Business Pitch Challenge Finalist’s Advice to Black Entrepreneurs: Don’t Bother with Venture Capitalists

According to data released by Small Business Trends, only 40% of small businesses are profitable and the start-up failure rate increases each year — what’s the problem? Money. Statistics show that every four out of five businesses fail because of cash-flow problems. More founders are relying on funds from investors in order to thrive. Competitions like the National Black MBA Association Scale-Up Pitch Challenge give entrepreneurs a chance to deliver a business pitch for cash prizes and to take their business to the next level.

C.J. Mitchell, is the co-founder of Instrumental.ly and third place winner of the 2018 NBMBAA Scale-Up Pitch Challenge. In this interview, Mitchell discusses his experience pitching to investors and has somewhat surprising advice for other black entrepreneurs seeking funding.

BLACK ENTERPRISE: Can you describe what Instrumental.ly does?

Mitchell: Instrumental.ly is a social music mobile app launched in February 2017 that allows users to create unique songs over instrumental music and shoot a video to them that they can share with their friends.

How did you find out about the scale-up pitch challenge and what motivated you to compete?

I’ve competed in the competition for 4 years in a row, and I’ve placed in the final three for three straight years (I’ve yet to win first place). I’m motivated to compete because it is the largest black-run pitch competition in the world and the cash prize would’ve helped my team scale to the next level.

 What barriers or challenges have you encountered?

It’s been a challenge getting accelerators, angel Investors and venture capitalists to believe in the problem we’re solving and that we are the right team to do it.

What advice do you have for founders who seek funds from venture capitalists?

Don’t. In my experience, it’s a waste of time. You can spend countless hours trying to convince someone that you can build a profitable business and invest in you, your product, or your team and get zero success.

But if you spend that same amount of time [catering to] your customers, trying to solve problems that they care about, and improving your product/service, you will become profitable without ever needing to talk to a venture capitalist.

Then, after you’ve proven you can run a successful business at a small scale, when you eventually meet a venture capitalist, they’ll be all over you because they will admire what you can accomplish without them.

 What have you learned during the process of pitching your ideas?

Not everyone is going to get it, and when they don’t, that means your pitch is wrong. Dumb it down so that a 5th grader can explain it to a friend. Try pitching to 10-year-olds to see if they can understand your business and the problem you’re solving. If they can’t, you’re doing it wrong.

What advice would you give to other black tech entrepreneurs entering this space?

Know your space better than anyone. You will get advice from experienced entrepreneurs, Angels, VC’s and qualified experts in business. It is incumbent upon us as entrepreneurs to discern whose advice is sound and whose advice is simply their opinion. The only way to do so is to know your stuff.

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Black Enterprise Contributors Network 

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Steph and Ayesha Curry’s Net Worth: How The Curry Family Empire Made Millions

In addition to being recognized as one of the greatest shooters in NBA history and starting the NBA’s Three-Point Revolution,” Stephen Curry is, by no surprise, one of the wealthiest basketball players in the league. The three-time NBA champ and two-time MVP signed the NBA’s first $200 million contract back in 2017, making him the second player with the highest contract value following Russell Westbrook of the Oklahoma City Thunder. The 31-year-old point guard has also inked a number of major endorsement deals throughout his career, bringing his net worth to estimated $90 million. Meanwhile, his wife, Ayesha Curry, has earned an impressive $16 million net worth from her career as a celebrity chef, television host, restaurateur, and author. Furthermore, Curry comes from a family of professional athletes who has each paved their own lanes and brands.

Here’s a breakdown on how the Curry’s made their money.

Steph Curry’s Net Worth

Steph Curry (Wikimedia)

NBA Salary:

• According to CNBC, Curry was the highest-paid player in the NBA during the 2017-18 season, earning an estimated $34 million.
• During the 2016-2017 season, he earned $12.1 million, finishing up the $44 million contract he signed with the Golden State Warriors in 2012
• He then signed a five-year deal with the Warriors that guaranteed $201 million.
• It is estimated that his salary will gradually increase to a whopping $45.8 million in 2021-22.

Endorsements:

Curry’s generates an estimated $42 million in off-court income from his endorsement partners, which include Under Armour, JPMorgan Chase, Vivo, Nissan/Infiniti, and Brita among others.

• According to Business Insider, an analyst at Morgan Stanley estimated that Curry’s shoe deal with Under Armour could be worth more than $14 billion. In 2015, Curry and the sneaker company extended their deal through 2024. Although details of the contract were not disclosed, Sports Illustrated reported that it “includes an equity stake.”
• In January 2019, Curry entered a partnership with the Japanese e-commerce company Rakuten, which pays him $20 million a year to have its name etched on the Warriors’ jersey, reports CNBC.
• In 2018, Curry formed a production company called Unanimous Media, which signed a multi-year development and production deal with Sony Pictures Entertainment. Variety reported that the agreement was “the biggest media deal of any athlete to date.”
• In October 2018, Curry announced a partnership with Palm, a mobile companion device that pairs with a primary smartphone. Curry operates as an investor and leading brand ambassador for the San Francisco-based startup.
• In April 2017, the point guard partnered with Vivo, a smartphone brand in China.
• In June 2017, Curry became a global brand ambassador for Infiniti.
• In January 2016, he signed a multi-year endorsement deal with Chase.
• In 2016, Curry became the face of PressPlay.
• In December 2015, the NBA All-Star signed a three-year endorsement deal with Brita.
• From 2015 to 2017, he worked as a brand ambassador for Degree Deodorant.

Investments and Other Business Ventures:

• In December 2018, it was announced that Curry was among the investors that participated in the $21.2 million Series A funding round of Toronto-based travel startup SnapTravel.
• In June 2018, Curry launched SC30, a company that helps him manage his investments and business ventures.
• In 2015, he and his former Davidson teammate Bryant Barr, co-founded Slyceo, which aims to become an automated marketing service to help brands publish content and reach their intended targeted audiences.
• Curry and his partners, Jeron Smith and Erick Peyton, created Unanimous Media, a production company that develops and produces family film and television projects, like Breakthrough.
• Curry is also an investor in Active Faith, a Christian sports apparel brand.

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Ayesha Curry’s net worth

(Image: Instagram/AyeshaCurry)

Ayesha Curry is a Canadian-American chef, author, model, actress, and television personality who has a net worth estimated at $16 million.

• In February, she opened another outpost of her barbecue spot, International Smoke, in Miami. The restaurant, which is a collaboration between Curry and Chef Michael Mina, has sister locations in Houston and San Francisco.
• Curry became a CoverGirl spokesmodel in 2017.
• In 2017, she partnered with PM Studios to produce her very own mobile cooking game app.
• In 2016, she authored the  New York Times best-selling cookbook The Seasoned Life.
• In 2016, Curry began hosting the TV series Ayesha’s Home Kitchen on the Food Network.
• Her company Little Lights of Mine sells its own brand of extra virgin olive oil.
• As a former actress, she starred on the television series Whittaker Bay in 2008 and appeared in the films Dan’s Detour of Life and Love for Sale.
• She has also appeared on the TV shows like Hannah Montana, The Real, The Chew, Rachael Ray, and The Great American Baking Show.

