- (05:15) The rise of impact investing and its importance
- (12:30) The dos and don’ts of impact investing
- (18:45) The role of affordable housing and why it matters
- (25:00) How sustainable investing operates and its benefits for investors
- (32:00) The concept of profit with purpose in real estate and impact investing
- Website: https://blueeyedcapital.com/
- Contact Number: 707 – 641 – 2373
- Email Address: jon@blueeyedcapital.com
- Contact Number: 843-619-3005
- Email: corwyn@corwynmelette.com
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
ROBYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology that provides you with the tools you need to start and build your successful real estate career. Call me today, Robyn Collins, R – O – B – Y – N Collins with Red Robyn Homes at 843-557-5003. Again, that’s 843-557-5003 or visit us at redrobynhomes.com/joinexit and make your exit today
CORWYN:
Good morning, good morning, and great morning to you. Guys, welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host. Yes, that is me, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. So guys, hey, if this is your first time listening to this show, you are in for a treat because our mission here, we have simplified it. We have made it simple, which is to empower our community through real estate education, financial literacy, all right? And sometimes we flip those things around and tell you financial literacy and real estate education because we always want you to get your money right first, right? So guys, look, hey, we have a fabulous episode today. I have an amazing guest who’s going to drop some real jewels and wisdom. So I want you to take this time right now to grab your pen and paper so you can get some notes from this episode so that you can employ this information later on in the course of your life, in the course of your business. I always want to give a shout out to you faithful listeners, you guys who tune in. Ms. Carolyn Lequeu, Pastor Elder Evans, our folks from Monkey’s Corner, all the way out, the Jons at Guatemala Island, you guys that listen to us faithfully. I want to say thank you for tuning in, for you who passing through and maybe catching us on the radio. Guys, safe travels, but you just still have to go out, be safe in your comings and your goings. We always pray a blessing for you all because we love you all, all right? So guys, look, let’s get to it. So, hey, I have, look here, I talked about the red carpet, the platinum carpet, all that. So we got diamond grade carpet laid today because this dude is a jewel. So we have diamond grade carpet laid today as we welcome to the show, Jon Weiskopf with Blue Eyed Capital. He is the CEO and founder of Blue Eyed Capital. I cannot wait to tell and share his story with us today. So Jon, welcome to the show.
JON:
Thank you. Thank you. I’m really excited to be here. I appreciate this.
CORWYN:
You’re welcome. You’re welcome. So Jon, if you don’t mind, give our listeners a high level overview of you and Blue Eyed Capital and what it is that you guys do.
JON:
Sure, sure, sure. Let’s see. 20 years ago, I started in real estate. I’m a mechanical engineer. So at the school for engineering, wanted to be a race car engineer. Didn’t work out. Got into HVAC and power and all that cool stuff that lives behind the walls. And about two years ago, I decided I wanted to stop building somebody else’s dream. I worked for Apple for about 10 years, building their retail stores and running that program. And after becoming a dad, my son’s four years old now, he is the Blue Eyed in Blue Eyed Capital. And I decided that it was, what future was he going to have if I didn’t do more for him and humanity really, and the communities that he’s going to grow up in. So that brings me here today. I’m a proud owner of three properties throughout the U.S. and looking to keep building, doing more and helping.
CORWYN:
So Jon, you’re the proud owner of three properties, but correct me if I’m wrong, but we’re not talking single. You have multifamily properties. Am I correct?
JON:
Multifamily. Yeah. For me, I’ve been around buildings my whole career, 20 years. And so they are what I know. That’s everything about me. So the bigger, the better.
CORWYN:
Interesting. So how many actual doors do you currently own?
JON:
We have 228 doors right now.
CORWYN:
Three properties. So that’s roughly, hold on. Let’s do some quick math here. That’s 70 some odd doors per property on average, and you haven’t just got a country. So I won’t necessarily say it’s a new endeavor, but it’s the employment of the information techniques, process, and things that you have learned or been exposed to over your years in quote unquote, the workforce, having worked for major corporations such as Apple. I can’t imagine the efficiency that you have gleaned from that type of operation. Even though I know it’s probably ugly behind the curtain. We’re real here, Jon. I know it’s probably ugly. We talk about it a lot.
