In this episode of Strategic Investor Radio, host Charley Wright interviews Ryan Wright, Founder and CEO of Fig Tree Capital Ventures. Dallas-based Fig Tree is focused on direct investments in oil, gas, and real estate.
Ryan says oil and gas investors tend to be emotional, and this partially accounts for the commodities’ volatility. His firm is focused on the Stack area in Oklahoma, which isn’t as famous as other patches like the Bakken in North Dakota. But Ryan says the Stack produces higher-quality oil in accordance with the West Texan Intermediate (“WTI”) standard, whereas oil from North Dakota trades at a $7-8 per-barrel discount.
Moreover, the Stack has lower production costs. Leases are cheaper, operating expenses are lower due to the greater abundance of water, and transportation is much more affordable thanks to the Stack’s proximity to the major oil hub of Cushing, Oklahoma. These reasons help explain why the Motley Fool recently named the Stack the #1 oil play to watch, and why Continental, Newfield Exploration, and Devin Energy are all active in the area.
Moving on, Charley comments on his recent trip to the North Dallas area for a family wedding, where he says he saw “nothing but high-class malls and restaurants, Mercedes Benz and Lexus dealerships.” Toyota and State Farm have moved into the area, and this has caused an influx of affluent professionals and a booming real estate market.
Ryan says his firm’s specialty is in buying “ugly” houses – homes owned by seniors who haven’t made updates for decades and are ready to move on to the next stage of life, but own homes in newly trendy areas. Fig Tree has an in-house rehab team that can remodel and flip a property in 3-4 months, making a 5% return. On an annualized basis, this translates into returns of between 15-18%.
Near the end of the interview, Charley asks Ryan if Fig Tree is involved in any industries other than energy and real estate. Surprisingly, Ryan responds by briefly explaining a company backed by Fig Tree that’s working on wireless electricity transmission technology based on the theories of Nikola Tesla! Ryan says he’s personally witnessed wireless electricity transmissions of up to 30 miles, but he can’t divulge much more about the company without requiring Charley to sign a Non-Disclosure Agreement.