The major constraints impacting real estate, particularly commercial real estate is soaring prices, high demand, and tight supply. Added to that is the rising cost of capital.
Access to capital has and always will be a barrier to investing in commercial real estate, for most African Americans. In 2022, if you were not an all-cash buyer, you probably either paid too much or didn’t get a deal at all. Sellers tighten the due diligence period, and lenders lengthen their underwriting time frame. Both put a squeeze on transactions closing. It also succeeded in closing many African American investors out of the deal flow.
Since banks now take sixty to ninety days or longer to approved or deny a loan, we often miss out on opportunities that otherwise would be within our grasp if we could pay cash!
There are approximately 33,000 black owned businesses in Detroit. Most of them lease their place of operation. For us to participate in the wealth building going on in Detroit, this must change. The way you deliver change in a community is by giving people equal access to economic opportunities.
Owning our own buildings has many benefits to operating a business. First, it provides collateral to use as leverage for providing much needed operating capital. Banks won’t loan you anything if you don’t own anything. Small business at its core is the economic engine of the black community. For (Black) Detroit to grow, small business must be at the forefront of that growth.
(Part 1 of 3)
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