OUR STORY
Photos on this page: the grandkids, 2017
Lessons Learned the Hard Way
OUR STORY
Photos on this page: the grandkids, 2017
Lessons Learned the Hard Way
OUR STORY
Photos on this page: the grandkids, 2017
Lessons Learned the Hard Way
OUR STORY
Photos on this page: the grandkids, 2017
Lessons Learned the Hard Way
OUR STORY
Photos on this page: the grandkids, 2017
Lessons Learned the Hard Way
Every now and again, luck took a holiday.
Good fortune has followed us for most of our careers—we are the first to agree. Sure, we would love to proclaim it is all due to our extraordinary skills and business acumen, but we know we have mostly been just plain lucky.
Lucky to be in Palm Beach County at the beginning of its meteoric growth. Lucky to have such wonderful and appreciative clients. Lucky to have an excellent team of co-workers, the true stars of our companies. And lucky to work alongside other members of a family in which fundamental concepts like trust, reliance, and intuition are simply axiomatic.
However, every now and again, luck took a holiday. And despite all the associated stress, anxiety, and fear of a term in debtor’s prison, those situations proved to be some of the best learning experiences of our careers.
STICK TO WHAT YOU DO BEST. Be it due to timing or luck, we had exceptional results with our first high-end spec homes and luxury home subdivision; then we completed and leased the first buildings in our new industrial park.
Perhaps there is a wee chance that our strong start led to some undue confidence—we were sure there was little we were not capable of when it came to residential or commercial construction. So off we went to develop a small shopping center and a 76‑unit project of lower-priced townhouses. The shopping center was a hit. The townhouses? Not so much. After each phone call from the sales staff announcing a new full-price sale at $69,900, we would look at each other and say, “Yay. We only lost $8,000 on that one.”
That is how we learned that if you are a successful custom luxury home builder, perhaps you should stick to doing that. Tract-style building is a totally different enterprise, and not for us.
If you are a successful custom luxury home builder, perhaps you should stick to doing that.
Do all your homework, every time.
NEVER TAKE ANYTHING FOR GRANTED WITH A HOME DESIGN. Once, we bought a beautiful one-acre lot and borrowed an extremely successful floor plan from a Miami builder to build a spec home. We changed the exterior of the design and started construction.
It was not until the trusses went up that we realized the ceilings were only nine feet high and flat. That may have been acceptable in Miami but it was a terrible idea at a time when lofted ceilings were the norm in our county. Some quick changes to the trusses added height to a few areas, but would that spec home sell? We were worried.
Luckily, a couple fell in love with the large lot and bought the home. But the lesson was learned—never, ever take anything for granted in design. Do all your homework, every time.
LESSONS TAUGHT BY RECESSIONS. There is nothing like a prolonged downturn to remind one of alternative paths that might have been taken.
The recessions of 1989–1991 and 2006–2014 were hard to weather. Because we had always believed in diversification, we had interests in both residential and commercial real estate. At the beginning of the 1989 recession, we had a diverse set of commercial tenants in our industrial buildings—or at least we thought we did. One year later, as many of them left for home offices because they could not afford rent, resulting in massive vacancies, we noticed most were businesses that depended on a booming construction industry.
We learned many lessons during that recession, and one of the best was never to rely heavily on a single industry when leasing buildings. During those recessions we made loan payments out of pocket when needed and did our best to accommodate our tenants. The 1989–1991 recession lasted only two and a half years, but it felt like a hundred!
By 1991 the banks looked for developers and builders who were still standing. That was when our name became “gold” in the commercial lending world. We attribute a lot of it to our determination to never default on a loan. Most important, we learned how to plan better to cope with sustained economic downturns.
We determined to never default on a loan.
Never commit to a fixed final selling price based on an early estimate.
AN IMPORTANT LESSON ABOUT PRICING. One of our most successful projects—our first villa community—could have been a fiasco. We were building single-family homes in a country club community when we saw an opportunity to build multi-family villas in a highly attractive price range that was being ignored by the other builders.
As we excitedly finished the designs and started the infrastructure, the sales department quickly pre-sold over half of the units at pricing based on early estimates. Oops! By the time we finished the plans and priced out the units, we realized those first buyers were getting a remarkably good deal. Fortunately, we were able to adjust pricing for the balance of the homes. Today, that project remains one of the most popular subdivisions in that country club.
Having dodged a serious disaster, we learned that preliminary cost estimates for an entire subdivision are just that, and one should never commit to a fixed final selling price based on that early estimate.
SOMETIMES LUCK STEPS IN
During the recession of 1989–1991 we had to pay interest on lots we had purchased in Admirals Cove. Just as our checking accounts were nearing empty, a client bought one of those lots and decided to proceed with our home design. Ron worked as the site superintendent, something he had not done for us before (although he had been managing our site superintendents for years). The profit from that construction project, plus the interest from small loans we had made in previous years, helped feed our families until the market rebounded in 1991.
5
RECOGNIZE YOUR LIMITATIONS. A builder might build ten or twenty homes well. Yet one additional home may be just too much to handle—and can put all of the other homes at risk of not being done well.
In the early years, we personally handled existing and prospective clients and tenants on a daily basis. As our tenants grew into the thousands, we brought in middle management to deal directly with clients and tenants.
After the recession ended in 1991, we realized our one-on-one skills were crucial to our success, so we returned to focusing directly on those relationships. “We got smaller,” Ron says. “We had outstretched our capacity to keep our customers and tenants happy. We won’t do that again. We only want to do what we can do well. Now, every customer and tenant prospect works with a company principal.”
