This Couple Raised $10MM in One Week. Here’s How (& Why) They Did It

by | BiggerPockets.com

This article is nearly one year in the making. 

Whether I’m editing or writing, one of the most popular topics is how to raise money. Investments, flips, startups, you name it—everyone wants to know how to raise money.

Up until recently, the very best real estate deals were limited to so-called “accredited investors” (i.e., people who either make $200K a year or have a net worth of $1MM), effectively limiting the best opportunities to 3 percent of the population.

The floodgates have opened in recent years, however, with the JOBS Act. It effectively allows everyday investors to get in on iconic real estate—like the World Trade Center, for instance.

How Pooling Resources Has Changed the Investing Game

For investors, opening up the pool of participants elevates the stakes. Larger volumes of cash are now flowing into the industry, making it the best possible time to be a developer, asset manager, or both.

Even my company and I have seriously toyed with the idea of doing a blind pool Regulation A fund (jargon for SEC-regulated real estate fund). In fact, we probably will at some point in the future (and I’ll probably write about it).

Someone who’s actually done it already is Jay Morrison, an Atlanta-based entrepreneur. Alongside his wife Ernestine, they launched what was the first African-American Regulation A, Tier 2 crowdfund, raising an insane $10 million in a week.

Since then, they’ve picked up a 30,000-square-foot, state-of-the-art half production studio, half co-working incubator they’re calling the TREF Legacy Center.

In addition to projects managed on their own, Tulsa Real Estate Fund (TREF)  co-invests with others.

Related: Real Estate Crowdfunding: An Introduction

On one end, their story underscores the beauty of the American dream. At the same time, their trajectory—as well as their work—mirrors the folklore of billionaire legends—a man and woman with a vision, a dream to build.

I happened to be in Atlanta last year finishing my book when I heard about this. After realizing this oddly serendipitous coincidence, I immediately reached out.

Here we are in their downtown Atlanta offices, which house TREF and a number of other businesses owned by the Morrisons:

Q & A With Entrepreneur Jay Morrison

We sat down in their offices and discussed everything from his beginnings to the vision of the fund to deals they’re looking for.

I never published that interview—until now. Here’s what he said.

How did the Tulsa Real Estate Fund start?

The fund came about during the time my brand grew as a celebrity Realtor in N.Y.C., being a Realtor for Sotheby’s International Realty, becoming an influencer in the economic activist space, and telling my story on [Power 105.1 radio’s morning show] “The Breakfast Club” and on videos and other social blogs.

In short, the way the fund came about was I had seen the wealth gap or the wealth disparity and how gentrification was reshaping urban communities and displacing the residents of urban communities. And I know from my real estate experience that urban developers, urban citizens, poor people—the working-class people, the lower-middle class—I knew that they had no power, no seat at the table because they had no capital.

Related: Real Estate Crowdfunding: Should I Invest?

So that’s why you wanted to get in and help change that?

I saw that there’s just too many opportunities, too many deals for any one person to do or control.

When I saw that, I knew that real estate was the cornerstone to build wealth, also. The urban community, especially the African community in America, couldn’t compete well with other communities. All other communities pooled in their dollars together and started businesses, etc.

What was the key moment for you?

I was trying to figure out how my community can do that, leveraging my influence, my expertise, and what I know about building businesses and companies and about social media and technology—so all my gifts. And how could that work?

So I started doing some research in 2014 and kicked it up in overdrive in 2015 after the [2015 Baltimore Protests], where many Baltimore residents petitioned to build a black Wall Street, which was a socially empowered and self-sustaining black community, such as the one in Tulsa, Okla.

People crossing the busy intersection between traffic on 3rd Avenue and 10th Street in Manhattan in New York City with the glow of sun light in the background

So that’s when the idea for the fund came about?

So the idea of raising capital came in 2014. But the actual birth of the Tulsa Real Estate Fund came about after the Freddie Gray uprising in Baltimore, around 2015 to 2016. I was a part of the social protests on the ground and was on with Anderson Cooper and CNN and FOX and all these different channels because of my social activism. But that was me speaking up.

But that led me to challenge myself and our community to figure out what the solutions could be and who could be responsible to build the solutions for our socio-economic issues. And I took that up.

That didn’t worry you, that you wouldn’t be able to do it?

I knew I had the prowess and the experience to be able to do so, and I knew that controlling our own dollars was the first step to unifying our community, to controlling our neighborhoods, to stopping vandalism, to controlling our school systems. This started with us having capital to begin with, and that’s how I came up with the Tulsa Real Estate Fund.

What’s the story behind the name?

Tulsa was code word for Black Wall Street. I didn’t want to go file an SEC application and bring this company as a “black Wall Street fund.” That might not be the most effective way to do it. I felt it was proper homage and a beacon of hope by building the Tulsa Real Estate Fund out of Tulsa, Okla.

Summary

And this is only some of what Jay had to say. Inspiring, right? I will share the rest of the interview in another post. You don’t want to miss it!

What do you think about Morrison’s fund idea? 

Comment below!

 

About Author

Philip Michael

A native of Denmark, Philip came to New York in 2014 with $79 in his PayPal account. In 2015, he joined Bisnow Media (the largest commercial real estate news source in North America) and helped lead them to a $50M sale as National Editor and Director of Content Strategy. Founder of NYEG, a real estate & VC company with $80M in the development pipeline, Philip and his team are currently developing a series of historic projects, including the first black-owned high rise in Jersey City, the first smart home development in Jersey City's McGinley Square, and the first voice-controlled student housing building in Philadelphia. Philip is the best-selling author of Real Estate Wealth Hacking: How To 10x Your Net Worth In 18 Months and an expert columnist for Forbes, Black Enterprise, Entrepreneur and others.

3 Comments

  1. Mario Jones

    Provide depth on your topic as though you are trying to give a family member as much detail as possible to pursue this fund since youre so excited about it.

    – Did you confirm via SEC docs if 10 mil was raised or can anyone randomly tell you their a successful millionaire and you just write an article.
    – They raised 10 mil in a week and the fund is a yr plus old. What slowed the funding? How much are they at right now. Much less than 10 mil according to SEC docs. Research.
    – How are investors benefiting thus far, a year in?
    – You asked the idea behind the fund , how are projects chosen keeping in tune with gentrification and displacement among blacks.
    – True social activist dont spend time name dropping who from CNN or breakfast club interviewed them and how many marches they showed their face at. Its tacky and a tell tale sign of folks who do social activism for clout or marketing of another product.

Leave A Reply

Pair a profile with your post!

Create a Free Account

Or,


Log In Here