Tulsa Real Estate Fund Aug12

Tulsa Real Estate Fund

Did you know that about 90% of millionaires built their wealth through real estate? Between 1932-2012, however, the average American faced multiple barriers to entry for real estate investment. New laws limited participation in investments, placing a hurdle between small-time investors and wealth. Crowdfunding, legalized in 2012, is a relatively new opportunity for people with limited income to invest in large projects. It permits accredited and unaccredited investors to build wealth through real estate and other investments. The Tulsa Real Estate Fund (TREF) was the first African American owned and managed regulation A+, two-tier real estate investing crowdfund in American history. Its initial purpose was to help low-income families participate in real estate investments that build wealth and combat gentrification. Since then, it has expanded its services to accredited and unaccredited investors. Barriers to entry for low-income families and minorities TREF is a nod to the nation’s past when communities invested together to achieve success against all odds. In the early 1900s for example, the predominately black community of Tulsa, Oklahoma used small group investments to development the town. Conventional lenders would not serve black communities, yet new industries, businesses and families flourished thanks to collective investments. The Greenwood District of Tulsa became so successful that it was called Black Wall Street. Group investments helped the town overcome discriminatory lending practices, but the community would soon face a larger hurdle. In 1921, Tulsa experienced a wave of domestic terrorism later known as the Tulsa Race Riots and the Tulsa Massacre. Though the catalyst is still under dispute, the event resulted in the deaths of as many as 300 African Americans, 800 injuries, and 35 city blocks bombed and set ablaze by white mobs and the National Guard. The events destroyed Black Wall Street and left many families homeless and without a source of income. Tulsa was not the first or the last successful black town to be destroyed by a combination of economic sabotage and domestic terrorism. Following the Great Depression, low-income and minority investors would face new challenges. The Security and Exchange Commission took shape. It is credited for protecting investors from schemes that were rampant during economic recovery. Simultaneously, it hindered how lower-income families could participate in the recovery: investors were required to receive accreditation, the guidelines for which demanded a net worth in excess of $1,000,000. It would be 80 years before an organization like TREF brought large-scale investments back into the hands of the average American. Forming TREF From the end of the Great Depression to 2012, low-income families and minorities were limited in investment opportunities and success due to a combination of domestic terrorism, economic interference and new laws. In 2012, the Obama administration signed the Jumpstart Our Business Startups (JOBS) Act into law. The JOBS Act creates opportunities for people and organizations to participate in investments and publicly raise funds from accredited and unaccredited investors. This new era of crowdfunding lay the foundation for The Tulsa Real Estate Fund, where investments begin as low as $500 at $50 per share. The organization was named to honor the entrepreneurial spirit of Tulsa’s Black Wall Street. It is aimed to highlight the correlation between small investments, real estate and the will to succeed against the odds. TREF founder Ernestine Johnson explained, “The goal of the Tulsa Real Estate Fund, which I cofounded with my husband, is to spread a message of financial empowerment and financial literacy in underserved and working-class communities.” The women propelling TREF Around 2017, Johnson learned that the median net worth for black women in her age range was $500. “This did not sit right with me,” recalled the television actress. “I was standing on $1,000 shoes. I said to myself, ‘I have to use my art and my voice to financially empower low income, underserved and urban communities,’” said Johnson. Johnson recruited Johnetta Paye to form TREF. Paye is the owner...