JON:
It’s not all rosy. It’s not all rosy.
CORWYN:
But you’ve taken from that and employed that information into your own personal endeavors. So I’m loving this right now.
So you mentioned your son being essentially that catalyst for you to say, Hey, you know what I’ve been doing this and everybody else has been benefiting from what I’ve been doing. I can do it for myself because I think that’s a bridge right there, Jon. Some people they’ve been doing it for other people. Some people cannot do it for themselves because they can’t, they need that motivation, that spark repeatedly. So your son being the catalyst, what was your vision for, okay, look, I’m going to go ahead and step out. What was your vision for Blue Eye Capital?
JON:
Well, it all started when I was a miserable human being from working too much, 60, 80, maybe even a hundred hours a week at points. And my father passed away when I was young and my mom was a hard worker and was always there for me. And I realized that the harder I worked, the less I was getting and not just financially, but the less time I was getting. And I was not the person I wanted my son to grow up to be. I wanted to be better. He deserved better. My wife deserved better. I was scared, scared out of my mind to quit. But to me, it was, I could gain wealth for my son, but what world am I going to give him or what world is he going to grow up in if I don’t do something more? Because it’s not just him that’s going to live in this world. We live in a community. This planet is not ours alone. It is everybody’s. It is humanity’s. And there are people that are suffering. There are people that don’t have necessities. There are people that don’t even realize they should have them. And I’m a lucky guy. My son wakes up at five 30 in the morning. I get up at three, but I get to hug him every morning. And he has the biggest smile in his face. And I want every single parent to have that. And so that was really the catalyst for me, which was how do I take the skills that I have? And I guess the drive to go change the world, change people’s lives and do something else, do something more.
CORWYN:
That is profound, man. That’s one of the things that I’m excited for because to be transparent, man, some of the stuff that you’re talking about, it really echoes, but it’s that grounding because we all get caught up oftentimes in the rat race. And when you get over in the real estate realm, it’s always gold because everything is always time is of the essence. But that fundamental of why I’m doing this, I always tell my agents and the people around me that are looking to be a part of otherwise be in this industry. I always say to them something along the lines of, Hey, look, you need to consider what your why is, and you need to reflect on that constantly so you can make sure that you’re So I’m going to hit you with shift a little bit here because in your development of commercial buildings and all that kind of stuff, essentially you have learned to identify opportunities in real estate that some may not consider to be opportunities that otherwise don’t know how to identify. So let’s talk about that. What is it that you have learned to look for in a property? Do you have a vision for every property that you’ve seen? Well, how does that transpire? How does that work for you, Jon?
JON:
Sure. I think one of the most misunderstood or misappreciated aspects of real estate ownership is the actual real estate itself. It is not just a building with paint. You can make anything look pretty. You can put lipstick on a pig, they say, but it’s still a pig. And so you can paint the building, but it’s still an old building. So what’s beneath the walls? How was that built? What year was it built? What was the codes at the time it was built? I see, I walk into properties, I walk into restaurants and I look around at their air conditioning system. My wife gets mad at me because I’m like, ah, they messed that up. I can feel that draft. That’s not right. Some people look at certain things. Me, I look at buildings, I look at their systems and I start to see the second I look at a property, I start to see what is my failure point? What is going to go wrong if I buy this? Because what goes wrong, yes, can hurt me, but it’s also in turn spinning around. That’s my opportunity. What can I change? Can I change it? Some things are unchangeable. I wish I could change every building, fix every old decrepit building. Not all the time, it’s not possible. And I think you need to, that’s the stuff that’s going to bite you. That’s the stuff that’s going to cost you money that you did not plan for. It doesn’t matter what rents you were charging people. Market, double market, a catastrophic event in a property, busted plumbing line or something that could wipe you dry, right? Wipe you clean. And so I think every building and every opportunity and every property is a different picture.
It’s a different painting. It’s the underlying piece of what’s going to go wrong when I buy this. What’s going to go wrong in 10 years.
