Warren Collier
The Opportunity Zone Expo Podcast
"Show us your track record, and we'll give you a credit line"
Transcription
Jack: Welcome back everyone to the OZExpo Podcast. I'm Jack Heald, your host. And joining me today is Warren Collier, the founder of Black Wealth Group. Warren, welcome to the OZExpo podcast.
Warren: Thank you Jack. I feel very welcome.
Jack: Well good. I'm glad you're here. As I understand it, Black Wealth Group is an Opportunity Zone Fund. How did you get into this business?
Warren: My background is in financial services. I started initially selling insurance back in 2008. And I found myself mainly working in low-income areas and my main job was to educate individuals in these areas about wealth and about finances. Years later, I got an opportunity to get into the financial services business, become a licensed broker, securities broker series 7 and 66.
And I got an opportunity to work with Morgan Stanley, learned from that excellent platform, how to educate individuals on growing wealth and investing. And of course in 2017, President Trump and others put together the new tax law and so much benefits that come along with working with this new tax law that we have an opportunity to develop our country in areas that would traditionally not get any attention. And I thought I was the perfect person to be a link between the wealth and the low-income areas that need the development.
Jack: I love that. You are currently located in the Atlanta area, right? In fact, I think I saw on a map that you're right smack in the middle of Buckhead area. Right?
Warren: That's correct.
Jack: Are you primarily serving the middle Georgia area?
Warren: Primarily in Georgia. We've actually partnered with other funds, looking to pour $500 million into the Atlanta area alone. As far as Black Wealth Group, it is planted in Georgia. Where we start is where we are headquartered at. But we're going to spread this opportunity everywhere across the United States because like I said, it's a law that's designed to assist our entire nation. And we really feel that if we took this opportunity and we really put it into these low-income neighborhoods, we make our country look good as a whole.
Jack: Well, I think we all agree about that and there's no argument there. Before I dive into some of the details of Black Wealth Group and your work as a fund manager, I want to find out a little bit more about you. Give us your background prior to getting into the insurance business. Where'd you grow up, where'd you go to school? That kind of thing.
Warren: Yeah, I'm from Augusta, Georgia. So, that's where everyone knows us for the Masters Tournament. Do you have a good chance to go out and check out the Masters Tournament out here in Augustus from time-to-time? Jack?
Jack: No, I watch it on the tube every year, but I've never actually been to Augusta to see it. It, It'd be a once-in-a-lifetime kind of experience.
Warren: Oh man. It's an excellent experience. And so, I'm from Augusta, born and raised, of course. I spent some time serving in our military. I was a paratrooper stationed out of Fort Gordon and Fort Benning.
Jack: Which branch?
Warren: I was in the Army. I spent some time in the military and I happened to go to ASU, Augusta State University where my focus was in chemistry. And it just happened that while I was in college, looking to pay for college, I kind of stumbled into the insurance industry. A friend of mine introduced me to it just looking to make some money along the way.
And, once I got ahold of the insurance industry, I found myself educating individuals, especially in the low-income areas that didn't get a lot of attention in America that have kind of been falling apart.
The neighborhoods are rundown, the parents unfortunately had passed away and the children didn't necessarily want to keep the property. So, the areas had completely run down. So, that was my start into the financial services area and of being in this space and educating individuals. I learned more. I learned stocks and investing. All of my clients made money in the market.
And of course, when the new tax law here issued by president Trump of 2017, I thought it was a win because I found that most of my clients, whether they were stock investors or bitcoin investors or whoever, most preferred real estate investments, real estate investments were considered particularly safe. And now with the new tax law in place, we've been able to save our clients and earn our clients an additional 30-plus percent on their real estate investments.
Jack: Very good. I want to follow up on one thing you talked about, chemistry. You were a chemistry major?
Warren: That is my background. I've actually published in the American Chemical Society Journal. We were actually developing organic semiconductors which would eventually make your cell phones a little more flexible, and things of that nature. And so yeah, I'm a bit of a nerd in my background.