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Seth Curry’s Net Worth

Seth Curry of the Portland Trail Blazers (Wikimedia)

Steph Curry’s younger brother, Seth, also plays in the NBA as a shooting and point guard for the Portland Trailblazers. The former Duke University player has a reported net worth of $3 million.

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Sydel Curry Lee

Sydel Curry Lee (Instagram.com/sydelcurrylee)

Steph Curry’s little sister, Sydel, is a former Division I athlete who retired from volleyball in 2017 following an injury. After graduating from Elon University, she landed a full-time job as a service concierge at Tesla. The 24-year-old teamed up with Neiman Marcus last year to launch her own brand, “A Curry Girl.” The social media influencer and wife also manages a lifestyle website and YouTube channel. Last year, she and her sister-in-law, Ayesha Curry, launched a wine company, Domaine Curry. She has a reported net worth of $300,000.

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Dell Curry’s Net Worth

L-to-R: Seth Curry, Dell Curry, and Steph Curry (Instagram.com/stephencurry30)

Steph’s father, Dell Curry, is a retired basketball player who was drafted by the Utah Jazz in 1986. After one season with the Jazz, he moved to the Cleveland Cavaliers, where he earned $250,000 in 1987, according to The Richest. He went on to play for the Charlotte Hornets for 10 seasons, earning $285,000 in his first season and $3.6 million in his last. Curry transferred to the Milwaukee Bucks in 1999 and spent the last three seasons of his NBA career playing for the Toronto Raptors. He reportedly earned $2.1 million in his last season.

Today, Dell Curry is reportedly worth $16.6 million. He is married to former Virginia Tech women’s volleyball player Sonya Curry. Together, they have three children and four grandchildren.

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Reports: Is Bey $300 Million Richer from Uber IPO?

Last week, car-sharing service Uber went public and Beyonce is rumored to have scored big money as a result.

People magazine reports that Queen Bey received $6 million in restricted stock units (RSUs) from Uber co-founder Travis Kalanick to perform at an event.

With the IPO, speculations abound that she made $300 million from her shares.

MarketWatch calls Uber’s IPO, “the biggest in years” and that the company “raised more than $8 billion”; the IPO still fell short of an expected valuation of $100 billion.

Beyoncé Giselle Knowles-Carter has proven time and time again that there is nothing that she cannot do. At 37, the multifaceted entertainer has earned 23 Grammy wins, the 2019 Vanguard Award at the GLAAD Media Awards with her husband Sean “Jay-Z” Carter, and her second Entertainer of the Year Award at this year’s NAACP Image Awards. Yet, in spite of her mounds of success and accolades, the mother of three doesn’t seem to be slowing down anytime soon.

In 2017, Black Enterprise reported that Bey and Jay-Z had an estimated combined net worth of $1 billion. With the Uber IPO and her deal with Netflix worth $60 million, according to Variety, the power couple may be destined to exceed $1 billion net worth in the very near future.

—Additional reporting by Selena Hill

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How Choice Hotels Is Putting Its Weight Behind Black Women Ownership

A new survey by Mandala Research shows that African American travelers are a significant travel group who contributed about $63 billion to the U.S. travel and tourism economy in 2018. Contrast that with the National Association of Black Hotel Owners, Operators and Developers (NABHOOD), which estimates that less than 1% of hotels are owned by black women. The disparity is eye-opening to say the least. Choice Hotels International is tackling this disparity head-on with its one-of-a-kind emerging markets franchise development team that began in 2003. The effort has led to more black women ownership in the hospitality industry.

The Bainum family, whose patriarch Stewart Bainum opened his first hotel in 1957, still owns 40% of the company and has always recognized the importance of diversity. A goal was put forth to executives to increase hotel ownership for African Americans, Hispanics, Native Americans, and veterans.

Lester Adams – Director, Choice Hotels Franchise

Lester Adams is the director of the emerging markets franchise development program for Choice Hotels. “We want the dream of hotel ownership to be within everyone’s reach—which is why we’ve dedicated full-time resources and incentive dollars to this program. Our sole mission is to search for, identify, educate, and counsel potential candidates to determine if Choice would be a good fit, and usher them through the application and license process,” says Adams.

For most people, the idea of owning and running a hotel is overwhelming. The most glaring barrier to entry is typically the level of investment.

“We’re proud to have a brand at every price point—not just for every guest, but for every owner as well. Yes, the financial barrier can be big, as an upscale hotel can require $20 to $60 million in investment dollars. However, Choice offers more moderate investment opportunities, making hotel franchising more accessible to those just starting out,” Adams says.

“If you’re purchasing an existing property to convert into a Choice hotel, securing the 30% down can be much more achievable. And with the Emerging Markets Program, we offer incentive dollars, as long as the location is adding new rooms to the Choice network, and the ownership is at least 51% from one of the identified groups underrepresented in our owner base,” he added.

Tamara Lang-Allen, Ph.D. – Comfort Inn & Suites Franchise Owner St. Thomas, U.S. Virgin Islands

Tamara Lang-Allen, Ph.D., is managing director of The Mangrove Eco Boutique Hotel Properties L.L.C. and director of Hospitality & Tourism Management at the School of Business at the University of the Virgin Islands. She is one of the six African American women recently awarded franchise licenses by Choice Hotels’ emerging markets franchise development team.

Her Comfort Inn & Suites in St. Thomas, U.S. Virgin Islands, will be a 72-room hotel, in the eastern quadrant of the island, and is scheduled to open late next year.

“Being in the hospitality industry for many years and being from St. Thomas, I knew what the island needed, and what Choice was looking for. After seeing a Choice Hotels presentation at a convention in 2014, I learned more about the brand and its values and decided it was something that was desperately needed in St. Thomas. It is a really great fit,” says Lang-Allen.

In addition to providing accommodations for tourists, this hotel will also serve as a training hotel to public and private entities as well as schools and universities throughout the Caribbean, mainland, and abroad.

“This will be my first time owning a hotel, but it’s been my passion for close to 35 years. I’ve worked in hospitality on every level. With teaching it at the University, I recognized that it’s important to offer people the opportunity to earn licenses and certifications without having to go to college. Not everyone can afford that. So, I wanted my hotel to provide that opportunity, and Choice is enabling us to do that,” says Lang-Allen.

Adams expressed the importance of educating prospective owners that hotel ownership is absolutely attainable. “There are approximately 60,000 franchise owned hotels in the U.S. Above 60% of those are owned by Asian Americans, primarily those of Indian descent. This shows us that you don’t have to come from wealth to participate in ownership. If you work hard, stick together (saving and pooling money), and target a particular industry, it can be done.”

