Welcome to Becoming the Boss, our series celebrating small business owners who have made the transition from solo-entrepreneur to employer. Check back periodically for new installments.
When former Marine Corps captain and infantry officer John Warren returned home from battling counterinsurgents on the front lines of the Iraq War in 2008, he did some serious soul-searching.
Equipped with unique skills and experience picked up on and off the battlefield — and with a previously earned bachelor’s degree in political science from Washington and Lee University — the George C. Marshall Scholar sought to completely reset his career compass.
First up, Warren set his sights on breaking into the real estate market. And he did just that less than a year after transitioning from military to civilian life.
“When I came out of the Marine Corps, I searched within myself for what I wanted to do and where I wanted to be,” he told Free Enterprise. “I saw a huge opportunity in the residential lending market for rental and other properties.”
Seizing upon that opportunity, Warren founded Lima One Capital LLC in 2009. After working out of his apartment and at local cafes during his first few months in business, he opened up shop in Atlanta, Ga. He later moved his business to a sleek McBee Avenue office in his native Greenville, South Carolina, not too far from his childhood home on North Main Street.
Lima One Capital provides financing — often in the form of what’s commonly referred to as “hard money” loans — to buyers of single-family residential investment properties. The rapidly expanding startup sealed the largest bulk sale of single-family homes in U.S. history, Warren claims, selling more than 1,400 rental properties in Atlanta, Ga. to Blackstone Group PL for over $100 million.
“Our customers are investors who want to purchase and rehab investment properties,” Warren said. “We consider ourselves a one-stop shop to where, even if someone doesn’t have any experience in the industry, they can come to us and we can teach them how to get started, and introduce them to people to find homes for them, rehab the homes for them and to sell the homes for them. We provide a lot of value-add in addition to the capital that we provide.”
Warren also noted that Lima One Capital’s loans provide the cash flow necessary to help renovate U.S. neighborhoods with high rates of foreclosure in regions blighted with vacancies and particularly hard-hit by the recession.
The former Michelin North America Inc. territory sales manager and recipient of the Navy and Marine Corps Achievement Medal for Valor in Combat served our country for four years, including during a deployment in Ramadi, Iraq, in 2006. In all, he led two deployments to Iraq and the Middle East, commanding platoons of 42 and 72 Marines, respectively.
While serving in the Marine Corps, he successfully planned and led more than 300 combat missions in Iraq, including the first Iraqi Police raid within Ramadi. Additionally, he established relationships with Iraqi community members that led to the capture of more than 20 high-value insurgents.
Driven to give back to those who have given bravely to our country, Warren has also served as the lead representative for the State of South Carolina Marine For Life Program.
During his tenure in the program from 2010 to 2012, he oversaw outreach to active duty Marines during their transition from the Marine Corps to the civilian sector. He also assisted former Marines in finding employment and education opportunities and met often with C-level business executives and elected officials, including U.S. Senator Tim Scott, throughout the Palmetto State to highlight the value of hiring former military service members.
Warren, a husband and father to a 15-month-old son, also gives back by giving jobs to fellow veterans returning home from active military duty, including combat missions.
We spoke with Warren to find out why he’s so passionate about hiring veterans, what it’s like to run a fast-growing real estate financing startup, and about the ways in which hiring entrepreneurs can benefit businesses big and small. Here’s what we found out:
Following your career as a Marine, and with your education and experience, you could have chosen many different career paths. Why residential rental property real estate loans?
“In this particular field, I think it’s just a win-win-win for so many groups. Our investors and clients get solid returns. We also spark rippling changes. We’ve seen investors go into neighborhoods — and they do so many property renovations on the same street in the same neighborhood — improving the area and, by extension, the lives of those who live there. It’s pretty rewarding.
Prior to my time in the Marine Corps, I had some investment properties on the side with my brother, and I really loved it. We did all of the work on the homes ourselves, apart from the floor paneling. So I was very familiar with the industry.”
Why did you feel the timing was right to start your business in early 2009, particularly as you launched on the heels of 2008 financial crisis?
“After my four years in the Marine Corps, when I came out, I wanted a quality career and a lot of people did not want to hire me because they thought I was lacking in certain skill sets, even though I earned my political science degree and was an officer in the Marines. They said, ‘You’re in infantry guy. You need to go back and get your master’s of business degree or go to law school.’