Jack: The reason I wanted to ask more about that is because folks don't go into one of the STEM fields unless they're really sharp to begin with. I'm fascinated with how people end up in this business, particularly coming out of such an intellectually challenging field as chemistry. For example, I’ve talked to all kinds of folks who've ended up here who followed a similar kind of trajectory. Were you an organic chemistry guy? What got you excited in the chemistry field?
Warren: Everything. Everything about Chemistry. I love inorganic, organic chemistry, of course, which was a little more difficult. Physical chemistry, anything about chemistry. The process of understanding how chemicals come together and how to best mix these chemicals and patience and developing whatever product we may look to build. I mean, to me it feels like alchemy, it feels like I'm spinning lead into gold or something of that nature.
The thing that brought me from that area is while I was in taking the classes, a lot of my friends who were already graduated and were working as engineers, industrial engineers, chemical engineers, I learned that these guys were trying to become brokers. They wanted to get into the financial services space. It was the highest-paid industry and of course there was a lot more freedom and that's what kind of pulled me into this space. When I saw a lot of the people that I looked up to – that had the credentials that I was pursuing – looking at this industry going, hey it might be a brighter light at the end of the tunnel. You get where I'm going?
Jack: Right. One of the things that drives questions like that is a simple understanding about something Scott Adams calls a “talent stack.” When we combine it, when anybody combines competence in a number of fields and brings them all together into a single personality, that tends to separate you from the pack. And so, when I talked to a fund manager who's also got expertise in fields like chemistry, that's really, really unusual. And, sometimes how that pays off is not necessarily obvious. I like to highlight that kind of thing because I know from experience that ultimately it can really make a difference. Alright, let's turn to the Black Wealth Group and the Opportunity Zone investing market. You've got a Qualified Opportunity Fund. Tell us a little bit about Black Wealth Group and your relationship to OZ Funds.
Warren: Well, the Black Wealth Group started initially as just a group to provide financial and wealth education particularly in local low-income areas. I am African American, and you know, I grew up in low-income areas as a child. I obtained knowledge on how the financial industry works, how wealth works, how to grow wealth. And I begin to see the potential in certain areas as far as just educating on how to best spend money or people that had industrial jobs making $120,000, $130,000 a year still living check- to-check. The tech didn't have that basic financial education. And so, the Black Wealth Group started as that, just a group of individuals looking to educate on how money works. And it grew. Eventually became a broker and in my search for clients with assets, I began to develop a network, especially in the Atlanta area of various attorneys, politicians, a lot of wealthy individuals that were focused and very active toward our mission, which was to educate those low-income areas.
And now in 2017, when the tax law passed, it gave us the ability to use real estate to continue to grow in these areas of that. That's pretty much the basis of the Black Wealth Group, and the general idea behind what we're about. We feel that if we take this knowledge that we've obtained, and we take it to these lower income areas and communities, it'll have an overall better effect on the country.
Because those dollars – instead of being wasted or squandered – can be put back into the community in the forms of jobs. You're a person that has a capital gains, they invest into a certain business in these areas. The main thing is we would get our citizens and fellow countrymen working again. We can build affordable housing and reduce the prison pipeline -- individuals going to prison – because when we create opportunities, it’s hard to get in trouble when you're at work nine-to-five.
Jack: Or at least reduce the window of opportunity to get into trouble.
Warren: That's right. Reduce the window. We're going to put you to work. We're trying to provide an affordable place to stay. And you know, that's our contribution to America as Black Wealth Group. I mean, the idea is this America is a capitalistic society and there's nothing like it in the world. And the thing is people just need to know. We have an opportunity to improve wherever we're at.
So, what would be the benefit of foreign investor of working in particular with a Black Wealth Group Qualified Opportunity Fund? Like I've mentioned, we were looking to educate. We're always looking for individuals with experience and investing in the benefit of working with us. We can get most of our clients a line of credit— depending on your credit score only – of up to about 5 million.