A good candidate for ownership of a Choice hotel should have prior business or franchise experience and understand key points of the relationship between the franchisor and the owner. Hospitality experience is a plus, but not a requirement. “Many owners choose to bring in a management company to run the day-to-day operations,” explains Adams.

For owners that choose to be hands-on, the role can span from working closely with the general manager to ensure operations are running smoothly or spending time in the business community at City Hall or the Chamber of Commerce to drive business to the area and to be a vital part of the community.

Last year, Choice closed 19 emerging market deals, 11 of those were with African American candidates. If you would like to learn more about Choice Hotels’ financial incentives for aspiring African American hoteliers, visit the website or email Lester Adams at Lester.Adams@choicehotels.com

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Black Enterprise Contributors Network 

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Google and Legendary Dancer Bill T. Jones Create Interactive Dance Experience for Anyone

Bill T. Jones and Google Creative Lab have collaborated to launch Body, Movement, Language, a collection of experiments that have resulted from a two-way residency between the writer, dancer director, and Tony Award winner.

Inspired by Jones’ long history of intertwining live, improvised speech and dance, these open-source experiments use AI to invite people to explore the creative possibilities of their bodies and make new connections with Jones’ iconic works right at home, using nothing more than a laptop and webcam.

When asked why Jones partnered with Google he said, “The idea of machine learning intrigues me. The theme of our company’s Live Ideas Fest this year is artificial intelligence. AI is supposed to take us into the next century and important things are supposed to be happening with this technology, so I wanted to see if we could use it to stir real human emotion. Maybe it’s ego, but I want to be the one to know how to use PoseNet to make somebody cry. How do you get the technology to be weighted with meaning and import?”

The series of four experiments include:

Manifesto

An intimate message composed in digital space

Bill T. Jones is famous for improvising with speech and movement in performance– deftly weaving together deeply personal stories, and commentaries on culture. Manifesto allows the user to create a trail of words that respond to their movements in real-time. If you exit your camera’s frame of vision, the trail of words will suspend on screen. With this process, you can compose a statement, a poem, or letter to someone you know. Jones has his dancers use this experiment to tell stories about their lives or write a letter to someone.

The Game

A kinetic conversation

This concept was discovered accidentally when Jones’ dancers began playing with a glitch in PoseNet that allowed them to “steal” the shape rendered on screen from one another by modulating their poses. Inspired by their experimentation, Jones asked them to think of three words with strong relationships to each other that would imbue this new game with meaning and weight. This game begins with his chosen triad: “lover, stranger, friend,” but you are encouraged to enter your own collection of words to give The Game more significance to you.

Hold That Thought

A soliloquy with digital props

Inspired by Jones’ work with language and movement, this experiment started as a visual pun on the significance of speech. As the words you say appear on screen, they become part of your body and are affected by your movements. While developing this experiment, Jones prompted his dancers to speak and feel the physicality of the words in the stories they tell. Hold That Thought invites you to speak freely while contending with your words as if they were physical objects that you can enlarge, shrink, or tilt with your movements.

Naming Things: Approaching 21

A new way to experience one of the most iconic pieces in the history of American dance

Debuting in 1983, 21 has become one of Bill T. Jones’ signature works. Jones cycles through 21 poses with spoken titles and improvised associations in a commentary on the body and its symbolism in culture. This dynamic performance is rooted in the time and space in which it is delivered. It is never executed the same way twice, making it impossible to archive. This experience, Naming Things: Approaching 21, is a complement to the live performance. This experience pays homage to the structure of 21 and allows you to experience each section uniquely. First, you watch him perform each pose. Second, you participate in the piece and must match his pose to advance the video and learn each poses’ title–a function powered by Google PoseNet. Last, you hear Jones’ reflections on the piece.

This project is an example of an innovative, socially responsible application of AI and even more specifically, the use of AI to explore and better understand the black and LGBTQ+ experience through art and dance.

 

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10 Black Documentaries Not to Miss in 2019

There are several cutting-edge and groundbreaking documentaries that will likely be released this year focusing on black leaders, controversial figures, and issues of importance to the black community. Take a look at the video to get a sneak peek of 10 black documentaries you will want to keep on your radar when they debut in the upcoming months.

 

 

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Vivica A. Fox, Vanessa Simmons, and Mahisha Dellinger Define What It Means to Be A Boss

Over 250 business women of color came together to learn, network, and level up at the 2nd annual Essence of a Boss Conference earlier this month. Held in White Plains, New York, the three-day women’s business conference was packed with panel discussions, inspiring workshops, cocktail mixers, brunches, and an awards dinner. Attendees also heard from a variety of successful entrepreneurs, business leaders, and celebrity powerhouses, including actress Vivica A. Fox, actress and entrepreneur Vanessa Simmons, CURLS founder and OWN TV host Mahisha Dellinger, and WNBA Hall of Famer Teresa Weatherspoon.

The weekend conference, which was sponsored in part by BLACK ENTERPRISE, was designed for and by black women to improve their personal and professional lives. Former Essence magazine senior editor and author Charreah K. Jackson opened day two of the summit by sharing a testimonial about her journey into becoming her own boss which included a few run-ins with media titan Oprah Winfrey. In another session, Rosezena J. Pierce, Esq., a trademark attorney known as “The Biz Lawyer,” explained the difference between the various types of intellectual properties and the importance of getting legal protection for small businesses.

“In order to secure the bag, you need to also make sure that you’re securing your brand so that no one else can come along and take it from you,” she told BE. Other panel topics focused on health and wellness, beauty, technology, money management, entrepreneurship, faith, and media.

(Mahisha Dellinger, founder of CURLS, and Nethania Abraham, founder of Sovereignty Beauty, during the “Boss Tank” session)

One of the highlights of the conference was a mini-pitch competition inspired by ABC’s Shark Tank called “Boss Tank,” which was hosted by Dellinger. During the session, several entrepreneurs pitched their business ideas and received her advice on how to grow and scale. “What does it take to be a boss? Grit, determination, perseverance, and hard work,” she told BE. “If you have those things, you can make it, too.”

Another highlight was the Essence of a Boss Awards Dinner, where Fox was honored with the “Boss Woman of the Year Award.” She also opened up about her career and love life during a fireside chat, admitting that she’s still in love with her ex-boyfriend Curtis “50 Cent” Jackson.

“He was the love of my life,” she confessed. “He wanted me to marry him,” she continued getting emotional. “I loved him and I always will. He’s crazy as hell now.” Later that night, she told BE that she defines a woman boss as “being in control” and diligent about staying on her pathway of success.

(Rolanda Watts and Vanessa Simmons at the 2nd Annual Essence of A Boss Conference)

Simmons shared the stage with veteran TV host Rolanda Watts in a fireside chat about her career. “The true definition of a boss is a woman who believes in herself and unapologetically and fearlessly goes after her visions and goals and makes it happen,” she told BE.

