Sustainable and eco-friendly housing solutions are in increasingly high demand. With many options now making their way to the housing market. On this week’s episode of The Playbook, host Mark Collier, business consultant for the UGA Small Business Development Center, is joined by Majesty Gayle, an emerging leader in both the sustainable and eco-friendly housing development space. Gayle and his wife Elize, are the founders of Evo Group Holdings and Evo Opportunity Zone Fund. Both companies are making significant strides in the Atlanta market with their eyes on a national expansion.
Transcription:
Mark Collier:
Welcome into The Playbook on ASBN, Majesty.
Majesty Gayle:
Thank you for having me.
Mark Collier:
All right, man. Listen, sustainable housing, eco-friendly housing, right up my alley, man. I’m a big environmentalist. So what you’re doing is a big deal in my opinion. So let’s talk about kind of the genesis and how you got started, man. How did you start your career in real estate and kind of what inspired you to launch Evo Group Holdings?
Majesty Gayle:
I actually came out of the financial sector at that time, I had a business in that sector. Had some regulations things come up, it was with FinTech. Decided to go into real estate by way of a mentor that did really well. And he wanted to expand to the Atlanta area and asked me to pretty much quarterback the whole thing. We started out with a lot of acquisitions for larger firms, larger funds or whatnot. And we learned a lot about being boots to the ground, about getting deals done, about making sure that they’re win-win deals as well. So yeah, we on the road and acquired over hundreds of properties for these organizations. And that’s kind of how I got started in real estate.
Majesty Gayle:
And it was all specific in the low income areas of metropolitan Atlanta. So we learned a lot about the community and everything like that. And after a while, after we had some relative success, we decided to go off on our own with the focus of making sure that we beautify the communities that need the most assistance. But also making sure that those structures would be for the people in the community as opposed to pushing them out. So that was always our mission.
Mark Collier:
All right. So tell me about your company’s commitment to sustainability and green building. Because I know that’s a big core values for your company. Tell me more about that.
Majesty Gayle:
And we’re very committed. I’m committed so much that I went myself and got credentialed with LEED which is the Leadership in Energy and Environmental Design to get a better understanding of what it means to be eco-friendly and what it means to be green, to make sure that we incorporate those principles. That’s very important to us. And we want to make sure that we offer these types of concepts to not only the high end buyers, but also to everyone that’s buying, they deserve to have the same benefits in their households. So that’s how our focus has been on the energy portion right now because that’s the biggest contributor to what we’re dealing with with the climate crisis. And that’s why we utilize the renewable energy systems and recycled materials and things like that right now. But we’re working towards a net zero within about 10 years is our goal is to be able for our product to be net zero. So we’ll continue innovating in that space. But right now we’re focused on the energy consumption and energy production aspect.
Mark Collier:
So one of the buzzwords today, man, opportunity zones, you hear a lot about them, man. Investors talk about them, municipalities talk about them. Why does your company Evo Group Holdings choose to focus its operations in opportunity zones?
Majesty Gayle:
It’s so funny because opportunity zones are typically low income in areas in cities or in rural areas, right? So we’ve been operating in opportunity zones long before we even knew what an opportunity zone was. So we’re already familiar with these… These are the same communities that we were in. So we thought it was an amazing benefit for us to be able to add on to our offerings. So that kind of is what differentiates us from most people operating in opportunity zones, they are now trying to find their way into these communities. Whereas we’ve been in these communities, we’ve operated. We also bring resources to these communities. So we have relationships with these communities already. So I would say that the opportunities on legislation actually came after we were already there, but the tax benefits that it offers are amazing. And I’m looking forward to see what the program does for these areas.
Mark Collier:
Okay. So can you expound on how building property and opportunity zones is beneficial for the community? I mean, you guys, you told me a little earlier, you guys are an early adopter. You’re doing community development before it became en vogue. So you kind of have a headstart in that area. So how is it beneficial for the community in terms of that?