So what we do is we pretty much partner with our participants and we say, Hey, look, you have experience in buying and flipping real estate or investing in businesses and things in this area. We locate Opportunity Zones. And what we'll do is if you show us your track record, we'll give a credit line and we're going to do exactly what I mentioned to you earlier. We're going to go into these lower income areas. We're going to build affordable housing, we're going to finance businesses, create jobs. And that's the benefit of working with us. If we see you have the knowledge, we're going to give you the, the capital and, we're going to let Americans get in and everyone's going to pick up shovel and everyone's going to build this road brick by brick together.
Jack: What's the response you're getting from the development community?
Warren: Well, it is hard to keep up. That is the first one that I'm getting. It is hard to keep up with the influx of interest. People sending applications, referring friends and things of that nature. So, it doesn't take long. I mean, it's been a wonderful experience so far.
Jack: If you could do just a back-of-the-napkin calculation, what's the ratio of operating business deals to real estate deals that you're seeing come across your desk?
Warren: Come across my desk? It has to be 70/30. 70 real estate, 30 business deals.
Jack: I'm glad to hear that. I would've guessed a much higher real estate percentage. So, I'm really glad to hear that.
Warren: Yeah. 70, 70 is pretty high. I mean, the thing is we have a presence, the Black Wealth Group – we established relationships with many business owners long ago. That’s a large part of our network, which is probably why that number is so high. But you're right, real estate is the majority of everyone's investment in America. So yeah, that's the reason it would be so high is because we initially started with a large base of business owners within our network.
Jack: Okay. Well I want to highlight that because that's pretty unusual. I talk to a lot of fund managers like you, and it's a whole lot easier to find money than to find deals. My perception has been that the number of real estate deals mostly outnumbers. I think that makes you unique. Now, let's talk about the investor side. This may be less of an issue for you, but an investor says, “hey, I love the idea of Opportunity Zone investing, but I'm a little bit I'm a little concerned about making a 10-year commitment.” How do you respond to those folks?
Warren: Well, the important part is – this is what I tell investors – this is why you need an opportunity fund to deal with because you make a commitment to have an interest in the Opportunity Fund for 10 years. You get where I'm going? Just like with a mutual fund, when you invest into a mutual fund, you might buy this particular stock for this period. But also within that time frame, the fund manager can purchase into other investments and give you a bit more of a diverse portfolio. So that's the difference.
We don't put you in a position where you just buy one property and you hold onto that property for 10 years. You have a lot more options with a qualified opportunity fund and it gets more into the consulting space. So, we have different techniques for that that are comparable towards 1231 Exchange and things of that nature.
Jack: Let's go ahead and ask that question. This is certainly a decision a lot of investors have to make, and this is a question that's been answered at other places, but I'd love to hear you talk about it. What's the benefits of taking your cap gains from what ordinarily would have been a 1231 Exchange and dumping them into your qualified opportunity fund?
Warren: Well, the main difference is the eventual tax-exempt status. As a broker, I learned that most real estate investors found self-directed IRAs very attractive because it gives you that ability for your real estate investments through the IRA. The differences with the Qualified Opportunity Fund, after 10 years, it's tax exempt. That's not like a traditional IRA where you have to wait till 59-and-a-half, then you're going to get this penalty or it's not like anything of that nature. That's really the main difference. If you’re willing to be patient and hold that interest in our fund for 10 years and grow those capital gains through techniques that we'll show you, those will be tax exempt, which will increase your returns at least by 30%. If you're making over $40,000, the capital gains tax rate can be as high as 37% at that point.
Jack: Warren, you've also you mentioned something there that I think is a little unusual and that's the consulting side of Black Wealth Group. Talk to us a little bit about the consulting side of Black Wealth Group.
Warren: Okay. Well, our consulting side. The tax law is rarely relatively new, and it's being updated as we speak, so things are changing quite regularly. We partnered with various tax CPAs and attorneys. And here again, we reverted back to our core mission to educate. And that's what our consulting service does. The average real estate investor who's been investing 30, 40 years, they have a method in place that they're accustomed to and they're not necessarily aware of to the new tax laws and how you can take advantage of these tax deferments and eventually tax exemptions. And so, our job as a consultant, is not only to provide funding but also to go into various techniques in which an individual can rapidly grow their capital gains within their qualified opportunity fund an account with us. And pretty much benefit from those exemptions.