The founder of Essence of a Boss, Jody Prendergast, also received a proclamation from The National Council of Women of the United States, marking May 4 officially as Essence Of A Boss Day in the State of New York. The night concluded with a special live performance by artist and star of Bravo’s “First Family of Hip Hop” LeA Robinson.

Following the conference, Pierce said she loved hearing from a wide range of women from different professions and walks of life. “A variety of women were highlighted at this event and were able to share their experiences [and] their expertise,” she said. “There was also a little teaching, a little preaching – it was just a little mix of everything we need collectively to truly be strong boss women.”

L-to-R: Tracey Baker-Simmons, Kym Swain, Nikka McClain, and Black Enterprise Digital Editor Selena Hill

Camille McDonald, a former contestant on America’s Next Top Model and the current co-owner of a luxury homecare company, said she walked away feeling inspired and rejuvenated. “Some of the highlights that I’ve gained here at Essence of a Boss are the strength and the unity of women of color. Together, we can accomplish anything. It’s so important for sisters to help each other reach that next level of success.”

The event was sponsored by a host of companies, including Blue Nun, Sparkling Ice, Mikey Likes It Ice Cream, Skin & Body Klinic, Sparkling Ice, among others.

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Black Banks Partner with JPMorgan Chase in U.S. Treasury Protégé Program

Two black banks—The Harbor Bank of Maryland and Liberty Bank and Trust Co.—have been chosen to work with JPMorgan Chase & Co. as part of The Financial Agent Mentor Protégé Program sponsored by the U.S. Department of the Treasury.

JPMorgan will mentor both The Harbor Bank of Maryland and Liberty Bank. The alliances will allow The Harbor Bank of Maryland and Liberty Bank to deepen existing relationships they have with JPMorgan, the nation’s largest bank, and potentially help them generate new business.

The mentor program brings together large banks that now serve as financial agents to the Treasury (as mentors) and small, highly capable banks (as protégés) to expand the options the Treasury has to execute programs. Mentors foster learning and development to help prepare the new generation of financial institutions to succeed in responding to the dynamic and diverse requirements needed when working with Treasury, according to a news release.

“The U.S. Department of the Treasury is committed to promoting inclusion in all of its business activities. The Financial Agent Mentor Protégé Program is an important part of this effort. We applaud industry leaders for sharing Treasury’s commitment by working to enhance the capacity and expertise of these historic financial institutions that have provided banking services in their respective communities for generations,” Dr. Lorraine Cole, director, Office of Minority and Women Inclusion, U.S. Department of the Treasury, stated in a news release.

[RELATED: ONEUNITED BANK INTRODUCES ‘QUEEN CARD’]

JPMorgan Chase has a close working relationship with both Harbor Bank of Maryland and Liberty Bank and Trust, two regional black-owned banks, as part of the Entrepreneurs of Color Fund in Detroit and the Greater Washington, D.C. region. Both Liberty Bank and the Harbor Bank of Maryland are on the  BE Banks list of the nation’s largest black-owned banks. 

Alden J. McDonald Jr., president and CEO of Liberty Bank and Trust Co., says the partnership will allow his bank to do business in new markets on a competitive basis.

Specifically, he says the partnership with JPMorgan Chase will allow the New Orleans-based bank to offer more services to bigger institutions. McDonald added that Liberty will now be able to bid on larger contracts with various government agencies, something it could not do before.

Another benefit of the protégé program is Liberty will gain access to new proprietary software, boosting its capacity to generate fresh business with larger clients.

“The partnership could help Liberty boost fee income and total assets,” McDonald says.

The Baltimore-based Harbor Bank of Maryland also expects to benefit. “I am delighted The Harbor Bank of Maryland was selected to participate in [the] Treasury’s innovative economic stimulus program, stated Joseph Haskins Jr., chairman, president, and CEO at The Harbor Bank of Maryland. “The goals align perfectly with Harbor Bank’s founding mission to provide financial products and services to the underserved. Our community bank size limits the extent to which we can do that.”

He added, “The partnership with Chase, a multinational conglomerate, allows us leverage to invest more in the businesses and entrepreneurs who are creating opportunities, driving our economy. We could not be more excited and look forward to a mutually beneficial partnership.”

Eva Robinson, head of Treasury Services Public Sector Sales for North America, J.P. Morgan, stated, “We’re excited about the opportunity to help black-owned community banks expand their capabilities through this program.” This initiative is consistent with our efforts to help consumers and entrepreneurs of color get better access to credit and working capital, and ultimately ignite wealth creation in low- and middle-income communities.”

Additionally, JPMorgan Chase announced Advancing Black Pathways, earlier this year, furthering the firm’s commitment to expanding economic opportunity for black Americans and creating new opportunities in the areas of education, careers and wealth.

 

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Four Black Single Mothers Blessed With Pre-Owned Cars At a Maryland Church [VIDEO]

Beyond making history as the first African American Lamborghini and McLaren dealer in the United States, Thomas Moorehead, President and CEO of Sterling Motorcars, is also establishing a legacy of giving back to the communities he serves. Recently, the Sterling Motor Cars Community C.A.R.E program surprised four single-parent moms with cars during church services held on Sunday, April 28, at the First Baptist Church of Glenarden in Upper Marlboro, Maryland.

Sterling Motorcars is a longtime member of the BE 100s, Black Enterprise’s listing of the largest black-owned businesses, and was named Auto Dealer of the Year back in 2007.

According to a statement, each of the unsuspecting mothers was gifted with a vehicle at the 8 a.m., 10 a.m., noon, and 6:30 p.m. services, making them the first recipients of the Sterling Motorcars’ Community C.A.R.E. Program. The community-based initiative, which stands for “commitment, assurance, reliability, and excellence,” targets school, local organizations, and faith-based organizations.

Photo credit: First Baptist Church of Glenarden

Pastor K. Jenkins Sr. of First Baptist Church of Glenarden said the moms were selected based on their economic hardships and faithfulness to the church. “We have identified four single parents based on their financial needs, having young children, and being active members of the First Baptist Church of Glenarden,” he said in the statement. “Our recipients are faithfully involved in our ministries and are single parents who recognize that their lives are bigger than themselves. They give generously by serving outside of themselves by helping other people.”

(Photo credit: First Baptist Church of Glenarden)

Although they were not named in the statement, each of the parents was described as follows:

• Parent One: Husband passed leaving her to raise eight children, ages 8-15

• Parent Two: Involved in an automobile accident with uninsured motorists where her car was totaled. This parent volunteers with FBCG’s Special Needs Ministry and has a 15-year-old child.

• Parent Three: Uses public transportation and has two children ages 7 and 9. Despite various hardships in her life, she continues to serve in the Kids World Ministry and the Children Bible Study Ministry for the last five years.

• Parent Four: Volunteers their time working with the dance ministry youth ages 13-18.  They have a 9-year-old son, who is also actively involved in the church.