And it’s not just today. It’s not just what’s wrong today. I’ll give you an example. I own a property with some partners and there was a misinterpretation of our inspection report and we missed something. And we have 15 air conditioning units that need to be replaced. And we did not have them as part of our CapEx plan. And I just found out today that my partner’s like, well, they won’t fail. Well, guess what? Today happens to be the day we found out three of them actually just failed yesterday. So even a good engineer, we miss things, but that’s what people need to be worried about. And it’s not today. I want to stress that it’s not today, Corwyn. It’s five years from now, because in five years from now, something might not be bad today, but in five years from now, when you go to sell it, is the next person going to want to buy it because they’re going to have to deal with it. And so I always try to look five years past whatever my exit point is going to be for what I have to plan for. And I’m not saying that I raise money to fix all of that stuff. Don’t get me wrong, but it’s that planning to fail, I think. And that maybe that’s just the engineer brain in me, but I plan to fail not to succeed.
CORWYN:
So it’s interesting that you should talk about that. So a number of years ago, I dealt with two properties back to back that both had cast iron plumbing, drain lines with old cast iron. I had a nightmare experience with the first one. And getting to the second one, one of the first things, as soon as I found out what the plumbing was, immediately, hey, look, this is going to fail. What is your plan? How are you going to deal with this failure? Because the old cast iron pipes, they rot out. And then you end up with plumbing. What you just said there, I had a business partner one time, we’re friends, we had a home restoration business, but he could walk in the house and literally walk on the floor and tell you, all right, you got to roll beam right here. You got this. So you’re that guy as it relates to what’s in the wall, the electrical and the plumbing, where you foresee where the issues are, but as soon as you walk in the building, that’s uncanny. So how does someone in this environment, in this realm, man, you ain’t going to get everything, but how do you use that as a strategy or use that as you form your strategy to try to hedge your risk?
JON:
Part of it is a go or no go type of thing. And so we can’t fix the world. And I’m about sustainability and I want to do the best that I possibly can, but I also need to be profitable. I can’t impact people’s lives. I can’t impact my investor’s lives if I’m not profitable.
So everything has to be done within reason, I think. And I don’t, for a hundred, that’s failure. You’re never going to make it. Nothing’s perfect. Nothing’s ever going to be perfect. So where’s the biggest problems? Can I handle those quickly? Can I take care of them quickly? If I cannot do it quickly, it’s not the project for me. I take on some heavy duty opportunistic type deals, but that’s a specific business plan. That’s a specific model. That is like a new development because you might as well knock it down and start all over type of deal, how much work you’re doing. But I think the first thing is I don’t like to look at rents. Rents are the last thing. Income’s the last thing I look at. And the reason why I say this, and I know people are going to question me on this, but it’s all market driven. It’s economy driven. Look at rents today. They’re reversing. Everybody thought they were going to go up forever. They’re reversing. Nobody can control that. The one thing I can control to an extent is expenses. So if I can set up a business plan that is optimized expenses, whether I need CapEx money, investment money to beautify the property or fix it up, fine.
But if I can control that, everything should be golden there after, again, assuming all the financials work out. I don’t bet on rents and charging for pets and all of this other stuff to solve my problems. I look at expenses first. If I can control those expenses, I know I’m going to have the high probability of having a successful investment.
CORWYN:
That makes perfect sense. Because again, you cannot control anything. Market dictates where your income is going to be, but you dictate where you spend your money, what improvements make sense, So let me get us, one of the things that I picked up in your bio is about housing affordability. So affordable housing, sustainability of that. So let’s talk about that. Everybody has a different, in my opinion, because I do a lot of that affordable, a lot of stuff just literally ended a meeting a little bit ago and was going through a project that we were working on. So affordability, what is your definition of affordable housing?
