they also come with a higher level of risk. Venture capital funds are typically only available to accredited investors and institutional investors.

Infrastructure

Investing in infrastructure projects such as roads, bridges, airports, and other public assets can provide a steady stream of income through tolls, fees, and rentals. Infrastructure investments also provide long-term growth potential as the economy grows and the infrastructure assets become more valuable.

Private Debt

Investing in loans made to companies or individuals, such as real estate loans or small business loans, can provide a steady stream of income through interest payments. Private debt investments can also provide diversification benefits as the returns are not closely tied to the stock market.

Alternative investments can provide diversification and the potential for higher returns. However, it’s important to note that they also come with a higher level of risk, and they may only be available to accredited investors and institutional investors. It’s also crucial to do your research and understand the investment before putting your money into it.

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Proptech 101: Understanding the Growth and Impact of Real Estate Technology

proptech

Proptech (property technology) is the use of technology to improve the efficiency and profitability of real estate transactions and operations.

From online platforms for buying and selling properties, to virtual reality tools for property tours, to data analytics for real estate market analysis, proptech companies are leveraging the latest technology to create new and innovative solutions for the industry.

The proptech industry is experiencing significant growth, as more and more companies enter the market and investors begin to recognize the potential for strong returns. The market size is estimated to reach $86.5 billion by 2032, up from $18.2 billion in 2022. A report stated that there were 2,045 PropTech companies– operating in 66 countries – at the end of the fiscal year in 2021.

This growth is driven by a number of factors, including the increasing adoption of technology in the real estate industry and the growing demand for more efficient and sustainable real estate solutions.

Proptech can be used in a variety of ways to advance the real estate industry, including in the construction and sustainability sectors. In the construction industry, proptech companies are using technology such as Building Information Modeling (BIM) and 3D printing to improve the design, construction, and maintenance of buildings. This can lead to more efficient construction processes, reduced costs, and better-performing buildings.

In the sustainability sector, proptech companies are using technology such as energy management systems, smart building controls, and sensor networks to improve the energy efficiency and environmental performance of buildings. This can lead to significant cost savings for building owners and tenants, as well as a reduction in the environmental impact of the built environment.

One specific example of proptech in action is the multifamily industry, where technology is being used to improve the leasing process, streamline property management, and enhance the overall living experience for residents.

For example, many multifamily buildings now use digital platforms for leasing and rental payments, making the process more convenient for both tenants and landlords.

Additionally, proptech companies are developing virtual reality tools for property tours, allowing prospective tenants to explore a property from the comfort of their own homes.

Another example is the industrial industry, where proptech companies are using technology to optimize the performance of warehouses and distribution centers. For example, companies are using sensor networks and data analytics to improve inventory management, reduce costs, and increase efficiency.

Lastly, proptech is also being used in the office sector, where technology is being used to improve the experience of working in an office building. For example, companies are using sensor networks and data analytics to optimize the performance of HVAC systems, improve indoor air quality, and enhance the overall comfort of the building.

Overall, this dynamic industry offers a lot of potential for growth and innovation, and it will be interesting to see how it develops in the near future.

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