Episode 111 - Redemptive Real Estate with Jimmy Wright
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Jimmy Wright is co-founder and President of Launch Capital Partners, based in Louisville, Kentucky. Growing out of years of conversation about business, ministry, and the Christian life, Launch Capital was founded as a viable marketplace response to ministry opportunities presented by the global migration crisis. We talk to Jimmy about ways Christ-following investors can direct capital into the marketplace and work towards establishing redemptive real estate.
All opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guests may maintain positions in the companies and securities discussed. This podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization.
Episode Transcript
Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it.
John Coleman: All right. Welcome back to the Faith Driven Investor podcast. This is John Coleman. And today I am joined by a fantastic guest, Jimmy. Right. Jimmy is the president of Launch Capital Partners in Louisville, Kentucky. And he knows a wealth about investing, particularly about the idea of built communities and redemptive real estate and everything in between. So please join me in welcoming Jimmy to the show. Jimmy, how are you?
Jimmy Wright: Good, thanks, John. Glad to be here.
John Coleman: How are you up in Kentucky today? Is everything going well up there? You on the road?
Jimmy Wright: It's finally starting to break here. The weather is it's getting a little bit warmer. It did this to us last week. It does this this time of year is rough here in Kentucky. You get really hopeful and you get 70 and 80 degree days and then boom, you're back to forties again. But yeah.
John Coleman: I feel it. I think we're all anxious to get into spring and summer here. You know, Jimmy is we just dove in. You know, I've gotten to know a little bit about your background, but just for the benefit of folks here, tell us a little bit about yourself. Where are you from? How did you get into investing? What was your path to this point?
Jimmy Wright: Yeah, so I was born and raised here in Louisville, Kentucky, still live here in Louisville. My wife, Dana, and I've been married for 14 years. We have five kids in the house. They range from ages 11 down to five months old. Oh, wow. We're pretty busy at home. We just moved a little bit outside of Louisville to a little more rural community, which is fun to have bunch of dogs and cats and whatever the kids catch in the creek and the moved out to a little country church. So it's a lot of fun. Yeah, we're having a good time.
John Coleman: That's fantastic. And how did you get interested in real estate? Was this where you kind of entered or were you interested in the faith aspects of this previous to getting into real estate?
Jimmy Wright: Yeah, I mean, this is really it's really a story of God's providence all the way through because it's definitely not a planned past that I had really thankful for and glad to be here. But it wasn't my plan at all. So we started this journey about 12 years ago when I started really considering integrating faith and work together before I just I had the two separated and went to church and put on my work and went to work, but I went on a mission trip. Had two pretty important points during this time. I went on a mission trip to Indonesia and helped some missionaries there do some work on water. And while I was there, I noticed that I couldn't help them with language, I couldn't help them with anything, except I had project management experience and I was like, Well, you could do this or that in your business and I think improve it. And I think you could get more production and more clean water to people in the response that I got was, Yeah, that's great. We don't really need business improvement here. We just need and I'm like, Well, what do you need? And can you go back and just make money, give them assistance, and then and then we'll do the mission. They said it in a very kind way, but that's what I took from it. And even talking to some pastors, it's like, well, you know, like make all you can and then give, or which was just really, really unsatisfying because I didn't feel called to vocational ministry, but I was serious about my faith and learning more and wanting to apply it in every way that I could.
John Coleman: Yeah. And you know, what we hear commonly, Jimmy, around here is this separation of faith and work where people have work on one side and they think I'll just make a lot of money and then do philanthropic activity for the things I want to support or the churches I want to give to you. And that that activity is over here. And really, I think there's an emerging consensus among folks that it's really the integration of those two things. It's most powerful. You know, you mentioned your mentor talking you through that. What did that look like as you transition from the corporate world? There started to evaluate your position in the corporate world to this idea of potentially starting a new venture like Launch Capital Partners.