(Photo credit: First Baptist Church of Glenarden)

Watch Marilyn Lacy, a widowed mother of eight, react after being surprised with a vehicle in the video below.

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5 Life Insurance Wealth-Building Strategies for Black Families

Unfortunately, most people think of death when they think about life insurance. And few want to think or talk about dying. As you may know, designated beneficiaries receive a financial benefit at the time of a person’s death. However, there are several benefits of life insurance to leverage while alive. Here is a look at a few life insurance wealth-building strategies that black families can use.

First, while there are numerous types of life insurance options available, they fall into the categories of term insurance, permanent insurance, or a hybrid:

Term Life Insurance

Term life insurance is the most economical because it provides coverage for a temporary time, like 10 years, 15 years, etc. Unfortunately, less than 1% of term insurance policies pay out. This is because people usually outlive the time frame of the plan.

Permanent Life Insurance

Permanent insurance provides coverage for a person’s entire life. Permanent life insurance policies build cash value. Cash value is a portion of the premiums paid that accumulates in a savings account. Over time, the accumulated cash earns interest and, in cases of mutual insurance companies (owned by its policyholders), dividends.

Universal Life Insurance

Universal life is a hybrid of term and permanent life insurance plans. Universal life or UL is a term life insurance plan that can protect the insured for their entire life. If this type of policy is not designed correctly, it can become a big waste of money. If the plan is designed and managed properly, it can be an economical way to have permanent life insurance coverage.

5  Life Insurance Wealth-Building Strategies

Financial experts in the insurance industry share a few wealth building strategies of life insurance to enjoy while alive, as well as for legacy wealth.

Build a Bank of You

Permanent insurance policies have a forced savings mechanism. This accumulation of cash, called Cash Value, is like building your own bank and can be used for numerous things.

“Instead of borrowing money from a bank,” explains Kerry Peabody, CLU, CLTC of Clark Insurance, “the policy owner can take a loan against the cash value for numerous things, like supplemental retirement income, college funding, business startup, etc.”

Benefit While You’re Alive

The most valuable asset a person has is their health and ability to earn money to save, spend, invest and give. However, if diagnosed with a terminal illness, medical expenses can wipe out a person’s savings or inhibit their ability to build wealth while they are alive.

“Some life insurance providers offer an accelerated death benefit rider, which is a provision that allows the policyowner to receive a portion of the death benefit if they were to become terminally ill,” says Yogesh Shetty of Live Well & Earn Insurance. “If diagnosed with a terminal illness, you could cash out a portion of your life insurance to pay off medical expenses.”

[RELATED: Multiple Ways Life Insurance Can Build Wealth for Blacks and Community]

Forced Future Savings

If funds are tight, but life insurance coverage is needed and a seamless way to save money is desired, this type of term life insurance can be an excellent tool for wealth building.

“Return of Premium Term Life Insurance Policy is a great way to build wealth,” says Sa El, co-founder of Simply Insurance. “If the person outlives the term, the Return of Premium Life Insurance Policy will return all the premiums paid into the policy. It is like having protection with cash back.”

Create Trust Babies

Whether people have substantial or modest incomes, life insurance is a way to create trust babies and legacy wealth. A trust is a fund that consists of assets held by a designated trustee for the beneficiaries. The trust owner dictates how the assets will be disbursed to the beneficiary, from the grave, through the trustee.

“Once the Trust is established, the trust owner can designate the beneficiary, the disbursement terms, and the trustee.” El further explains, “A person gets 30 times their annual earned income of life insurance. For example, $50,000 income per year would equal to a $1.5 million term life insurance policy. They then establish the trust fund as the beneficiary of the life insurance policy and then designates the beneficiary of the trust. This strategy can change the financial landscape of a family and put them in a financially stable position.”

Use Cash Value as Collateral

Whether there is a need for capital for a business startup or business renovations, many minority business owners are having trouble getting approved for small business loans.

“Permanent life insurance policy cash values can be used as collateral for bank loans,” shares Adam Doran, a financial advisor at Prevail Innovative Wealth Strategies. “Even if the bank does not offer, ask if this option can be considered.”

Life insurance is not only a financial benefit to the family upon death; it can be a tool to enhance an investment portfolio and financial plan. Consult with a registered financial adviser or licensed insurance agent for tax and eligibility requirements.

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Black Enterprise Contributors Network 

The post 5 Life Insurance Wealth-Building Strategies for Black Families appeared first on Black Enterprise.

College Educator On A Mission To Inspire People of Color to Earn Ph.D.s

BE Modern Man: Daniel Jean

College educator, 44, Founder of Wordstravel LLC and PhinisheD/FinishEdD #WhoGotNext

Twitter: @Wordstravel; Instagram: @Wordstravel

I am the founder of PhinishEdD/FinishEdD #WhoGotNext and Wordstravel L.L.C. I have presented over 600 seminars; sharing best practices for marginalized populations through webinars, keynotes, workshops and trainings for organizations such as the National Academic Advising Association (NACADA), National Association of Student Personnel Administrators (NASPA), the National Conference on Race and Ethnicity in American Higher Education (NCORE), and the Southern Regional Education Board Institute on Teaching and Mentoring (SREB).

I also serve as the executive director of the Educational Opportunity Fund Program and Academic Development at Montclair State University in New Jersey. I have published two books and taught college courses in transformative leadership and hip-hop culture. I am the founder of three statewide college access/awareness conferences, which bring over 1,000 high school scholars to campus annually; the Richard Wilson/Jason James Mentorship Program for high school/college scholars and young professionals; a professional consortium titled the Male Education Network (MEN); and PhinisheD/FinishEdD #WhoGotNext for 13,000 current/future doctors.

In addition to my career as a college educator, I am a poet and playwright. My most recent play “Til Death Do Us Part?” ran Off-Off-Broadway in NYC to two sold-out runs.

WHAT ARE YOU MOST PROUD OF IN LIFE?

I am most proud of my role in my community to help others as a college educator. I have a goal to mentor 1,000 future doctors and deliver 1,000 seminars before I retire.

HOW HAVE YOU TURNED STRUGGLE INTO SUCCESS?

From EBT to the EdD. From welfare to the White House. I have overcome homelessness, instability, drug-addicted family, and anti-intellectualism to reach all of my personal and professional dreams.

In the immortal words of the Canadian actor turned rapper [Drake], I started from the bottom and I am now here. I am the youngest child of Haitian immigrants who arrived on these shores in search of the American dream and running water. I am the teenage boy who lost his father and was raised by his God-fearing mother in the heart of Newark, New Jersey. I am the young man who earned a 1.9 high school GPA and, by the grace of God, went on to earn three degrees and become an educator.

WHO WAS YOUR GREATEST ROLE MODEL?

My father. In the early 1970s, he left the oppressive government of Haiti to raise five college graduates. He passed when I was 14, but he taught me grit, resilience, and the discipline to achieve all my aspirations, including as a college educator.