Jack: Alright. The consulting side of the business is primarily targeted at the investor side.
Warren: Correct. Primarily targeted investors’ side.
Jack: You know, I think there's a really important question I should've asked but didn't. Are you looking at deals outside of the central Georgia area or you focused -- in terms of the deal side – on developers? Are you focused strictly on central Georgia or are you open to deals anywhere in the country? What's the range?
Warren: We'll go anywhere in the country nationwide. The Black Wealth Group has connections from California to New York. We established a foothold in Georgia and got an idea of how it works and established many relationships in Georgia. I mean, of course that's where we're from. But we're nationwide.
Jack: I want to find out a little bit more about Warren Collier. What are the qualities, and I'm talking about the character qualities -- that turn of mind or personality – that has allowed you to lift yourself out of that low-income, growing-up situation to a place now where you're a fund manager, where you're attracting investors and funding development projects? What is it, what are the qualities that allowed you to do that? And I guess in some ways to realize in your own life the American dream?
Warren: Well, I feel I was fortunate to be born here in the United States. Yeah, of course America has history. But you know, like I say, this is the land of opportunity. It's a land where when I was 12 coming up in Augusta in the summertime, instead of my mother sending me out to summer school, she’d get up and put us in a car and she taught me how to go door-to-door throughout the neighborhood asking individuals, would they like their curb painted. The rain will wash the paint of the house number off the curb in the neighborhoods. We’d go around, we actually bought the little number molds, and for $10 we'd go through and paint curbs and make sure everyone's address number was on their curb.
And from that experience, that taught me the essence of the American dream, the ability for a person to get out, go door-to-door, provide a service, and obtain what you want, which at the time for me was a new toy. But eventually that grew into something else. As a young adult I knew, “Hey, look, I can go get me a job.” And after that it was about exposure. You know, once I had obtained that American mindset as far as capitalism, the next thing was exposure. From being in college, being exposed to science and complex math, teaching me how to think creatively as well as analytically.
And then eventually learning sales, going door-to-door selling insurance, and then on pure commission. After obtaining those sales skills, then eventually I learned the securities business, which is a very difficult and very regulated business. Obtaining that education, I realized that once you know your craft, it's no different whether I'm going door-to-door painting curbs or whether I'm calling door-to-door looking to get a person to invest $300,000 with me. As long as I have those basic skills that I learned, and I understand my craft well, it brings me to the place where I'm at.
Jack: I don't know that you could have said any of that any better. It summarizes it so succinctly and so clearly. I love that image of a young boy knocking on a door saying, “Hey, I'll paint your numbers on your curb for 10 bucks.”
I can't tell you the number of stories I come across with successful people who got their start doing one of three things. Well, actually it's one thing: door-to-door sales of some variety. It's something like what you're talking about, selling personal services where you see it immediately – an immediate return – or selling books door to door or selling insurance. It's astonishing what a training ground that is for success.
Warren: I agree.
Jack: Well Warren, we've come to the end of the conversation here, but before I let you go, have you got any last words for our listeners?
Warren: My last word is, “take full advantage of the Opportunity Zone.” Get in contact with us. We have plenty of funds. We're looking to partner with individuals who have the knowledge. I've got access to the capital. Let's grow this country and make our country the best we can be. And, let's do great things together.
Jack: Alright, so how do folks get ahold of you if they're interested and want to talk to you about investing in them?
Warren: We definitely can be a start. We are here in Atlanta. Our phone number is (404) 748-8489 and of course we're on Eastern Standard Time. You can call us directly, and we'll, we'll definitely direct you where you need to go.
Jack: Alright, very good. And I want to remind our listeners that the contact information for Warren Collier and the Black Wealth Group is going to be available on the podcast website.
I want to thank you, Warren, for being with us today. On behalf of Warren Collier, I am Jack Heald for the OZExpo podcast. Thanks for listening. Please go ahead and subscribe. You always get updated when we have new episodes. Those come out all the time and we will talk to you next time.