Jimmy Wright: I mean, Ross McGarry mentored me and he was really great about is a former pastor but also at work some in the business world. So he was able to kind of bridge that divide. And one thing that he just did really well was be able to speak into your business. So he had a pastor's heart and he had a heart to love the world and love neighbor and see that worked out everywhere in life, but had some of the acumen and some of the background to be able to speak in to broad categories in your work. This again was not planned, but I started into real estate by another guy that worked at the corporate America with me, and he said basically like, why don't we get into some real estate, be good for retirement? And that was the plan. That's how I got started into real estate.
John Coleman: And so this was entirely. Of a side hustle, so to speak, in modern terms. At the beginning where you had a job in corporate America, it sounds like project management and other things, and this was in a friend deciding real estate could be a really interesting path to secure retirement, to generate extra income.
Jimmy Wright: That's exactly what it was. So we listen to podcasts and learned real estate and then on the side nights and weekends, we would go and buy these houses and rehab them and refurbishing them and then put them in bank financing and put a tenant in. And we just we started cycling through that. And then at the same time, a co-founder of Lunch with me, him and I, our families, moved into the same neighborhood in Louisville. And that neighborhood was a historically refugee neighborhood of immigrant nutrition and really which was born out of both of our desires to do outreach. So we were just trying to do community outreach and looked around and noticed that all the nations were around us. So I got on the board of a local nonprofit. We did backyard bible clubs, we did an apartment complexes in the neighborhood, and then we also did homework help and some after school care for kids and just started working with and loving the refugee community. And out of that, Ben Hedrick is his name. Ben and I's relationship came word launches and it came about through really serving the refugee community and being an advocate for them.
John Coleman: And had that been a passion of yours forever, or was this something that you kind of moved to the neighborhood for that reason or it just kind of happened as you coincidentally moved in? Like where did that passion come from for you?
Jimmy Wright: We moved into the neighborhood because it was where you could get the most house for the money. Yeah. So my wife thought Spanish. She was involved in missions and had a heart for the nations. And I did too as well. So we had that bent a little bit, but we didn't really get involved until we found ourselves in the middle of it.
John Coleman: That's amazing. So you and Ben were building this business, flipping houses. How did that evolve from the two of you kind of rehabbing houses, putting in tenants to this idea of launch capital where you're starting to aggregate capital and it becomes more central to who you are. It's not just a side hustle anymore, but it becomes central to who you are.
Jimmy Wright: Yeah, great question. So we started we were rehabbing the houses. We started working with resettlement agencies to place tenants. And we thought about a business model that could really cater to the immigrant immigrant community. And as we were developing that, we just continued to grow. And God blessed it in several ways to where we were able to scale pretty quickly. We then brought on some private investors who came in and gave us financing. We then rehabbed and refinanced these properties out and managed them and scale it that way. And then really the turning point was we got a few tenants in. And so just how well the ministry aspect was going and I just decided that I want to do this full time. So I was saving up money for to launch out, so to speak, and go full time. And at the time my company was going to get bought. So I had a severance package that supposedly was in line for me. And what is happening was it never came through. We never got bought. So Oh wow. And in the meantime, my boss moved apartments and my job was on the innovation side and wasn't core and the company was cutting costs at the time. So what ended up happening was I got let go and rather than having six months of runway, I got let go. And they're like, your insurance ends tonight and see, wow. So we just prayed at that point and we're thinking like, what do we do? I want to pursue launch, but I have a growing family to provide for and didn't quite get my savings up to where I wanted to. So Dana and I just prayed and decided to just go for it. And when we did, literally, it was two weeks after we decided to go for it full time that some bigger investors came through. They're now partners and then a portfolio of about 150 units that needed a big rehab. And this was in 2016. So exactly the time where there was a big refugee rush, all that came through at exactly the same time to where I could pay myself as a general contractor and have a job and get going. So it's yeah, it's really amazing how it all came through.
John Coleman: It's amazing how providential that process is sometimes. You know, we've heard versions of this. I have a version of this myself where. Crying situation turns into the thing that helps you to catalyze, to move into something that really is a calling for you and that ignites you. And at the time, it can feel hard. But I think looking back, you often see the providence in that and see the word you're getting from God about what you're intended to be doing.