WHAT DO YOU LIKE MOST ABOUT BEING A BLACK MAN?

As a Haitian-American, I value my heritage, my physical attributes and the global culture we create. I love every aspect of my blackness and how I am able to define it for the world.

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5 Time-Honored Tips on Providing Superior Customer Service

You probably have had a negative experience with customer service at some point. Negative customer service experiences leave you with the wrong impression of the company and the customer service representative. Providing superior customer service is a way to keep your customers happy, ensuring they return to your business in the future. Keep the following tips in mind to give your customers an experience they will remember positively.

Use Active Listening

While listening to your customers goes a long way, using active listening makes your customers feel like you hear what they are saying. Repeat, paraphrase, or reflect on what your customers are saying to make sure that you understand.

For example, you can say, “I hear you are very frustrated because your order was not correct.” This lets the customer know you understand his or her problem and you are not giving canned answers. Make sure your body language conveys attention, and whenever possible, stop what you are doing to give your customer full attention.

Show Customer Respect

Address your customers by “ma’am,” “sir,” or their last names until they permit you to address them by another name. Be polite, use “please” and “thank you” often, and speak to the customer using professional language instead of slang. If the customer is angry, never raise your voice, use sarcasm, or swear at the customer. Do not argue, and keep your behavior professional at all times.

Be Proactive

Much of what you do with a customer is reactive; you respond to the customer’s requests and needs. However, a superior customer service agent is also proactive. Identify those things that the customer may need, or solve problems before they happen.

For example, if you are looking at a customer’s account and you noticed he ordered 10,000 cases of tongue depressors, it is proactive to verify if he wanted one example of 10,000 tongue depressors instead. An active customer service agent can fix problems before the customer gets angry.

Keep a Positive Attitude

Keep a positive attitude when dealing with customers. They do pick up on your mood, and if you are not positive, they sometimes feel that you do not want to help. Whether you are on the phone or face-to-face, smile, even over the phone, your smile will shine through and let your customer know you care.

Follow Through with Customers

If you say you are going to do something for a customer, follow through. Your customers need to know that you are reliable and dependable. This is especially true when an issue cannot be resolved right away. Return all phone calls and emails promptly, and check with the customer to make sure the problem has been satisfactorily resolved. If for any reason you are not able to carry out something you said, let the customer know as soon as possible, and be honest.

Give your customers superior customer service by repeating, reflecting, and paraphrasing what is said to convey your understanding. Show customers respect, even when he or she is not giving you respect in return. Be proactive by anticipating customer problems and needs, so that they can be fixed before the issues arise. Keep a positive attitude, and smile even if you are communicating by phone.

Finally, follow through on all customer contact, ensuring that the complaint is resolved appropriately. These tips are critical to remember when you need to provide customer service.

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Kapor Capital Impact Report Challenges other VCs to Invest in ‘Gap-Closing’ Companies

Investing in “impact” companies is good for business according to Kapor Capital’s recent report. Since 2011, Kapor Capital has invested exclusively in impact companies and, eight years in, the fund ranks in the top quartile of all funds of comparable size, the report says.

What exactly are impact companies? The firm defines impact as “companies committed to closing gaps of access, opportunity, and outcomes for low-income communities and communities of color in the United States.”

According to reports, a lot of VCs continue to steer clear of gap-closing impact companies, incorrectly believing that investing in companies that do good might come at the expense of financial returns. Today’s results strongly refute this hypothesis.

The results were based on the following two standard measurements of portfolio performance:

• Internal Rate of Return (IRR) — 29.02
• The Total Value to Paid In (TVPI) Multiple– (3.0)

By both measures, Kapor Capital’s Impact Portfolio ranks in the top quartile of venture funds of comparable size. Specifically, at 29.02%, Kapor Capital’s Impact Fund IRR outperforms the 75th percentile benchmarks for both Pitchbook (25.96%) and Cambridge (26.50%) for this period. Additionally, it is important to note that these figures do not include major investments, such as Uber and Twilio, where Kapor Capital investment was initiated before 2011. So what does it all mean? Investing in impact-driven companies also leads to a significant Return on Investment.

“We’ve always believed that all companies have some sort of impact in the world—some positive, some negative,” states Mitch Kapor, partner at Kapor Capital. “As investors, it’s our responsibility to nurture only those innovations that make our world more fair, just and equitable. After eight years of impact-only investing, we’re proud to share our results and prove our hypothesis.”

Additionally, the report details the specific impacts that their companies are making in the world by closing gaps in education inequality, helping families access healthy foods, disrupting predatory lenders and so much more.

“At Kapor Capital, we want to disrupt the very way that businesses are evaluated,” said Dr. Freada Kapor Klein, partner at Kapor Capital. “‘Impact’ investing shouldn’t be the outlier; greed-first investing should be the category getting scrutinized. VC 2.0 is the vision of what VCs can be and this excites us tremendously.”

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Black Grout Medic Franchise Owner Finds Success in Two States

Starting any business, including a franchise, is a challenge. But try starting a business, growing it to generate $400,000 in sales annually, selling it, and then starting that same business in another part of the country. The word challenge doesn’t even begin to describe that scenario, but Alvin Stevenson has done it and has some incredible insights to share. Stevenson purchased his Grout Medic franchise in Baltimore in 2003 after a spending 19 years in retail management. Grout Medic is a leading grout and tile restoration franchise. 

The thought of going into business for himself was more than daunting but something Stevenson knew he had been preparing for his whole life. He looked at multiple franchises but eventually settled on The Grout Medic because as his wife said, “this looks like something you will stick with.”

 “I knew I wanted to do a franchise because the failure rate is a lot lower than self-startups and it would be a quicker turnaround on my investment,” said Stevenson.

Profitable from Day One

After opening, Stevenson hired an employee but on days where there wasn’t enough work, he did the work himself—and managed expenses and payroll tightly.

 “I did make some mistakes,” he recalls. ” I quickly realized I was paying too much for print advertising. Essentially, I was working for the advertising, as opposed to the advertising working for me.” 

He redistributed his ad investment so that it reached more households, with only a slight increase in cost, and this increased his sales significantly. By leveraging his advertising he was able to hire another employee and still put extra money into his own pocket. In business, every dollar saved is a dollar earned.

“You can’t simply accept the pricing that a vendor gives you upfront,” he advises. “Dig deeper and learn more about what you’re buying, and you can probably get more for your money.”

Selling and Starting Over

Stevenson owned his Grout Medic franchise in Baltimore for eight years. He sold it and moved to the Chicago area. Starting a new Grout Medic seemed natural as he had done it successfully before. When he arrived in Chicago, he learned that the three previous Grout Medic owners were unsuccessful in the same location.

With money coming in monthly from the sale of his Baltimore location, he used online advertising to grow his business organically by building his reputation online and getting referrals from existing customers. He then hired and trained new employees to do the work while he focused on sales and profitability.

