by Charlene Rhinehart

HBCU grads, Carrington M. Carter and Calvin J. Butts, Jr. of East Chop Capital,  are changing the face of private equity.

The two Hampton graduates recently announced the closing of their $4 million fund. With a strong background in real estate and entrepreneurship, Carter and Butts are capitalizing on the multi-billion dollar global vacation rental market.

“Our firm was created to help accredited investors build wealth and gain exposure to private investments that they may not have access to,” says Butts, Jr. in a statement. “East Chop Capital’s first fund exposes our investors to the travel and hospitality industry via luxury vacation rental homes, by owning and operating homes in places like Martha’s Vineyard, Hilton Head, Gatlinburg, Orlando, and several other markets that we will expand to in 2021.”

From Customer to Investor

Getaway Society, a luxury rental home business, was founded in September 2018. The idea was born after Carter embarked upon a series of trips to the Pocono Mountains to go skiing. When it was time for Carter to plan the trip, he had an aha moment that expanded his vision of what was possible in real estate.

“I realized the financial viability of being in the vacation rental home space,” says Carter. “I was enjoying the experience as a guest and traveler. But after having invested in a lot of real estate in different markets, I decided that getting into the vacation rental space would be an evolution of the prior real estate investing I had done.”

Carter adds, “I jumped in headfirst. I reached out to Calvin who I connected with at an alumni conference. We had a similar passion for real estate and building wealth so we joined forces. We built our first vacation rental home from the ground up in the Pocono Mountains. ”

This one idea helped them expand their real estate portfolio to $10 million in just five years. The additional $4 million raised will allow them to double the value of their portfolio over the next six months.

Expanding Opportunities

The HBCU grads want to expose more Black people to opportunities in real estate. Studies have shown that Black founders receive less than 2% of funding from investors to scale their businesses. Carter and Butts are on a mission to change those statistics through Eash Chop Capital. So far, they’ve collaborated with nearly 50 Black investors to help grow Getaway Society.

“What keeps me going is knowing that we are educating people and giving them confidence,” says Butts, Jr. “We are giving people the ability to do more. Many of our investors are in their corporate career working hard. We are giving them something else to be excited about.”

Butts, Jr. adds, “This investment vehicle has allowed folks to integrate their vacation, holiday trips, and time with family. We have investors who book the homes and go on corporate retreats with their colleagues. It feels good to see people engaging and having something exciting to talk about during this time.“

HBCU Grads Are Closing the Gap

Through the launch of their separate private equity firm East Chop Capital fund, the HBCU grads are closing the wealth gap. They are leveraging private equity to grow Black-owned businesses and generate returns for investors.

“There are corporate executives and middle managers who meet the financial qualifications and criteria for being accredited investors. But they are unaware that they qualify and what that means. Being an accredited investor allows you to make private investments in different companies,” says Carter. “We need to increase awareness and education.”

Carter adds, “We need to become better at evaluating business ideas and risk. A lot of us are afraid. We like to maintain the status quo. So we keep the money that we do have in ultra-conservative investments. Sometimes that’s good and it plays a role in our portfolio but it’s certainly not going to give us the returns that we need to close the wealth gap.”

Words of Wisdom from Two Successful HBCU Grads

Carter and Butts, Jr. started their vacation rental home journey in their 30s. But these two wealth-builders have decades of experiences under their belt that will help others achieve success. 

Carter took advantage of this opportunity at the age of 30 and urges others to think beyond their comfort zone. “Stop being scared. Get a little bit more aggressive with your decisions and investing…especially when you are young,” says Carter. “There are people in their 20s, 30s, and maybe even 40s who are just investing way too safe. I’m not saying to be reckless. But we have to be a little more aggressive now. When you get older, you will have plenty of time to be more conservative.”

Butts, Jr. believes that the normal conversations that people have need to be more intentional. “When it comes to things that really matter and contribute to our generational wealth, we don’t share or talk about it,” says Butts, Jr. “I have a group of friends from Hampton, and we read each other’s offer letters and talked about negotiating. That helped us elevate our corporate careers earlier on. If folks can take time and tell others what they are involved in, that may spark some inspiration for folks to go down that path as well.”