I didn’t want to do either at the time, so I looked for opportunities in the real estate market. Yes, it was in 2009, right after the financial crash, and with all the new regulations, with Dodd-Frank and some other regulations, traditional lenders were getting pushed out providing any type of financing for non-owner-occupied properties.”
How did you initially fund your startup?
“I was able to raise capital and started the company with $1 million dollars in investment and did nine loans right out of the gate with that.
It was just me at the time. I’d started when I’d just gotten married to my wife and we were living in an apartment, and she will tell you that the best investment we made for our marriage was investing in a $356-dollar-a-month office with no windows in a very small space to get me out of the house, so that was really the first official office for Lima One Capital.
I tell people that my wife was really the first investor in the company. She had a really good, steady salary when I started out and she really supported us early on.”
Why, as you’ve said, do you “pride yourself on hiring veteran entrepreneurs”? Why is this something you’re so passionate about?
“I am for a variety of different reasons. There are a lot of different groups — some of it’s the media, some of it’s government agencies, some of it’s special interest groups — that I think perpetuate misconceptions of today’s veterans. Many think that somehow we are victims or somehow we’re broken, and that we are all owed charity for our service.
I think these are huge misnomers and I don’t think they’re accurate. I also think that the estimates of how many veterans have PTSD are dramatically overblown and have oftentimes hurt our chances of earning meaningful employment.
One thing I don’t feel veterans need are handouts. They’re a short-term solution with long-term consequences that are very bad. What they need are opportunities for careers.
So the human resources managers and C-level executives at companies and corporations need to recognize the value that veterans bring. Veterans need opportunities to be hired by these groups so they can not only help themselves and their families but also to make a positive impact on the companies that hire them.”
What special skills do you feel veterans bring to the table in the civilian working world, and in business in general?
“Retired Marine Corps general James Mattis recently talked about focusing on what he calls ‘post-traumatic growth’ in veterans. Due to the challenges veterans have gone through, oftentimes in combat and in a lot of intense situations throughout their military careers, they come out stronger, not weaker. This resilient strength enables them to perform better overall, especially under pressure, and to be very valuable and profitable to companies and society in general.
Veterans greatly benefit from their service. Serving gives them opportunities to lead people, to get some of the best training in the world, to be responsible for multi-million dollar pieces of equipment, maybe even while as young as at the age of 18. Nothing in the civilian or business world, in my experience, is nearly as challenging as what I experienced in Iraq fighting counterinsurgencies.
In other words, the military prepares you to handle whatever you may face, in life, in business or otherwise. The skills gained really transfer well.”
What was the moment you knew you had to hire your first employee?
“Once we started bringing in revenue, I really needed an administrator, so that was my first hire. Her salary was bigger than mine and it was a great investment for us.”
How many employees do you have today? Of those, how many are veterans?
“We started with me as the only employee, then hired the administrator, and now we’re up to about 75 full-time employees and 250 contract employees across the U.S. We now lend in 45 states in all of the major markets.
Today, 10 percent of our workforce are veterans. My chief operating officer is who I would now consider a co-founder. He was our first employee, outside of the administrator we hired as Employee Number One. We served together in Iraq and he is a very close trusted friend and colleague.
He’s the most respected Marine in my company, and like an older brother and mentor to me, a true operational mind. Our skill sets complement each other and we trust each other inherently.”
What does it mean to you to “be the boss,” to run your own company and team of employees, veterans included?
“It means being a strategic thinker, a leader who builds teams and executes plans. In terms of being a boss, I’m not a fan of the word ‘boss,’ to be honest.
In the Marine Corps and we talk about moral authority and legal authority, and the boss — even though that word has a negative connotation — would be someone in the rank structure who has the moral authority to lead. Hopefully that’s what I’ve proven, that I can lead with moral authority, as a Marine and as a business leader.
Leadership is an honor and a service, and with it comes great responsibilities, and that’s something I take very seriously.”
What does it mean to have created not only your own job, but jobs for others as well?
“By far the most rewarding part of my job is being able to see employees, many of them veterans, gain careers, not just jobs. Seeing them learn and use transferable skills in immensely rewarding.”