Profitability is Key

Now in Chicago for just over seven years, Stevenson says his goal isn’t to be the biggest, but the most profitable. That means that it’s important that he not take on too many jobs, so in the event that an employee is sick or decides to quit, he can step in and do the job—never skipping a beat.  “I train all of my employees and I won’t send someone to your house that I wouldn’t send to my own house,” he says. 

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Black Enterprise Contributors Network 

The post Black Grout Medic Franchise Owner Finds Success in Two States appeared first on Black Enterprise.

Former NFL Player Chase Minnifield On Creating Helping Hand for Housing Needy Students

Knowing when to pivot is extremely important whether you’re a creative working in corporate or you run your own business. Having a backup plan is equally important. Former Washington Redskins defensive back and CEO of Helping Hand L.L.C., and President of EZ Turn, Chase Minnifield knows that all too well. The three-time entrepreneur has worked strategically on his game plan to ensure that he would thrive outside of the football arena.

After leaving the NFL, Minnifield launched Helping Hand L.L.C., an apartment service provider specializing in a variety of services such as late-night security and valet waste service that bring comfort for college students and assistance to college housing managers across the country. Minnifield is also president of EZ Turn, which is a mobile app and web portal specific to the student housing turn season. The EZ Turn app is designed to improve property staff performance, vendor performance, and communication, through improved efficiency, and advanced planning and better organization.

As someone who had to come up with new plays in the fourth quarter of his career, Minnifield is passionate about educating others on diversifying their income and opportunities. For the past four years, Minnifield has been tackling life as an entrepreneur and businessman. And next month in Charlotte he is going to help innovators, founders, and creators come up with a game plan to generate new streams of revenue at FWD.

In a sit-down interview with The Shadow League, Minnifield discusses his transition from being a student-athlete at the University of Virginia to joining the 53-man roster for the Washington Redskins and the ebbs and flows of running two businesses.

 

If you want to hear and learn more from Minnifield, add attending FWD to your business game plan and meet us in the QC! Get your tickets today.

The post Former NFL Player Chase Minnifield On Creating Helping Hand for Housing Needy Students appeared first on Black Enterprise.

New Balenciaga Scholarship Gives Students of Color at Pratt Institute A Free Ride

Following the outcry against racist “blackface” fashion and the lack of diversity in the notoriously white industry, a number of luxury fashion houses have created initiatives to provide opportunities for people of color. Balenciaga, for instance, recently announced a full four-year scholarship that will be awarded to two students of color at Pratt Institute, a university in New York City known for its highly ranked programs in architecture, art, and design.

News of the new scholarship was announced Tuesday night during Pratt’s annual Celebration of the Creative Spirit scholarship benefit, where Demna Gvasalia, creative director of Balenciaga, was honored with the Creative Spirit Award. Although Gvasalia was unable to attend the gala, the luxury brand made a commitment to The Black Alumni of Pratt (BAP) to offer scholarships for students of African and Latinx descent. BAP was established in 1990 to provide scholastic and career opportunities for black and brown students and graduates. The group has raised more than $5 million over the last three decades to help advance students of color looking to pursue higher education in the field of art and design.

Balenciaga is one of several major fashion labels taking steps to remedy the lack of diversity in the fashion industry. Earlier this year, Prada tapped director Ava DuVernay and artist/activist Theaster Gates to co-chair the newly formed Prada Diversity and Inclusion Advisory Council, which aims to elevate voices of color within the company and the fashion world-at-large. Prada created the council in response to a firestorm of controversy that erupted over its monkey-faced keychains that many saw as a mocking blackface design. Likewise, Gucci faced backlash over its balaclavas sweaters, which critics said resembled racist imagery of the black Sambo caricature. Since the scandal, the high fashion house unveiled a multi-faceted diversity and inclusivity effort that includes hiring their first Global Director for Diversity and Inclusion, a multicultural design scholarship program to train and hire underrepresented groups of talent, and an employee sensitivity training to increase cultural awareness.

The post New Balenciaga Scholarship Gives Students of Color at Pratt Institute A Free Ride appeared first on Black Enterprise.

Former Banker Finds Success in Synthetic Hair Extensions Business

Tiffini Gatlin—a former corporate bank executive—turned her 20-year side hustle of braiding and protective styling hair into a beauty brand by creating the first pre-curled and looped synthetic crochet hair. With a successful sale of her first synthetic hair brand, Curlkalon Hair Collection, Gatlin expanded her vision for creating safe and affordable synthetic hair extensions with the launch of her second brand, Latched and Hooked Beauty.

Her products are a staple in the synthetic hair industry, catching the attention of celebrities such as Gabrielle Union and mainstream media outlets including Allure, which named her brand one of the best for women of color.

In this interview, Gatlin expands on her career pivot and future plans.

Black Enterprise: Tell us about how you got started in the industry and what was your inspiration?

Gatlin: I actually started in the beauty industry when I was 16-years-old. Ms. Gloria, a popular braider in my neighborhood, asked me if I was interested in learning how to braid and told me how much money I could make, so I decided to give it a try. For a few months on the weekends, I’d walk almost a mile to her home, and she’d teach me different techniques and even allowed me to practice on her clients. Several months later, I started building my own clientele. I used my friend Naima and other popular girls in my high school as models to display my work and attract clients strictly by word of mouth.

I didn’t pick braiding back up as a side hustle until I became an entrepreneur in 2010. I used the money earned from braiding hair to fund my entrepreneurial goals. In 2014, I took notice of girls on Instagram using a century-old method called crochet braiding to create voluminous curls, and I thought the style was amazing and the perfect style hack for girls who were transitioning, unable to grasp the “perfect rod set” or just wanted to switch up her look for a few weeks. I started trying the style on my clients and although I loved the results I hated the process which consisted of using boiling water to form the synthetic hair into a curl. Because synthetic hair is nothing more than a polymer (plastic), the use of hot water makes the style “set” and voila, you have perfect curls for weeks without any additional maintenance.

You created and manufactured a new product overseas. Can you share what that process was like?

As a natural creative, I became interested in how to make the process safer so that women would not be subjected to hot water burns and professional hairstylist would not have to bear the thought of liabilities due to the method. Not to mention, the time commitment was gruesome and unappealing to a stylist who worked to get more bodies in their chair. After searching in beauty supply stores, I realized there were no unwefted, pre-curled, and looped options. From that moment I became inspired to embark on a journey to design and manufacture the first pre-curled and looped crochet hair that matched the texture of black women’s unprocessed hair. In 2015, I launched my first beauty company, Curlkalon Hair Collection, which was acquired in 2018. Since then, I have expanded my vision of offering quality beauty convenience with the launch of Latched and Hooked Beauty.

