Terrica Lynn Smith grew up broke and homeless on the streets of New Orleans. But now, she is developing new affordable housing in an Opportunity Zone in Lafayette, Louisiana.

Terrica is managing partner of SALT Capital Equity Group, real estate developer of Madeline Cove, a housing development located in an Opportunity Zone on the north side of Lafayette, Louisiana.

Click the play button above to listen to my conversation with Terrica.

Episode Highlights

• How Terrica’s promise to her son catalyzed a transformation in her life, eventually leading her to where she is today.
• Why Terrica reconsidered her initial skeptical stance on Opportunity Zones after educating herself and coming to the realization that OZs can be a powerful tool to revitalize a community.
• The challenge of talking to investors about Opportunity Zone investing in downtrodden neighborhoods.
• How the mainstream media initially did a poor job of reporting on the Opportunity Zone initiative.
• How Opportunity Zone development can serve as a catalyst for economic activity across a wider region.

Featured on This Episode

• Terrica Lynn Smith on LinkedIn
• SALT Capital Equity Group
• Madeline Cove
• Opportunity Zones in Lafayette, LA
• Adjudicated Property
• White House Opportunity Zone Conference
• Scott Turner on the Opportunity Zones Podcast
• Acadiana Planning Commission
• Chad LaComb on the Opportunity Zones Podcast

Industry Spotlight: SALT Capital Equity Group

SALT Capital is a membership-based equity group focused on helping investors build generational wealth through sustainable and transparent real estate investments. They broker investor-to-investor transactions, whereby investors from all backgrounds and income levels can pool their resources together to gain direct access to a larger pool of real estate investment opportunities. They are currently sponsoring Madeline Cove, a mixed-use Opportunity Zone development in Lafayette, Louisiana, located on Madeline Avenue within what is known locally as “University Corridor.”

Learn More About SALT Cap and Madeline Cove:

• Visit SALTCapEquityGroup.com
• Visit MadelineCove.com

About the Opportunity Zones Podcast

Hosted by OpportunityDb.com founder Jimmy Atkinson, the Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.

• Subscribe on Apple Podcasts
• Subscribe on Spotify
• Subscribe on Google Play

Show Transcript

Jimmy: Welcome to the Opportunity Zones Podcast. I’m your host, Jimmy Atkinson. Terrica Lynn Smith is owner and real estate broker at Cachet Real Estate and managing partner of Salt Capital Equity Group, which is currently developing Madeline Cove, a housing development located in an opportunity zone on the north side of Lafayette, Louisiana. Terrica, thanks for joining the show today. Welcome.

Terrica: Hey, Jimmy. Thanks so much for having me. I’m super excited to be on the show today.

Jimmy: Yeah. Glad to have you here. And you know, we were talking a little bit before we hit the record button about how you’re a lot different than a lot of the other guests that I typically have on the show today. You know, you’re not another middle-aged white dude, pardon the expression, but that does seem to be the dominant type of person who works in this industry. So happy to get the story from someone else’s perspective today. So Terrica, you have a very interesting background. You grew up a foster child, you aged out of the system at the age of 16, and you ended up homeless and broke on the streets of New Orleans for a time and during your childhood years. Could you spend a few minutes telling us about your background and how you got to where you are today?

Terrica: Absolutely. So like most foster children, you know, you end up in a system for a reason. And so for me at the age of 5 years old, my mother gave me over to her drug dealer just to settle a debt. And I experienced a lot of dark moments at that time in my life because at the age of 5, my innocence was taken and I literally hated everybody and anyone inside this world. And I found myself, you know, going from home to home, and then eventually the foster care system stepped in and they took me and my siblings from out of the custody of our family. And then they placed us in different group homes throughout the state of Louisiana.

And throughout my time in foster care, which I spent more than 10 years in foster care, but throughout my time in foster care, one of the biggest things that they would tell you was that, you know, more than 60% of foster care usually end up homeless, pregnant by the age of 16, and they’re a high school dropout, and they end up repeating the same patterns as their parents. So I would say there were a lot of people who didn’t believe that I would probably be the person that I am today just based off of those statistics because like you’ve mentioned, I was homeless in New Orleans.

I lived up under the Claiborne Bridge, but not only was I homeless, I had a baby by that time. And me and my son, you know, literally slept up under that bridge. And that was the time, Jimmy, my life changed because I wanted to do better for him. I made him a promise up under that bridge that as long as I had air in my lungs, I will be the best mother I can possibly be for him. I don’t care what I have to face in this world, I don’t care what I have to go through, like he would never experience homelessness again.