JON:
I don’t like my definition, but federal guidelines are an individual spending more than 30% of their income on rent, simple, clean. I think it’s a lot more complicated than that, especially the deeper and deeper I get into this industry. I’m finding out it’s a lot more complicated, but strictly said, the cleanest definition is that if an individual is paying more than 30% of their income on rent, they’re going to be cost burdened. So as an owner, if you look at what the area mean income is, or you look at the income of your residents that are applying for your property, and they’re paying more than 30% of your income, you should assume that somewhere along the line, your rent’s not going to get paid at some point. Maybe a bill comes due. Maybe something else happens. Inflation happens. I would put food on my table before I pay rent. And so again, we talk about what we can control. People mask affordability and affordable housing with non-market rates. I don’t think that’s accurate. And I think that’s really misleading to A, the individuals that go after affordability. But look, if you’re making $300,000 a year and you’re spending more than 30% of your income on, I would get an accountant and I would get a financial advisor. You have a little bit of more wriggle room to survive, but those individuals that are barely making needs don’t. And so do you want a paying tenant or a paying resident or an unpaying resident? Pick which one you want and then decide how your business model’s going to work out from there.
CORWYN:
So affordable housing, rental, housing, expense, mortgage, whatever definition, that’s across the board. So I do a lot in both realms, but more so in the sales realm of selling affordable housing. And it’s all relative because a person making $300,000 a year versus a person making $30,000 a year, affordability for the two people is completely different. And you can’t maneuver the monthly rent or whatever, oftentimes enough to service everybody. It’s not going to work. It’s just not going to work. So it’s interesting that you should point that out because that’s the reason why investors should care about affordability because if they don’t have affordability- It hits everybody. It hits everybody. Exactly. So again, your option is a paying tenant where many just focus on the rent they can charge and maximizing and pushing it to a limit. They don’t think about who can afford this and the person who comes, can they truly afford it? So what mechanisms do you use or employ to verify that affordability?
JON:
Still trying to get good at this one. Okay. But we look at area mean income and that’s set by the federal housing authority or dictated by the demographics. And then we look at what our rent is and then we’re doing background checks, right? We’re qualifying individuals. I have a low-income housing tax credit property in Louisville, Kentucky. We accept vouchers there. So we have some section eight vouchers there. We also have some individuals that part of the rent is being paid for by Catholic charities. And we have one other charity that I’m forgetting the name of at the moment. Not all the time are individuals having to pay the full rent themselves, but it’s qualifications. And I think it’s keeping in touch with tenants. If a tenant have to have this talk with their property manager all the time, if somebody misses a rent payment, they don’t get evicted right away. They don’t get put on notice right away.
I want to know why. And I want my property manager to go find out why, especially for somebody that has paid 11 payments on time. Why did they miss one? Did something happen? We can’t help everybody, but at least we can be informed in our decisions of what we’re doing. But sometimes, and I was on a podcast recently and something similar came up, evictions is probably the hardest thing that I was most unprepared for in this business. It’s hard to kick somebody out. And now look, this is my view.
If one person pays, everybody has to pay. It’s just fair. You can’t give exceptions. It’s unfortunate, but you can’t, but it’s hard kicking somebody out. I had one that didn’t pay for 12 months and she got to live free for 12 months. And we actually even gave her some money to relocate and find a new apartment to help. It obviously helped us financially. We needed to get everybody paying in there, but it’s hard looking at past references and things like that. I will say the one thing that I cannot stand about the industry right now, and I think there’s some things being done to try to change it, is a lot of people need a background or credit checks, yet how do they get credit? They can’t even get credit. So how do they get a credit check? It’s this catch 22 in the industry. We try to look at offering programs for a credit report or on-time reporting for credit building and things like that. And we talk about sustainability, affordability. I think part of the sustainability thing is on social impact is how do you help people? How do we get people in a position to thrive? The more you can do that by offering programs, we use a lot of nonprofits to help us with education and things like that, but the more that person became more capable in their own life to go to work, be more capable at work, they might even get a promotion, might start making some more money, but then they in turn come back and you help them, they become more stable. So I think the long-term goal with affordability is how do you maintain stability in somebody’s life? And that stability is long-term staying in one place for at least a year, if not longer. So that’s interesting.
CORWYN:
And what you just talked about, Jon, if you will, so saying in more of a nutshell is the term impact investing. So if you don’t mind, let’s explore that term for our listeners, because people invest for various reasons, but impact investing is tied to more than just the money. So what is impact investing?