Jimmy Wright: We never would have been able to buy that property, and I may never have been able to even go full time had that not happen.
John Coleman: And talk to us about. So this started as a thing where it sounds like you were doing standard real estate by house for a good price rehab it get a tenant and launch has really transitioned into something that's deeply spiritually integrated or that incorporates a lot of meaning and value into what it's doing with communities. How did that arise? It sounds like partially organically, and what does that look like now for many of our listeners, this idea of redemptive real estate or communities is new. So talk to us about what that looks like for y'all and how that came about.
Jimmy Wright: Yeah, so we had planned to do it from the beginning. We wanted spiritual impact baked into what we did. So traditional property management tends to automate, tends to distance itself from the tenant, all in the name of efficiencies. So what we were doing is the opposite of that. So we went backwards in time and hired resident managers. So we have one resident manager onsite for every 50 units that we are interesting and 1400 units right now. So these families live on site and they're like the old building supers. So if a tenant needs anything, they have a door to knock on, which is really helpful with language and cross-cultural dynamics. So they come to the door. These are often families that are connected to local churches. Some of them have been overseas. Some of them want to go overseas. And we have many that are now overseas and they yeah, they just care for the tenant and they can't care for 50 other families like one family can't obviously care for 50 others. So the nonprofit that we initially volunteered with, we now have a deep connection to and we've helped them to expand out to work with 50 different churches here in Louisville. So we have volunteers come in and they're connected to our resident managers and they deal with some of the overflow of needs that come through. So the nonprofit will do homework help. They have a ladies tea. They have on after school care, some ESL programs and different programs on site. And since we don't need the office space because we have resident managers, we use that office spaces, community centers that the churches do program out of.
John Coleman: So that's a core model. You basically set up and align Capital Partner or partners with a nonprofit that's dedicated to impact in the community with a residential model and people on site who are dedicated to the health and well-being of the residents. And it's at the center of those things. You can really enable this model that's meaningfully different than others that you'd find in these communities.
Jimmy Wright: I imagine it is, yeah. It's highly relational, highly impactful and really focuses a lot around building the community.
John Coleman: Was there ever a concern? I can imagine that one of the reasons people have automated is cost, right? Is making the financial model work. How did she think about the business model underlying this impactful group that you've set up and were you ultimately able to reconcile the idea that this could actually be a better investment as well as the right thing to do?
Jimmy Wright: Yeah. So normally on apartment complexes of the size that we buy, there's a leasing agent on site and a property manager on site. And what we've done, the math kind of works out to where if you divide the leasing agent out for 50 units, then that pays for the resident managers and then the rest of the property management staff. We have a central back office and we have centralized maintenance. So the resident managers aren't typically doing maintenance activities, they're doing leasing it like property management. It's whatever they call it. So economically it's neutral on the cost side. But as far as the model, typically our tenants stay about twice as long as national average. So the turnover rate is about 45%. We're at about 22% on our stabilized. Wow. So part of that is the community development and the word of mouth advertising that happens. So once you go into a community and start to improve it, word travels and then good tenants refer other good tenants and you get a. Virtuous cycle there. So we've shared a lot of meals together. We've shared stories with each other of different heartaches. We we've walked together to life. We have Yusef, who's a Syrian, with him and his family, still connected closely with, and he makes waffles every Monday. It's the best waffle round. And so you can go over every Monday news that will be out there frying this waffle. We have Elizabeth from the Congo who arrested me and your family arrested very deeply with she's now a member in our church. So we see her here for her regularly. There's so many stories of the resident managers stepping into people's lives in really extraordinary ways. As a hunter, for example, is a resident manager and apartment complex. It's primarily Cubans and an elderly Cuban gentleman who he built relationship with ended up being taken to the hospital. It's very, very serious for him. And so he called for his property manager to in his deathbed. And he wants to see his property manager. He's he's known for several months. And it's just a beautiful example of these people living out there. Common.