Announcer: This podcast is for informational purposes only and does not constitute legal tax or investment advice. For specific recommendations, please consult with your financial, legal, or tax professional.
Warren: Thank you Jack. I feel very welcome.
Jack: Well good. I'm glad you're here. As I understand it, Black Wealth Group is an Opportunity Zone Fund. How did you get into this business?
Warren: My background is in financial services. I started initially selling insurance back in 2008. And I found myself mainly working in low-income areas and my main job was to educate individuals in these areas about wealth and about finances. Years later, I got an opportunity to get into the financial services business, become a licensed broker, securities broker series 7 and 66.
And I got an opportunity to work with Morgan Stanley, learned from that excellent platform, how to educate individuals on growing wealth and investing. And of course in 2017, President Trump and others put together the new tax law and so much benefits that come along with working with this new tax law that we have an opportunity to develop our country in areas that would traditionally not get any attention. And I thought I was the perfect person to be a link between the wealth and the low-income areas that need the development.
Jack: I love that. You are currently located in the Atlanta area, right? In fact, I think I saw on a map that you're right smack in the middle of Buckhead area. Right?
Warren: That's correct.
Jack: Are you primarily serving the middle Georgia area?
Warren: Primarily in Georgia. We've actually partnered with other funds, looking to pour $500 million into the Atlanta area alone. As far as Black Wealth Group, it is planted in Georgia. Where we start is where we are headquartered at. But we're going to spread this opportunity everywhere across the United States because like I said, it's a law that's designed to assist our entire nation. And we really feel that if we took this opportunity and we really put it into these low-income neighborhoods, we make our country look good as a whole.
Jack: Well, I think we all agree about that and there's no argument there. Before I dive into some of the details of Black Wealth Group and your work as a fund manager, I want to find out a little bit more about you. Give us your background prior to getting into the insurance business. Where'd you grow up, where'd you go to school? That kind of thing.
Warren: Yeah, I'm from Augusta, Georgia. So, that's where everyone knows us for the Masters Tournament. Do you have a good chance to go out and check out the Masters Tournament out here in Augustus from time-to-time? Jack?
Jack: No, I watch it on the tube every year, but I've never actually been to Augusta to see it. It, It'd be a once-in-a-lifetime kind of experience.
Warren: Oh man. It's an excellent experience. And so, I'm from Augusta, born and raised, of course. I spent some time serving in our military. I was a paratrooper stationed out of Fort Gordon and Fort Benning.
Jack: Which branch?
Warren: I was in the Army. I spent some time in the military and I happened to go to ASU, Augusta State University where my focus was in chemistry. And it just happened that while I was in college, looking to pay for college, I kind of stumbled into the insurance industry. A friend of mine introduced me to it just looking to make some money along the way.
And, once I got ahold of the insurance industry, I found myself educating individuals, especially in the low-income areas that didn't get a lot of attention in America that have kind of been falling apart.
The neighborhoods are rundown, the parents unfortunately had passed away and the children didn't necessarily want to keep the property. So, the areas had completely run down. So, that was my start into the financial services area and of being in this space and educating individuals. I learned more. I learned stocks and investing. All of my clients made money in the market.
And of course, when the new tax law here issued by president Trump of 2017, I thought it was a win because I found that most of my clients, whether they were stock investors or bitcoin investors or whoever, most preferred real estate investments, real estate investments were considered particularly safe. And now with the new tax law in place, we've been able to save our clients and earn our clients an additional 30-plus percent on their real estate investments.
Jack: Very good. I want to follow up on one thing you talked about, chemistry. You were a chemistry major?
Warren: That is my background. I've actually published in the American Chemical Society Journal. We were actually developing organic semiconductors which would eventually make your cell phones a little more flexible, and things of that nature. And so yeah, I'm a bit of a nerd in my background.