Creating a product overseas actually wasn’t overly complicated. We found a few candidates, and I interviewed four prospects via Skype and eventually hired a woman based on her experience with locating factories that specialized in OEM (Original Equipment Manufacturer) development. After signing an NDA with her, we developed a short term contract that outlined her engagement with our business, which included being a liaison and helping us negotiate pricing and finding a factory that could design the prototype and help us break through the language barrier. Once we began production with the factory we chose, we worked directly with the factory, and the liaison relationship ended. I’d say the most challenging part was trusting that what we agreed to would actually show up and not being there in person to observe the process from beginning to end made me feel uneasy.

If someone was interested in inventing a new product, what three things are a must to ensure success and why?

If you are interested in inventing a new product I would recommend these three steps:

• Research your target market – How do you know your target market needs this product? Have you done a focus group? Have you identified a problem? Just because everyone else is doing it and you may have seen someone else become successful doesn’t make it a good idea.
• Create a prototype – Creating a prototype can help you determine how to approach the build-out of your product, you can quickly rule out the approaches that don’t work to focus on the ones that do work.
• Evaluate the manufacturing process for your invention – Can you manufacture in the U.S. or do you need to locate a manufacturer overseas? Knowing your options will help you put costs associated with MOQ’s (minimum order quantity) into perspective as well as give you an idea of how long the process will take to deliver the final goods to your consumer.

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Black Enterprise Contributors Network 

The post Former Banker Finds Success in Synthetic Hair Extensions Business appeared first on Black Enterprise.

Two HBCU Grads Share Why Vacation Rental Properties are Good Investments

After reaching his breaking point, Carrington Carter, a then-pharmaceutical sales manager, decided to leave the industry to make money off of something he loved, travel. Carter partnered with his former college friend and Alpha Phi Alpha Fraternity brother Calvin Butts Jr., and the two turned their passion into profit. The HBCU grads shared how they made traveling profitable through their venture Getaway Society and why other African Americans should consider vacation rental properties to be a solid investment.

How did you create Getaway Society?

The founders say that Getaway Society was initially started as a luxury group travel company that creates amazingly memorable experiences, but we decided to pivot out of that industry for a variety of reasons. A year or so later, it was [my] turn to lead the organization of an annual group ski trip in the Poconos. After identifying a house to rent, collecting everyone’s money, and then working with the homeowner to secure the house, he started running the numbers and thought to himself, “Wait a minute, I think I can do this. Why not buy a house and have people pay me to rent it instead of the other way around?”

This was in 2013, so Airbnb, HomeAway, and Vrbo were around, but not nearly as popular as they are now. Shortly after the trip was over, Carrington developed a plan, involved Calvin Butts, Jr. and Jeremiah Myers, two of his colleagues from Hampton University, and Getaway Society was reborn. Our love for travel, exploring the world, and social and family gatherings served as the catalyst to acquiring a network of vacation rental homes to share with like-minded people.

Calvin Butts Jr.: After starting construction on a brand new vacation rental home in the Pocono Mountains in September of 2014, and acquiring another vacation rental home on Martha’s Vineyard in December of 2014, Getaway Society evolved to a premium vacation rental home company, still creating those same amazingly memorable experiences. Now with approximately $5 million in properties we own and manage: one home in the Poconos, three on Martha’s Vineyard, and now one in Hilton Head with our acquisition this year, we are excited about the opportunities for growth in this $170 billion global vacation rental home market. Our ownership plus management model enables us to provide a consistent, luxury VIP concierge approach to all our homes.

Carter: With Getaway Society, we combined a few things that were exciting and important to us. We’re capitalizing on our growing interest in real estate, in a fun and engaging way. It provides multiple revenue streams and builds wealth, with the ultimate goal of financial freedom for ourselves and generations after we’re gone. It also touches on our interest in traveling and creating new experiences.

Butts: Think about it, many of us have been on a group trip with friends/family and experienced issues or did not know what to expect. At Getaway Society, we try to take the friction out of group travel and obsess over making our guests’ vacation seamless and enjoyable. At every single moment, whether answering questions before their stay, sending check-in/check-out instructions, or responding to any needs during their stay, we are eager to exceed expectations.

Carter: We also take the time to build local connections and relationships with private chefs, restaurants, and golf courses, etc. We have a diverse set of partners, contractors, and vendors, and we also make it a point to help black business owners to scale their business, not just through financial support, but also through teaching and mentoring.

Why should other black investors consider investing in the vacation rental space?

Carter: By owning a vacation rental home, investors can realize rental income, which pays down the mortgage and builds equity in the home. Often homes in resort-type communities appreciate faster than traditional neighborhoods, which builds wealth and increases net worth. Investors can realize capital gains upon sale of the home. Also, investors can use the home as much as they like (preferably in the offseason so rental income isn’t impacted). What a great investment!

 Butts: Our favorite part is the “soft ROI” as we like to call it. The home can instantly become a valuable asset that can be leveraged and shared with friends, family, colleagues, and also clients… building better relationships in the process. It’s truly priceless.

How can homeowners use home equity to invest in vacation rentals?

Carter: There are three primary ways that homeowners can use home equity to invest in vacation rentals: cash out refinance; home equity loan; [and] home equity line of credit (HELOC)

Most banks will allow homeowners to tap up to 90% of the value, commonly referred to as 90% LTV (loan-to-value) of a primary residence. However, for an investment property (single/multifamily, commercial property, etc.), most banks will only allow 65%-80% LTV. Example: If your house (primary residence) is worth $500,000 and your remaining mortgage balance is $250,000, the bank will allow you to borrow up to 90% of the value (90% of $500,000 is $450,000). Therefore, after subtracting the remaining mortgage balance, you can tap up to $200,000 in equity ($450,000 – $250,000) to buy a vacation rental home, so long as the higher mortgage payment still fits within your DTI (debt-to-income) ratio.

In the above example, in a cash-out refinance, you would convert the home equity into $200,000 cash and have a new mortgage balance of $450,000, usually at a fixed rate. Using a home equity loan, you would have two mortgages/loans: (1) One with the remaining mortgage balance of $250,000, and (2) The other for $200,000, which is the amount of home equity you tapped, both likely at fixed rates. In a home equity line of credit (HELOC), the $200,000 in equity you converted would essentially work like a credit card with a variable interest rate (probably at least twice the fixed rate). You would have a $200,000 limit and could use it and pay it back as needed. There’s typically a draw (borrow) period for 5-10 years in which you’re responsible for interest only or 1% of the balance, then there’s a repayment period of 10-20 years in which you’re responsible for principal and interest.

We have successfully used cash-out refinances, home equity loans, home equity lines of credit, and private equity from investors to fund the expansion of our real estate portfolio starting with one single-family rental and growing to over $5 million in real estate in the past seven years.

 Butts:  Also, we won’t expound on it here, but aside from home equity, there are also ways to leverage one’s IRA (called a self-directed IRA) to invest in alternative asset classes, such as real estate.

 

Register now for FWD – an all-new event for innovators, creators, entrepreneurs, and founders of color. It’s business on your own terms. Let’s go FWD!

Registration link: http://bit.ly/2JfaMBM

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