John Coleman: That's awesome. And it's such a great representation of the church as well. You know, the real church, the global church, the body of Christ, where it is every single person on this planet, you know, from different backgrounds, with different experiences. And I think it's so easy living in any community to get in a bubble of your community right here in my little part of Atlanta or in your little part of Kentucky. And yet because you're able to live in these diverse communities with people relocating, dislocated from their places of origin and united only in this common experience or hopefully in their dedication to faith that you get such a cross-section of the world right. And of what the body of Christ can look like. How have your kids responded to that? I can imagine. It's been an amazing experience.
Jimmy Wright: Yes, they've loved it. My oldest is 12, so it's 12 down to five months. I don't think they quite appreciate it as much as they will, I think, in the future. But yeah, they have friends from many different cultures and hear different languages all the time and are asking their friends questions about their home, where they're from, and yet they love it. And as parents, we're really glad to give them that experience and exposure that normally you pay thousands of dollars for, go overseas, but the nations are coming here and we as a church have to learn how to receive them.
John Coleman: That's awesome. As I think through what you're describing, I also think, wow, you're just so invested in these communities. You have such a dedication to them. At the same time, you're trying to build a business, right? A commercially viable business. Do you find there's ever a tension there between the kind of care that you have for these communities and making this business economically sustainable and successful?
Jimmy Wright: Yeah, sometimes there is a tension. We have been really fortunate to be able to find property that we can preserve affordability and also have some quality to the housing. And we have a dedicated maintenance staff that's really experienced and goes above and beyond to give tenants a good quality property. There are and we try to have we have as much grace as we can. There's tension sometimes with a tenant doesn't pay, then creates conflict and difficulty. Fortunately, there are actually the refugees. Immigrants are really committed to paying rent.
John Coleman: Yeah, I mean, that's fascinating that I would have thought that refugee communities would actually have greater problems as tenants with delinquency, with financial troubles, with stability. And yet part of your model seems to be that those folks are actually really great tenants, that they're thoughtful, that they pay on time that's stable. Talk more about that. What makes these communities such good tenants and how does that feed into the model?
Jimmy Wright: Yeah, so the model works great with immigrants and refugees because what they're missing is that cross-cultural peace. And a lot of times there's misunderstandings and inability to communicate. They cause tensions and it's not a lack of willingness to pay. And think about these people have come over from. Many of them have lived in tents or in conditions. And the first thing they're going to pay this is the roof over their head. They're really committed and family oriented. So they pay well. They are also are great workers by and large. So Homeland Security does a lot of checks. There's no drug issues. They generally get employed here in Louisville. The market is like the UPS. It's a big hub here. So there's a lot of warehouse jobs that pay pretty well that translate to affordable living conditions here in Louisville. So it works well in this market. Also, they're just generally overlooked because they come over with no credit history, no job, and then they're putting their application down in a market that's already short. Millions of homes now at this point. So they're constantly beat out on paper.
John Coleman: That's fascinating because it is it is this overlooked group for exactly the reasons you mentioned. They don't fit neatly within the categories that we typically have for renters with a credit history, etc.. And yet all of the intrinsic qualities that would make them great partners as tenants in a community are their right, and they understand what it means to be in a more stable and safe environment and how valuable that is. You know, as people are listening, they're probably wondering, A, how they could potentially get involved with the work that you're doing at launch, or B, how they might serve immigrant communities or refugee communities in their own part of the world, wherever that might be, either here in Atlanta, for example, or also in other cities. You know, if someone were asking those questions, what would you say to them about ways in which they can support your efforts or potentially even stand up their own?
Jimmy Wright: Yeah, our effort. We're constantly raising funds, so we're always raising new funds. We also are looking for like minded property management so that as we're getting ready to raise a large fund and we're looking to different cities for property management help because it's difficult to export property management, it's a hard to take across the country. So we're looking for that. I would just say that there's many cities that have thriving refugee ministries that are connected to churches. We're not special, unique in that way. Our innovation is tying all these things together. So feel free to reach out to me. I've spoken to many of them and I'm happy to connect you to different ministries.