Majesty Gayle:
It’s beneficial in many ways, but a few ways that I’ve seen it’d be the most beneficial, one is jobs. You typically end up hiring close to the area. Two is just the beautification of the environment is very important for, I don’t want to get too deep but for mindset. When you’re seeing graffiti and a vacant lot and a condemned building that does something for the psyche. So it’s nice to beautify these areas. And then we see the community become uplifted from… It’s that simple, just change the building, change the landscape, and you just see the improvements in the area. And also, it spurs economic activity. You’re going to bring a lot more activity to the area. And that’s our goal. We’re already getting a lot of interest in areas that typically don’t have interests. So we love that and that helps the businesses and everything around. So it’s just to spur up economic activity and just overall growth in general.
Mark Collier:
All right. Let’s shift gears for a minute, Evo Group Holdings. And you also have started now an Evo Group Opportunity Zone Fund.
Majesty Gayle:
Yes, sir.
Mark Collier:
So tell me a little bit about that fund and tell me how your opportunity zone fund is different than what other OZ funds currently are out here offering.
Majesty Gayle:
Okay, well, Evo Opportunity Fund officially launched the end of March of this year. So it was still pretty early on, still raising capital as well. We have successfully filed a form D so we’re approved with the SCC. So I’m very happy about that. But the fund was created essentially to scale what we were already doing as far as producing supply in these low income areas. At the moment we are utilizing recycled storage containers as building materials, and we’re also incorporating the solar energy systems as well. So this fund literally is the financing arm for these projects to scale nationwide. So our goal is just to pretty much mimic what we’re doing here, nationwide and have maximum impact.
Mark Collier:
Very good. So in terms of investors, obviously opportunity zones, they attract investors for the tax benefit reasons that you gathered. So what type or investor is a good fit for you and how much are you planning on raising, how much you’ve raised currently and what’s your goal raise?
Majesty Gayle:
Well, the investor profile is actually, there’s a few categories we’ve seen personally that have expressed interest. One is the individual private investor that has typical capital gains from some type of sale, maybe crypto, maybe real estate. And they’re looking to not only get the tax benefits, but do something good with the money. We also get interests from large institutions as well, which is interesting. Pensions mostly, endowments. Yeah. So I think that they’re more interested in the social aspects of what we’re doing. And also, the housing aspect. We’ve currently raised $750,000 of a $2.5 million seed round. And the entire fund is the maximum is 250 million. So we expect to raise that out over the next six to seven years with some of these larger partners that we’re currently having conversations with.
Mark Collier:
What key benefits do investors receive within the Evo Opportunity Fund? We’ve touched on a couple of them, but perhaps you want to detail a few more for me.
Majesty Gayle:
Yes, sir. Yes, sir. Well, the profitability of the projects is why we are here. So at the end of the day, we have target IRR of 20%, which we typically exceed on our projects. And most of our projects also return to 60% cash on cash return. So the projects are profitable. The market is very hot. The interest is there, the demand is there. Outside of that, also the tax benefits, I believe from this program are unmatched. In the sense that you are taxed 0% on the appreciation. So that’s amazing to me in it of itself and also the reduction of your capital gains and then the deferral. So there’s a lot of… It’s just a win-win situation all around for investors.
Mark Collier:
Makes sense. So, accredited investors typically are the ones who are the low hanging fruit. But what if someone is not an accredited investor, but wants to be involved in kind of helping Evo Group Holdings and investing in those sustainable projects. Your nonprofit organization, I know you’ve got a nonprofit arm as well. Are they accepting grants and donations for such efforts?
Majesty Gayle:
Yes, sir. Yes, sir. If you aren’t an accredited investor, you can still partner with us in many ways. Like you say, with that non-profit. We do accept grants, or we do receive grants and also donations. So that’s a way to work with us. And if you have any skills or any skill sets, or you offer any services that make sense for the construction industry, then we would definitely love to work with you in that way, but there’s a lot of ways to contribute.
Mark Collier:
Okay, Well, fantastic. Majesty Gayle, Evo Group Holdings and Evo Group Opportunity Fund. I want to thank you for taking the time out of your busy day to come in and kind of detailed some of the great plans you’ve got for your operation. I see great things in your future young man and I’m happy to hear more about it. Like you to come back in and tell us more about your progress.
Majesty Gayle:
Yes, sir. I appreciate you having me. Thank you.
Mark Collier:
All right.
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