2021 saw a lot of movement toward supporting black-owned businesses, such as Prudential’s $200M commitment that was announced in August and, more recently, the Amazon Housing Equity Fund. We interviewed Dr. Van Williams, the Founder and Managing Partner of The Proactive Realty Income Fund, LLC, to get his thoughts on this and on whether investors are doing enough to support minorities in America. 

Dr. Williams stated that he sees this trend as positive but is not sure that it is enough to create the change that minorities across America need. “I have talked with many business leaders, especially in real estate, and what I have found is that while there are genuine voices who are working hard to improve the lives of minority families through real estate investments, it is not enough to make a significant difference for enough people. Too many minorities are still struggling, and I think we can do more to assist them.”

One issue, Dr. Williams believes, is that the black-owned businesses normally supported, especially in real estate, are those that already have $30-40M AUM and above. “Tech-driven funds normally receive greater attention even if their risk-weighted returns are relatively insignificant,” he says. “What I think the investment community could do better is to look for funds that are more traditional and value-oriented.”

Dr. Williams thinks that more attention needs to be paid to those companies that are working to create a social impact, including in affordable housing. “Focusing on the larger black-tech funds is important, of course, but so is the other side of the equation: having safe, dignified housing to live in. Proactive Realty Income Fund and other organizations are doing the hard work of going into really rough areas and making long-lasting change. It is not always as flashy as tech, but it is just as crucial.”

Dr. Williams has spoken with other leaders of black-led funds, and he says that the general feeling is one of frustration. “What I hear from my peers is that they are told their fund is not fit and that it can take weeks or even months to get a reply.” 

Perhaps some of this is inevitable, Dr. Williams concedes, but he says that what is at issue is the ability of these organizations and his own to supply minorities with the life essentials that they need. “That starts with more people hearing about what we do. Even a small grant could mean the difference between building a good digital marketing campaign that can get a cause in front of the right people and having it struggle to be recognized. The media needs to focus more on the roll-up-your-sleeves, get-down-in-the-trenches stories that Proactive Realty Income Fund and its peers are producing every day.”

Dr. Williams elaborates on the work he and his employees are doing at Proactive Realty Income Fund. “We believe that poverty is structural and that definitive actions can be taken to stimulate cycles that improve real estate and invite higher real estate values, which in turn drive improving fortunes for homeowners. My 23 years of experience has taught me where to look, what actions to take, and what strategies to pursue in creating a social impact and profit-oriented fund. I’ve identified three areas: multifamily, manufactured home parks, and single room occupancies (SROs). Of our extensive pipeline of potential deals, we have over 1,500 units ready to be taken down. Three examples of our focus include 170 units in Orangeburg, South Carolina; 60 units in Memphis, Tennessee; and 100 units in Harvey, Illinois.”

Dr. Williams explains that his fund’s approach utilizes an impact scoring model administered by JTC Group, a fund administrator that specializes in impact funds. “For example, our impact score was 82 out of 100 on our Orangeburg, South Carolina, manufactured home park (see a video here), where, in a low-income community, our efforts directly led to 98% home ownership for single mothers and other families who never thought they could own their own home.” 

He adds that the location in Memphis, TN, is an opportunity to open a 60-room single-room occupancy property. “It would be great to connect and discuss the attractive return profile and social impact dynamics around this and other properties in our portfolio.”

Dr. Williams says that by proactively (pun intended) engaging with the community on both sides of the table, Proactive Realty Income Fund is partnering with the investment community to help to fuel and deploy capital and the homeowner to improve their lives. “We are providing a roof over their heads as well as a real home for them to live in,” he states. “There are other social-impact funds that are doing equally wonderful work. My colleagues and I are hopeful that in 2022, we will see a larger embrace of black-owned businesses across all industries so that America continues to thrive and minorities reach their full potential.”