John Coleman: That's awesome. What cities are you moving into?
Jimmy Wright: Jimmy Well, we're looking at Dallas right now. We're looking at Raleigh, North Carolina and the Triangle area, actually, and also where the fund will take on it, probably another Midwestern city or two like the Midwest. It's a great place for people to settle, and it's where a lot of people go for secondary migration. So they land somewhere and then realize that they can't afford to live there or they sort of resort and talk to each other. And the Midwest is growing a lot.
John Coleman: That's awesome. Good luck in that expansion. I want to end with a couple of questions. You know, we always end and I'll circle back to this in a moment with what you're learning from scripture right now or what God is teaching you right now that might be relevant to our audience. Before we get to that, though. I would love to know, is there anything you feel you've learned in working with either a particular refugee that you all are serving or with these communities that you would want to share with others that you think could be valuable?
Jimmy Wright: Yeah, I've learned to be less ethnocentric. I've learned that I felt like my world and my culture was at the center of the map. And in working with refugees and immigrants and learning how they do things and how they approach things, how they generally think differently has really opened my mind and a lot of the people here at launch to new ways of thinking and really broaden our perspective. It's been a real joy to work with them and I think we get as much as we've given in a lot of different ways.
John Coleman: One of the lessons I feel like I come back with every time I travel and spend place in a somewhere that's culturally different than my own is just how much there is to learn from different ways of thinking, how different people operate around the world, and how ours isn't the only way. Right. And in fact, there are ways other places in the world and other communities that are better that we could learn from. And being surrounded by that every day and this melting pot of these refugee and immigrant communities has to be a really powerful experience. I'm sure, as we talked about, it needs to some tension sometimes, but it's also a really powerful experience.
Jimmy Wright: Many of the warm cultures that I've learned a lot from like so are and are super hospitable and put me and my family to shame and how welcoming and appealing giving they are and how, you know, there's never a closed door. I think that we can learn in the States a lot from that.
John Coleman: And it's a lot of this idea of welcoming the strangers among us. When you've been a stranger, it's probably a lot easier to kind of empathize with the stranger in that experience that they're going through. Must be so powerful about being disconnected from their communities and having to form a new community and must forever change the way in which you work with others and empathize with others. So, Jimmy, I want to conclude with something we ask everyone, which is just a lesson you're learning in Scripture right now, or that you feel that God is teaching you that you'd want to share with everyone here.
Jimmy Wright: Yeah. Sort of two quick things. So my wife and I have been praying and thinking about loving our neighbor and who is our neighbor. And as we've been reading scripture and praying, it's been on our hearts to care for widows, orphans, materially poor, and continue to care for the soldiers. We call them the wops, jokingly. But that's throughout the Bible. You're never going to go wrong caring for those groups that we've been praying and thinking through that. And then also, I've been reading Ecclesiastes recently and kind of thinking about the concept of beginning with the end in mind. So we've been thinking through both the winds of the widows and orphans and the truly poor and sojourner, and where do we want the end to look like in life and working backwards? Because there's so much that is so distracting in life that I've come to think about a lot of distractions recently, and our world is just full of distractions. And I think if we're not super intentional now where we're going. And I think the Book of Ecclesiastes really comes with a fine point. And then if we focus on where we're going, keep our eyes on Christ and our eyes on the target, then we're able to eliminate distractions.
John Coleman: Jimmy, this was an amazing story. You've mentioned it a few times, but Jesus obviously told us the two greatest commandments are love, God, and love your neighbor. And it's hard for me to think of a better way to do that than building communities like you're building that reflect the love of God and that serve the people who are most important to Him and whom He loves and creates a community among these people who probably wouldn't have thought of themselves as neighbors, but now are, and they're neighbors with you. And I just think it's really powerful what y'all are doing through Launch Capital and really, really grateful for the work and the service that you're doing there. So thank you for joining us today and telling us about it.