Jim on Black in Business asked “What are we known for?” For me, it seems that we’re just known for our athletic ability. In a follow up post, he suggested that “being great” should be our business niche. I think this is a worthwhile goal to have in general, but it doesn’t really help us begin to achieve wealth as a whole. As I’ve said before, the main thing holding us back is the unwillingness to work together. Once we get past that, we can all achieve so much more than what we have now.
The Black “business niche” has become an interesting idea to me. Last week, I met up with some young black professionals and we were talking about how we all need to come together. In our region, there is no reason that with our resources, we can’t have a Sweet Auburn here. But I think I have a business niche for Blacks, commercial real estate. The article about Indian-Americans controlling 43% of the hotel industry is what got me thinking about the commercial market.
Think about it, a lot of black businesses own their own barbershops, hair salons, restaurants, doctor/dentist offices, etc. These are all commercial properties. To get started, if you already own your building, you just need to start another company and transfer ownership of the building to that company. At that point, you can pay rent to your new company. In the future, this could be useful if you decided to sell your business, but still receive rent payments through your commercial real estate company.
Now, imagine if the barbershop and hair salon owners got together and bought a larger building and used a third company to own the building that they both paid rent to. You could take this income and buy other buildings. Sell those, and buy larger buildings. Eventually, you could own some of the largest commercial properties in your city or region. This would work with doctors, dentists, professional services and other businesses.
This is just an idea, and I’m sure its a tad bit more complicated than what I described. However, this is what the Indian-Americans did with the hotel industry. They started with the corner hotel that had twenty rooms and traded up. They then brought in family and friends and pooled more money and bought larger properties. Forty years later, they own 43% of the market. If they could do it, why can’t we? Why can’t we own 35% of the entire commercial real estate market? They aren’t making any more land, and real estate is an appreciating asset. All it takes is us coming together and combining our resources. This is a plan I will be seriously looking into within the next two years. Wanna join me?