JON:
Sure. Impact investing is investments made with the intention to achieve additional outcomes outside of just financial. And I say additional, and I use that very broadly because impact investing can apply to a range of different things. You might be somebody that cares a lot about the ocean and you want to invest in a technology company that’s trying to remove pollution from the ocean, right? That’s impact investing. The reason why I chose multifamily and residential from an impact perspective is from a social aspect, if you can produce income for investors, but at the same time produce environmental and social outcomes, you have one of the most powerful forms of impact investing, if not the most powerful form. I have this tagline, there’s a term I call spiral compounding value. And so if you impact one individual at their property, you give them a chance to have a healthy home. You give them an ability to stay at their home for an extended period of time. You give them access to resources they didn’t have, just like internet. We all think internet is available to everybody. It’s not, right? You give them that. How many other people do you think that one individual goes out and impacts without you even touching that person’s life, right? Maybe it’s a friend. Maybe it’s a family member that sees where they’re living, how they’re living. And they say, why don’t I have that? What did you do to get that? I just lived in the right spot. Huh? So the reason why I like impact investing, when we started, I said about my son, to me, it’s more than just financial is I’m doing investments. So obviously financial returns have to be there, cannot impact without financial.
But to me, I’m looking for investors that are, that want more, that have a greater purpose to improve the quality of our world as humans. We are a community. We are not individuals and we need to get rid of this selfishness that is maybe overtaking our society a bit. That’s my little spiel and preach.
CORWYN:
I love that. I love that. Cause that again, is my wife runs a nonprofit alumni association for our high school. And the course of the year, they do an event or two, but the biggest is just a single tailgate weekend as a few miscellaneous things that happened, but we have a big tailgate. All the classes come out, party, cookout, all that kind of stuff. We have a good time DJ and all that stuff. Everybody pays a cost to be there as a vendor. The money raised though, is used for scholarships for the high school children that’s coming out. And on average, they’ve been given out three, three plus scholarships a year. They’re working quickly to get to five. And she says this thing, Jon, she says, you know, cause everybody talks about, it’s a great time because you’ll see all these people you haven’t seen in forever. And every year, more and more people are coming. People that you haven’t seen in more forever. But she says, it’s parted with a purpose. We parted with a purpose. Yeah. We have a great time. We have a good time. We reminisce, but there’s a reason for it. It’s not just a tailgate. It is, we’re raising money to provide scholarships for the kids coming from our home, from our school, home school, from our high school to help them catapult them into their futures. Jon kudos to you for doing what you’re doing to make an impact in people’s lives, to be a part of the community. I’m going to say this and I’m a pause. I want to make sure we get contact information out. But Jon, our CEO for the company franchise that I own says this thing says, Hey, we are human humans becoming, we always talk about human potential, but we’re humans becoming people want to say I’m a human being. No, that’s just okay. You’re resting where you are. You’re not making a difference. You’re not becoming anything more and you’re not inspiring anybody else to do anything greater than, so Jon, thank you for being a human becoming.
So Jon, how can people reach you?
JON:
LinkedIn. I do most of my stuff on LinkedIn. You can search for my name. I’m sure you’ll have the contact information there, or my website is www.blueeyed capital.com. And please, I’m here to educate. If I can do anything, it’s to educate. Obviously I’m trying to build a business, but to me, it’s educating people that this impact investing is out there. And I like to say, Corwyn, expect more for your money. Expect people to do more, right? This isn’t philanthropy. This is life changing stuff. So if you’re an investor out there, expect more for what you’re doing because it’s possible and you should not have to sacrifice.
CORWYN:
So Jon, I want to thank you for that. For our listeners, guys, I encourage you blueeyedcapital.com. The website is clean, crisp, great information, easy to contact Jon and his team for more information and to get connected because that’s what this thing here is all about. Jon, I want you from the bottom of my heart for being on today’s show with us. I want to say thank you so much for taking time out of your busy schedule.
JON:
Oh, thank you. This is awesome. I appreciate it. It’s got a smile on my face.
CORWYN:
Awesome. So for our listeners, guys, hey, y’all got it. Y’all know what to do with it. Something with it. Do something with it. That’s how this thing here goes. So look, y’all know I love you. You know how I say, you know what I do, but I’m always going to give it to you and be true to it. I love you. I love you. I love you. And we’re going to see you guys out there in those streets.