I had to deal with the fact that I was running from my childhood. I was running from the hurts and pains, the abandonment, the failures, the abuse that I experienced as a child. And by the time I ended up homeless, I realized I needed to forgive my mother in order for me to be a good mother to my son and to be able to move forward in my life. And so I decided that I was going to forgive her because it was hurting me. I wouldn’t allow nobody to get close to me. You know, I was a very angry individual, no foster homes wanted me. I got kicked out of all the group homes.

So it was a life where I literally felt like I was all alone by myself. So that promise up under that bridge is literally what has gotten me to where I’m at today, you know, remembering that look in my son as I’m broken up under that bridge. You know, that was all the motivation that I needed to know that I’m not going to remain here. Although I’m homeless right now, like, this is not my reality. I can change this because I didn’t look like the average homeless person that was literally up under that bridge. I knew something was different about me. I just needed to believe it for myself.

I needed to be able to forgive and I needed to be able to move forward. And so I eventually got an apartment with my son. We ended up still in New Orleans and then Hurricane Katrina happened. And by the time Hurricane Katrina happened, Jimmy, I had two kids. So now I had 2 kids by the age of 19. I’m a single mom. I had a boyfriend at the time who wasn’t my children’s father but you can about imagine being trapped in the city for three days, not having no food, no water, you know, nobody could get to us.

I was like, “Lord, if you get me out of this situation, I would do whatever I have to do not to rely on the government again. Like I won’t take another welfare check. I won’t take no more food stamps. Like I don’t want nothing from the government. I just want to be able to leave any place the next time a hurricane comes.” Because Hurricane Katrina was a nightmare. The experience of death and the fires and the military, it was a nightmare. I thought it was the end of the world.

So we relocated to Lafayette, Louisiana after my boyfriend was looking for his mother. We found them in Lafayette. And so when I got to Lafayette in 2005 shortly after Hurricane Katrina, I went to real estate school in 2006. Now, Jimmy, if you can about imagine, okay, I have no real estate knowledge, okay? I’ve been in foster care all my life. Nobody I’ve ever been around has ever talked about mortgages or liens or encumbrances. I had no type of real estate background. And so I’m literally the dumbest person in the classroom.

And every time the teacher say, you know, one or two words, I’m raising my hand because honestly just did not understand exactly what he was talking about. And I went on to take my real estate exam. I failed it not once, not twice, but seven times. Like devastating, right? And most kids would be like, “Well, yo, why you don’t give up? Like, you don’t even have $100 to keep on paying these people to keep taking they test. Like the test is not for you.” I’m like, “Look, I already know what it’s like to be poor. I know what it’s like to be homeless. I already know what is in store for me if I don’t do this. So I have to do this. I have no other choice. I have no other option. If I have to find a way to get $100 every single time I will take a test, I’m going to find a way to do it.”

And eventually, after the seventh time, I ended up passing my real estate exams, and then that’s how I ended up getting into real estate.

Jimmy: Well, that’s an incredible story of you overcoming the odds, for sure. And that sounds like quite the transformational moment that you had under the bridge with your son at a young age when you made that promise to him. I think that sounds like that kind of catalyzed, a turning point in your life, where you were able to really take charge and put the anger away and work on moving forward. So you eventually did, after failing seven times, get your real estate license and that led you to where you are today. You know, over the course of the next I guess it was about 10 years or maybe a little bit less after that, you started working at your current place, Cachet Real Estate.

Terrica: Yeah. In 2012. So after being in real estate a few years… Well, let me just say this, getting started in real estate, once you get the license, that’s not the end of it, right? And so for those people that are listening, that’s like, they think it’s going to be so much easier when you get the piece of paper, they’re wrong because that’s when the real work starts. And that’s when you have to remain strong and understand why you’re doing this and remembering why you’re doing this. So I literally had no connections in real estate, Jimmy.

I literally had to go door to door knocking because nobody would give me a chance and opportunity. And so finally, once I started meeting people, then one person knows another person that knows another person. And people with money, usually know more people with money. And I figured that out early on in my real estate career, and I knew that I needed a niche, I needed something that was different than all of your normal, traditional real estate agents, so I was like, “You know what? I’m going to be an investor specialist.”

If I can find investors rental properties, and rehabbed properties, and commercial properties, and help them transform these properties into income-producing properties, and help them create income, then that’ll be a really great vehicle for me to be able to use real estate because at the time nobody was really focusing on investors. Everybody was focusing on home sellers and home buyers. And so creating that lane for me put me in a category all by myself. So in 2012, I went on to open up Cachet Real Estate, which was at the time I was the youngest African-American female broker with a diverse company here in Lafayette, Louisiana, which is huge because you don’t really open up real estate brokerages at 22 years old. But I was able to open up Cachet Real Estate.