Jack: The reason I wanted to ask more about that is because folks don't go into one of the STEM fields unless they're really sharp to begin with. I'm fascinated with how people end up in this business, particularly coming out of such an intellectually challenging field as chemistry. For example, I’ve talked to all kinds of folks who've ended up here who followed a similar kind of trajectory. Were you an organic chemistry guy? What got you excited in the chemistry field?
Warren: Everything. Everything about Chemistry. I love inorganic, organic chemistry, of course, which was a little more difficult. Physical chemistry, anything about chemistry. The process of understanding how chemicals come together and how to best mix these chemicals and patience and developing whatever product we may look to build. I mean, to me it feels like alchemy, it feels like I'm spinning lead into gold or something of that nature.
The thing that brought me from that area is while I was in taking the classes, a lot of my friends who were already graduated and were working as engineers, industrial engineers, chemical engineers, I learned that these guys were trying to become brokers. They wanted to get into the financial services space. It was the highest-paid industry and of course there was a lot more freedom and that's what kind of pulled me into this space. When I saw a lot of the people that I looked up to – that had the credentials that I was pursuing – looking at this industry going, hey it might be a brighter light at the end of the tunnel. You get where I'm going?
Jack: Right. One of the things that drives questions like that is a simple understanding about something Scott Adams calls a “talent stack.” When we combine it, when anybody combines competence in a number of fields and brings them all together into a single personality, that tends to separate you from the pack. And so, when I talked to a fund manager who's also got expertise in fields like chemistry, that's really, really unusual. And, sometimes how that pays off is not necessarily obvious. I like to highlight that kind of thing because I know from experience that ultimately it can really make a difference. Alright, let's turn to the Black Wealth Group and the Opportunity Zone investing market. You've got a Qualified Opportunity Fund. Tell us a little bit about Black Wealth Group and your relationship to OZ Funds.
Warren: Well, the Black Wealth Group started initially as just a group to provide financial and wealth education particularly in local low-income areas. I am African American, and you know, I grew up in low-income areas as a child. I obtained knowledge on how the financial industry works, how wealth works, how to grow wealth. And I begin to see the potential in certain areas as far as just educating on how to best spend money or people that had industrial jobs making $120,000, $130,000 a year still living check- to-check. The tech didn't have that basic financial education. And so, the Black Wealth Group started as that, just a group of individuals looking to educate on how money works. And it grew. Eventually became a broker and in my search for clients with assets, I began to develop a network, especially in the Atlanta area of various attorneys, politicians, a lot of wealthy individuals that were focused and very active toward our mission, which was to educate those low-income areas.
And now in 2017, when the tax law passed, it gave us the ability to use real estate to continue to grow in these areas of that. That's pretty much the basis of the Black Wealth Group, and the general idea behind what we're about. We feel that if we take this knowledge that we've obtained, and we take it to these lower income areas and communities, it'll have an overall better effect on the country.
Because those dollars – instead of being wasted or squandered – can be put back into the community in the forms of jobs. You're a person that has a capital gains, they invest into a certain business in these areas. The main thing is we would get our citizens and fellow countrymen working again. We can build affordable housing and reduce the prison pipeline -- individuals going to prison – because when we create opportunities, it’s hard to get in trouble when you're at work nine-to-five.
Jack: Or at least reduce the window of opportunity to get into trouble.
Warren: That's right. Reduce the window. We're going to put you to work. We're trying to provide an affordable place to stay. And you know, that's our contribution to America as Black Wealth Group. I mean, the idea is this America is a capitalistic society and there's nothing like it in the world. And the thing is people just need to know. We have an opportunity to improve wherever we're at.
So, what would be the benefit of foreign investor of working in particular with a Black Wealth Group Qualified Opportunity Fund? Like I've mentioned, we were looking to educate. We're always looking for individuals with experience and investing in the benefit of working with us. We can get most of our clients a line of credit— depending on your credit score only – of up to about 5 million.
