‘Blown away’: Philly real estate program hits $50 million in loans

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Les Hamilton was looking for an exit plan.

It was late 2022 and Hamilton was ready to wrap up his time as a military recruiter in Philadelphia and Maryland. At the time, he owned two rental properties but he didn’t have a plan for life after service.

He thought the answer might be in real estate. He just wasn’t sure how.

Enter Jumpstart Germantown, a training program designed to help new developers find their footing in the industry and create affordable housing in a city experiencing a crisis.

Hamilton signed up for the popular course as the clock on his military contract was ticking down.

The decision was life-changing.

“[Jumpstart] gave me an opportunity to do something I know I will be proud of, that I knew I would love doing outside of my military career,” said Hamilton, who served for 12 years.

Hamilton is now a certified real estate developer with two new properties he hopes to sell this spring — projects he got off the ground after receiving a pair of construction loans through Jumpstart.

“I like enacting positive change. I like knowing that the thing that I start, I can finish. And the thing I finish is something quality that someone else can use in the future,” said Hamilton.

Since launching in 2015, Jumpstart Germantown has loaned more than $50 million to real estate developers like Hamilton. It’s a milestone founder Ken Weinstein never thought the program would reach when he started it nearly a decade ago.

And he’s already looking ahead.

“We’re hoping that $100 million is not far off,” said Weinstein, a veteran developer who leads Philly Office Retail.

Weinstein created Jumpstart after receiving a slew of requests from aspiring developers who wanted his help getting started in the industry. By then, Weinstein had more than 30 years of experience. What he didn’t have was enough room in his schedule to mentor everyone seeking his guidance. He figured a program could solve that problem.

After creating a curriculum, Weinstein started hosting training sessions for people interested in renovating residential properties in Germantown, a mixed-income community with its fair share of blight. Initially, each session had 10 slots. Weinstein now teaches 50 people at a time and the program has gone citywide.

“I originally thought, ‘Let’s try this unique idea and see how far we go and maybe it fails after a year due to lack of interest. But it’s amazing how many people in the Germantown area and around Philadelphia still have not applied and we’re getting applications literally every day for our training program,” said Weinstein.

The goal of the program is to help new developers create affordable housing in middle neighborhoods. These are neighborhoods with reasonably priced real estate that are neither rapidly gentrifying nor “grappling” with concentrated poverty, according to the Reinvestment Fund. The majority of Philadelphians live in these communities.

“The idea is if we can help folks improve their own community and at the same time build wealth locally, then we have found a way to improve neighborhoods while keeping gentrification at bay,” said Weinstein.

More than half of each Jumpstart class has no experience with real estate development. The rest have completed no more than five projects before signing up.

The $125 program includes 16 hours of instruction that teach participants the basics of real estate development, including how to source a property, find financing, develop a design, and procure permits, among other topics. The program also provides mentoring and help securing acquisition and construction loans with below-market interest rates. The Reinvest Fund, LISC Philadelphia, JP Morgan and TriState Capital Bank have all contributed to the program to make those loans possible.

Graduates, who must put up some of their own money, use the loans to buy and renovate single-family homes to sell or rent. Under the program, the expectation is that each project will take 12 months to complete. Borrowers don’t have to start repaying the loan until construction is finished.

The average Jumpstart loan is $122,000, and there are limits on how much the properties developed through the program can be sold or rented for. The hope is that participants can turn a “decent” profit, said Weinstein, but the loans are not designed to be used in neighborhoods with hot real estate markets like Fishtown or Northern Liberties.

Hamilton is using his Jumpstart loans to fix up abandoned properties in North Philadelphia — one not far from Temple University, the other in Strawberry Mansion. He bought both buildings with his savings.

To date, Jumpstart has issued 416 loans and created 477 housing units.

“There’s no shortage of opportunity in the city of Philadelphia and I think Jumpstart understood that very well.,” said Hamilton. “It just provided an opportunity and a platform for people to be able to work together to achieve the things that are necessary to have in a city, which is affordable quality housing.”