We grew that company. We started generating about $30 million a year in sales. And over the course of my career, I did over $300 million-plus in real estate transactions. And so it brings me to Madeline Cove, the actual community that we’re developing in the opportunity zone. When I had first got licensed in real estate, remember I told you I was door-knocking, going door to door. Well, I was also willing to do any and every open house that realtors had so I can be able to generate business.

Well, during that time, they were developing this subdivision back in 2007 or ’08 or something like that, it was around that time, and I was so excited because they were going to use me to be the face of the community because I look like the people in the community, I can relate to the people in the community. So it was going to be a huge opportunity for me in my career. And then the partnership with these two investors went bad and eventually, that subdivision sat there for 10 years, 10 years, nothing. Like they used it as a trash vehicle. People would go dump trash. I mean, all types of stuff was on this property but it was already a subdivision that was developed.

It had the infrastructure, it had the roads, the lights, the lots, the place…it had everything. It just needed somebody to come and believe in it. And so back when I first found out about opportunity zones in 2019…well, actually I found out late 2018 but in 2019 I really started doing like research to see like really what this was about because a lot of people were afraid that this was going to be the new vehicle that people used to create gentrification in communities. So obviously I am against that. So I wanted to be very knowledgeable about this resource that was being used by a lot of investors.

Initially, when I was looking up opportunity zones, Jimmy, it was not for me to be able to create one. It was for me to be able to combat it and be like, “Why am I against this?” But once I realized that this is an opportunity for areas that haven’t received investment dollars in decades and decades, I was like, “Yo, this can be a life-changer. Like people’s lives can be changed if you do the right thing with this type of investment.” So I remember Madeline Cove back from my early days in real estate. I knew it was a subdivision that was abandoned.

And so I went and looked it up to see if it was located in the opportunity zone and it was smack dead in the middle of it. And I was like, “All right, this must be a sign.” So I’ve already worked with investors, you know, already knew about this property. And so I thought that this was going to be easy. Like I thought it was going to be easy-peasy, like no problem. Well, it’s not as easy as I thought because I literally went through more than 100 investors trying to convince them, number one, what an opportunity zone is, why it’s important, and how they can actually change the trajectory of what goes on in these communities, you know, by investing into them.

So investors were like, “Look, I don’t want to do no high-risk investment in the neighborhood that is filled with crime,” or whatever the case may be, rural or whatever, right? So I literally had to fight through that, Jimmy. I had to fight through all of those nos to be able to get to the amount of yeses we needed to be able to get this project started and going. And not just that, opportunity zones, I feel it’s such an important vehicle because you have some financial institutions that still do redline even though they don’t publicly say they’re redlining, right? And so this was a property where no bank wanted to touch it for no particular reason other than they don’t think that it would be a good investment.

Jimmy: Well, a lot to unpack there. Going through a hundred investors who said no before you started getting enough yeses to get this thing off the ground, that’s impressive. The opportunity zone investing, it’s not for everyone. You know, it does require a special investor. One, there is a lot of education that you have to go through with the investors upfront because this is such a new program, only passed in late 2017, and the funds and the projects weren’t really started getting developed until middle of 2018 after all the zones were certified.

I know I’ve been saying this a lot on this podcast over the past couple of years, but we’re still kind of in the early days, even though it’s, you know, getting toward a second quarter. I guess we are in the second quarter now of 2021 with still about 5 years to go before the clock runs out on the program. But still, a lot of investors out there who could be a good candidate for an opportunity zone investment aren’t aware of the program. Education is still a large part of getting investors or potential investors over that hump. And then, you know, they also have to be comfortable with the area that you’re investing in and they also have to have a capital gain to defer.

So, you know, the investors have to tick a lot of boxes before they’re ready to become an opportunity zone investor. So Madeline, correct me if I’m wrong, but it sounds like when you first heard about opportunity zones, you were bearish on the program. There were some things about the program you didn’t like. What changed your mind? What caused you to reconsider opportunity zones as being a really good tool for treating the type of impact that you’re looking to create?

Terrica: Education, right? You know, if you go for what the main media is speaking of, you’re liable to miss a lot of important details. So versus me believing all of the conversations that was going on around me about this is the new vehicle for gentrification, like they’re going to come in these low-income communities, they’re going to build these mega properties, and they’re going to force all of the people that’s been residing in these communities for years and years to be relocated somewhere else. And I have an issue with that.