So what we do is we pretty much partner with our participants and we say, Hey, look, you have experience in buying and flipping real estate or investing in businesses and things in this area. We locate Opportunity Zones. And what we'll do is if you show us your track record, we'll give a credit line and we're going to do exactly what I mentioned to you earlier. We're going to go into these lower income areas. We're going to build affordable housing, we're going to finance businesses, create jobs. And that's the benefit of working with us. If we see you have the knowledge, we're going to give you the, the capital and, we're going to let Americans get in and everyone's going to pick up shovel and everyone's going to build this road brick by brick together.
Jack: What's the response you're getting from the development community?
Warren: Well, it is hard to keep up. That is the first one that I'm getting. It is hard to keep up with the influx of interest. People sending applications, referring friends and things of that nature. So, it doesn't take long. I mean, it's been a wonderful experience so far.
Jack: If you could do just a back-of-the-napkin calculation, what's the ratio of operating business deals to real estate deals that you're seeing come across your desk?
Warren: Come across my desk? It has to be 70/30. 70 real estate, 30 business deals.
Jack: I'm glad to hear that. I would've guessed a much higher real estate percentage. So, I'm really glad to hear that.
Warren: Yeah. 70, 70 is pretty high. I mean, the thing is we have a presence, the Black Wealth Group – we established relationships with many business owners long ago. That’s a large part of our network, which is probably why that number is so high. But you're right, real estate is the majority of everyone's investment in America. So yeah, that's the reason it would be so high is because we initially started with a large base of business owners within our network.
Jack: Okay. Well I want to highlight that because that's pretty unusual. I talk to a lot of fund managers like you, and it's a whole lot easier to find money than to find deals. My perception has been that the number of real estate deals mostly outnumbers. I think that makes you unique. Now, let's talk about the investor side. This may be less of an issue for you, but an investor says, “hey, I love the idea of Opportunity Zone investing, but I'm a little bit I'm a little concerned about making a 10-year commitment.” How do you respond to those folks?
Warren: Well, the important part is – this is what I tell investors – this is why you need an opportunity fund to deal with because you make a commitment to have an interest in the Opportunity Fund for 10 years. You get where I'm going? Just like with a mutual fund, when you invest into a mutual fund, you might buy this particular stock for this period. But also within that time frame, the fund manager can purchase into other investments and give you a bit more of a diverse portfolio. So that's the difference.
We don't put you in a position where you just buy one property and you hold onto that property for 10 years. You have a lot more options with a qualified opportunity fund and it gets more into the consulting space. So, we have different techniques for that that are comparable towards 1231 Exchange and things of that nature.
Jack: Let's go ahead and ask that question. This is certainly a decision a lot of investors have to make, and this is a question that's been answered at other places, but I'd love to hear you talk about it. What's the benefits of taking your cap gains from what ordinarily would have been a 1231 Exchange and dumping them into your qualified opportunity fund?
Warren: Well, the main difference is the eventual tax-exempt status. As a broker, I learned that most real estate investors found self-directed IRAs very attractive because it gives you that ability for your real estate investments through the IRA. The differences with the Qualified Opportunity Fund, after 10 years, it's tax exempt. That's not like a traditional IRA where you have to wait till 59-and-a-half, then you're going to get this penalty or it's not like anything of that nature. That's really the main difference. If you’re willing to be patient and hold that interest in our fund for 10 years and grow those capital gains through techniques that we'll show you, those will be tax exempt, which will increase your returns at least by 30%. If you're making over $40,000, the capital gains tax rate can be as high as 37% at that point.
Jack: Warren, you've also you mentioned something there that I think is a little unusual and that's the consulting side of Black Wealth Group. Talk to us a little bit about the consulting side of Black Wealth Group.
Warren: Okay. Well, our consulting side. The tax law is rarely relatively new, and it's being updated as we speak, so things are changing quite regularly. We partnered with various tax CPAs and attorneys. And here again, we reverted back to our core mission to educate. And that's what our consulting service does. The average real estate investor who's been investing 30, 40 years, they have a method in place that they're accustomed to and they're not necessarily aware of to the new tax laws and how you can take advantage of these tax deferments and eventually tax exemptions. And so, our job as a consultant, is not only to provide funding but also to go into various techniques in which an individual can rapidly grow their capital gains within their qualified opportunity fund an account with us. And pretty much benefit from those exemptions.