And so I needed to be able to understand something if I was going to have to stand up against it. That make sense? Like I can’t stand up against something I don’t know, Jimmy. So I had to educate myself. And once I started educating myself, I’m like, “Wait, hold up. This is like really any type of investment. It’s really the person who’s behind it that’s going to be making the right decision and/or the wrong decision.” So it’s not saying that the government created this to start gentrification in communities.

They’re saying, “Look, we are looking to bring these communities back into commerce. We’re looking to bring in businesses that have incentives to want to be inside of a particular area of town,” right? Because without this, I’ll tell you I’m like fighting a food desert and healthcare desert in the area that I’m literally developing this community in. And so whenever you have large parcels of land and you have different opportunities, then you’re able to bring in more resources. But not just that, they are incentivized to want to do business in these areas now versus, you know, them receiving your standard tax credits and going to another part of town.

And so me understanding that I literally would be able to be like a shining light, if you will, in a community that’s been dark for so long, and being able to shine the light on it…I mean, Madeline Cove has gotten global attention from Africa, from Germany. Like people all over the world have heard the story of Madeline Cove, and I honestly believe it’s because of the efforts that we put into it and the people that’s behind it, that’s driving it forward, and that our intentions are not to move people out of that community, but to cater to the important needs of that community.

Meaning, for instance, the average home sale here in Lafayette, Louisiana is $200,000. Well, nobody on the north side of town who’s making anywhere from $15,000 to $25,000 a year would ever be able to afford a home. So now what we’re able to do is we’re able to build affordable homes without using subsidized from the government. Let me make that very clear. This is affordable without subsidize. We’re literally building these homes in this community where it is affordable for the majority that lives on this side of town.

We’re not throwing no crap together. We’re building these homes nice. We’re using local builders and local community partners to be able to get these homes where people have something that they can be proud of in their community, and they don’t have to leave their community to be a part of it.

Jimmy: That’s awesome. That’s great what you’re doing up there. I want to get back to what you said about what caused you to change your mind on the opportunity zones program. You know, at first, you were kind of reading into the mainstream media narrative. And I think that the mainstream media, particularly “The New York Times” and a few other outlets, did their readers a huge disservice by painting an overly negative picture of opportunity zones when the program first got launched in 2018.

I thought the coverage was very one-sided against opportunity zones. And they really didn’t tell the whole picture at the outset. This is not to say that I think opportunity zones are a perfect program. They certainly are not, you know. The opportunity zones initiative does have its own set of challenges and its own set of problems but I think, by and large, it’s creating a lot of good and, Terrica, I’m really glad that you’ve come on to our side of the fence, so to speak, and are using it as the tool as it’s meant to be used.

So tell me a little bit more about the Madeline Cove project. You’ve gone into some detail on it but I’m curious to hear, you know, how many houses are you building? How many residents are gonna live there once the development is complete? And if you have any projections on returns and how much you’re raising, you know, tell us a little bit more of the numbers behind the project, if you could.

Terrica: Absolutely. So let me just start with this part with Madeline Cove, right? Madeline Cove was adjudicated property that we were able to acquire at a phenomenal price. So when normal people pay to get the neighborhoods developed, we paid nowhere near close to that amount. So for us, we already have a low entry point going into this investment because of the simple fact that it was already adjudicated property. And for those who don’t know what adjudicated means, it is usually when someone is behind on their taxes and they have not paid. And the property goes through the sheriff’s sale process. And then the city becomes the owner of the property due to the delinquent taxes.

So we were able to create a resolution here in the city of Lafayette that allowed us to be able to acquire this property for pennies on the dollar. And then we replanted it to be an entire community. So when I say community, I’m not just talking about a neighborhood, Jimmy. I’m talking about 21 single family residence. We’re going to have 68 townhome residence. We’re going to have a 15-unit apartment complex. And we got more than 10,000 square foot of commercial development that’s taking place in Madeline Cove, where we’re going to be partnering with local grocery stores and coffee shops.

Things that can be very educational to the community and not, you know, the custom things that you see in these types of communities. So like a gas station and a liquor store, we’re not going to have any of that. We have plenty of that already throughout the city. We are bringing in healthy food options in the community. We are bringing in ratings in the community, things that’s going to enrich the community. And so when I say we are developing an entire community, we are literally developing it.

And so Madeline Cove’s entire project is estimated to be right at about $15 million, $14 million, $15 million, the cool thing about Madeline Cove is that we had some investors who got in early on and believed in the vision. Like I said, we went through plenty of them that told us no. So right now we’re raising per phase. So right now we’re in phase one and we’ve raised literally…and when I say we’ve raised, we’ve put together right up under a half a million dollars in phase one. Phase one, still have about a million dollars left to be funded. And the estimated returns, which is not like guaranteed but estimated is anywhere from 20% to 25% return on investment. And that’s during that entire phase.

So phase one may be two years. So that’s pretty much how it’s broken up. And we have performers and more information for people that may be interested in partnering with us on Madeline Cove, and getting further information about it as well.

Jimmy: That’s good. Yeah. Just to be clear, it is a qualified opportunity fund that investors can come into.

Terrica: Yes. What we do is set up by our legal and it’s also operated and managed as well by our legal team.

Jimmy: Fantastic. And it’s interesting that you speak about how you’re not just building a housing development but you’re really catalyzing an entire community here. I think that’s one of the key takeaways of using opportunity zones as a tool is that it can really catalyze a lot of development in the area beyond just the single opportunity zone project. It can be a catalyst for change across a wider area. Don’t you think?

Terrica: Yes, absolutely. And I’ve had so many different municipalities reach out to us in regards to our work here with Madeline Cove that want us to come into their community. I’m talking from Texas, North Carolina, California, come into their communities and do exactly what we’re doing here in Lafayette, Louisiana. And all through, again, the opportunity zone initiative. Like that’s the biggest key to this is having this vehicle to be able to create the change like that in communities that need it the most. The other cool thing, Jimmy, that I didn’t mention was that you know how I made my son a promise up under that bridge.

Well, I literally named the street after him. That’s how, you know, life can completely change from having nothing and being poor to now your legacy lives on forever. Like my son name is going to be in this community forever

Jimmy: That’s really cool. Good for you. Good for your son. Being able to see that street sign with his name on it, that’s awesome. A little over a year ago, it was early 2020, President Trump and his team at the White House hosted a meeting on opportunity zones. And you were in attendance there, Terrica. Can you tell us a little bit about that experience and what were some of your key takeaways from that event?

Terrica: Oh, man, it was such an amazing experience. Let me just say I was honored to even be considered as a candidate to even go. But what I say is this, the people that were leading the opportunity zone initiative, Scott Turner, the whole, entire team are extremely passionate about making changes within the community. That was one of the biggest things that I took away was how much they love this initiative that they’re doing and how they truly believe that the lives are going to be changed.

The second thing that I took away was that the people that was in the room were not people there to create gentrification or anything like that. But you had medical professional people in that room that has businesses that are located within the opportunity zone that they’re looking for ways that they’re able to help and give back within the community. You know, you had real estate people, of course, in the room, you had grocery store owners and just different types of people that is passionate about this type of project.

And I would like to say shout out to APC, Acadiana Planning Commission, because they definitely do a good job at educating the local community here in Lafayette, Louisiana about opportunity zones. So like Chad LaComb and all of them that’s heavily involved with, you know, seeing this initiative out, you know, kudos to them. So again, like I said, that was a life-changing experience. Being able to see, you know, Scott Turner and the entire team at the White House speak so passionately about it, to speak on a project that’s taken place all around the world, to have Madeline Cove to be, you know, one of their top tier projects that they are extremely excited about and rooting it on, you know, it was just phenomenal.

Jimmy: That sounds like a great event to be at and some good takeaways there. I’ve had Chad LaComb from APC and Scott Turner formerly with the White House on the podcast before, and they’re both fantastic. And they are both great champions of the opportunity zones program. Well, Terrica, it’s been a pleasure speaking with you today. You’re a rockstar if I can say so. I think you’re doing a great job, especially given all the challenges that you were able to overcome from your childhood to get to where you are today and to be leading an opportunity zone development that’s very important to the north side of Lafayette, Louisiana to bring some affordable housing, or I should say housing that is affordable, just to be clear, that you’re not taking advantage of any of the affordable housing tax credits, and to bring some grocery to a food desert, I think it’s incredible what you’re doing up there and I wish you nothing but the best in terms of achieving what you want to achieve up there and being able to raise the capital that you need to make this vision a reality. Before we go, can you tell our listeners where they can go to learn more about you and Madeline Cove?

Terrica: Yes, absolutely. So if you want to find out more information about Madeline Cove, you can go to madelinecove.com. And you can fill out a request form. And then someone from my team would be able to reach back out to you immediately, and get you connected, and get you updated and, you know, answer any questions that you may have. So again, madelinecove.com.

Jimmy: Awesome. Thank you, Terrica. And for our listeners out there, as always, I will have show notes on the Opportunity Zones Database website for today’s episode. You can find those show notes at opportunitydb.com/podcast. And there you’ll find links to all of the resources that Terrica and I discussed on today’s show, and I’ll be sure to highlight Madeline Cove and have a link to their website, madelinecove.com as well. Terrica, again, thank you for joining me today. I appreciate it.

Terrica: Thank you for having me, Jimmy.