Jack: Alright. The consulting side of the business is primarily targeted at the investor side.
Warren: Correct. Primarily targeted investors’ side.
Jack: You know, I think there's a really important question I should've asked but didn't. Are you looking at deals outside of the central Georgia area or you focused -- in terms of the deal side – on developers? Are you focused strictly on central Georgia or are you open to deals anywhere in the country? What's the range?
Warren: We'll go anywhere in the country nationwide. The Black Wealth Group has connections from California to New York. We established a foothold in Georgia and got an idea of how it works and established many relationships in Georgia. I mean, of course that's where we're from. But we're nationwide.
Jack: I want to find out a little bit more about Warren Collier. What are the qualities, and I'm talking about the character qualities -- that turn of mind or personality – that has allowed you to lift yourself out of that low-income, growing-up situation to a place now where you're a fund manager, where you're attracting investors and funding development projects? What is it, what are the qualities that allowed you to do that? And I guess in some ways to realize in your own life the American dream?
Warren: Well, I feel I was fortunate to be born here in the United States. Yeah, of course America has history. But you know, like I say, this is the land of opportunity. It's a land where when I was 12 coming up in Augusta in the summertime, instead of my mother sending me out to summer school, she’d get up and put us in a car and she taught me how to go door-to-door throughout the neighborhood asking individuals, would they like their curb painted. The rain will wash the paint of the house number off the curb in the neighborhoods. We’d go around, we actually bought the little number molds, and for $10 we'd go through and paint curbs and make sure everyone's address number was on their curb.
And from that experience, that taught me the essence of the American dream, the ability for a person to get out, go door-to-door, provide a service, and obtain what you want, which at the time for me was a new toy. But eventually that grew into something else. As a young adult I knew, “Hey, look, I can go get me a job.” And after that it was about exposure. You know, once I had obtained that American mindset as far as capitalism, the next thing was exposure. From being in college, being exposed to science and complex math, teaching me how to think creatively as well as analytically.
And then eventually learning sales, going door-to-door selling insurance, and then on pure commission. After obtaining those sales skills, then eventually I learned the securities business, which is a very difficult and very regulated business. Obtaining that education, I realized that once you know your craft, it's no different whether I'm going door-to-door painting curbs or whether I'm calling door-to-door looking to get a person to invest $300,000 with me. As long as I have those basic skills that I learned, and I understand my craft well, it brings me to the place where I'm at.
Jack: I don't know that you could have said any of that any better. It summarizes it so succinctly and so clearly. I love that image of a young boy knocking on a door saying, “Hey, I'll paint your numbers on your curb for 10 bucks.”
I can't tell you the number of stories I come across with successful people who got their start doing one of three things. Well, actually it's one thing: door-to-door sales of some variety. It's something like what you're talking about, selling personal services where you see it immediately – an immediate return – or selling books door to door or selling insurance. It's astonishing what a training ground that is for success.
Warren: I agree.
Jack: Well Warren, we've come to the end of the conversation here, but before I let you go, have you got any last words for our listeners?
Warren: My last word is, “take full advantage of the Opportunity Zone.” Get in contact with us. We have plenty of funds. We're looking to partner with individuals who have the knowledge. I've got access to the capital. Let's grow this country and make our country the best we can be. And, let's do great things together.
Jack: Alright, so how do folks get ahold of you if they're interested and want to talk to you about investing in them?
Warren: We definitely can be a start. We are here in Atlanta. Our phone number is (404) 748-8489 and of course we're on Eastern Standard Time. You can call us directly, and we'll, we'll definitely direct you where you need to go.
Jack: Alright, very good. And I want to remind our listeners that the contact information for Warren Collier and the Black Wealth Group is going to be available on the podcast website.
I want to thank you, Warren, for being with us today. On behalf of Warren Collier, I am Jack Heald for the OZExpo podcast. Thanks for listening. Please go ahead and subscribe. You always get updated when we have new episodes. Those come out all the time and we will talk to you next time.
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