Our one-on-one skills have been crucial to our success.
Books are filled with clever quotes about errors of the past being the basis of wisdom and success in the future. That is true of our experience, too. There may have been gaffes, snafus, and miscalculations (one resulting in midnight landscape installation by vehicle headlights the night before a model opening). But each unfortunate event resulted in a precious insight, a merit badge in humility, and one misadventure never to be repeated. Whatever mastery, insights, and competencies we may possess today are products of those past lessons learned.
Lucky to be in Palm Beach County at the beginning of its meteoric growth. Lucky to have such wonderful and appreciative clients. Lucky to have an excellent team of co-workers, the true stars of our companies. And lucky to work alongside other members of a family in which fundamental concepts like trust, reliance, and intuition are simply axiomatic.
Every now and again, luck took a holiday.
Every now and again, luck took a holiday.
However, every now and again, luck took a holiday. And despite all the associated stress, anxiety, and fear of a term in debtor’s prison, those situations proved to be some of the best learning experiences of our careers.
If you are a successful custom luxury home builder, stick to doing that.
If you are a successful custom luxury home builder, stick to doing that.
STICK TO WHAT YOU DO BEST. Be it due to timing or luck, we had exceptional results with our first high-end spec homes and luxury home subdivision; then we completed and leased the first buildings in our new industrial park.
Perhaps there is a wee chance that our strong start led to some undue confidence—we were sure there was little we were not capable of when it came to residential or commercial construction. So off we went to develop a small shopping center and a 76‑unit project of lower-priced townhouses. The shopping center was a hit. The townhouses? Not so much. After each phone call from the sales staff announcing a new full-price sale at $69,900, we would look at each other and say, “Yay. We only lost $8,000 on that one.”
That is how we learned that if you are a successful custom luxury home builder, perhaps you should stick to doing that. Tract-style building is a totally different enterprise, and not for us.
Do all your homework, every time.
Do all your homework, every time.
NEVER TAKE ANYTHING FOR GRANTED WITH A HOME DESIGN. Once, we bought a beautiful one-acre lot and borrowed an extremely successful floor plan from a Miami builder to build a spec home. We changed the exterior of the design and started construction.
It was not until the trusses went up that we realized the ceilings were only nine feet high and flat. That may have been acceptable in Miami but it was a terrible idea at a time when lofted ceilings were the norm in our county. Some quick changes to the trusses added height to a few areas, but would that spec home sell? We were worried.
Luckily, a couple fell in love with the large lot and bought the home. But the lesson was learned—never, ever take anything for granted in design. Do all your homework, every time.
We determined to never default on a loan.
We determined to never default on a loan.
LESSONS TAUGHT BY RECESSIONS. There is nothing like a prolonged downturn to remind one of alternative paths that might have been taken.
The recessions of 1989–1991 and 2006–2014 were hard to weather. Because we had always believed in diversification, we had interests in both residential and commercial real estate. At the beginning of the 1989 recession, we had a diverse set of commercial tenants in our industrial buildings—or at least we thought we did. One year later, as many of them left for home offices because they could not afford rent, resulting in massive vacancies, we noticed most were businesses that depended on a booming construction industry.
We learned many lessons during that recession, and one of the best was never to rely heavily on a single industry when leasing buildings. During those recessions we made loan payments out of pocket when needed and did our best to accommodate our tenants. The 1989–1991 recession lasted only two and a half years, but it felt like a hundred!
By 1991 the banks looked for developers and builders who were still standing. That was when our name became “gold” in the commercial lending world. We attribute a lot of it to our determination to never default on a loan. Most important, we learned how to plan better to cope with sustained economic downturns.
Never commit to a fixed final selling price based on an early estimate.
Never commit to a fixed final selling price based on an early estimate.
AN IMPORTANT LESSON ABOUT PRICING. One of our most successful projects—our first villa community—could have been a fiasco. We were building single-family homes in a country club community when we saw an opportunity to build multi-family villas in a highly attractive price range that was being ignored by the other builders.
As we excitedly finished the designs and started the infrastructure, the sales department quickly pre-sold over half of the units at pricing based on early estimates. Oops! By the time we finished the plans and priced out the units, we realized those first buyers were getting a remarkably good deal. Fortunately, we were able to adjust pricing for the balance of the homes. Today, that project remains one of the most popular subdivisions in that country club.
Having dodged a serious disaster, we learned that preliminary cost estimates for an entire subdivision are just that, and one should never commit to a fixed final selling price based on that early estimate.
SOMETIMES LUCK STEPS IN
During the recession of 1989–1991 we had to pay interest on lots we had purchased in Admirals Cove. Just as our checking accounts were nearing empty, a client bought one of those lots and decided to proceed with our home design. Ron worked as the site superintendent, something he had not done for us before (although he had been managing our site superintendents for years). The profit from that construction project, plus the interest from small loans we had made in previous years, helped feed our families until the market rebounded in 1991.
Our one-on-one skills have been crucial to our success.
Our one-on-one skills have been crucial to our success.
RECOGNIZE YOUR LIMITATIONS. A builder might build ten or twenty homes well. Yet one additional home may be just too much to handle—and can put all of the other homes at risk of not being done well.
In the early years, we personally handled existing and prospective clients and tenants on a daily basis. As our tenants grew into the thousands, we brought in middle management to deal directly with clients and tenants.
After the recession ended in 1991, we realized our one-on-one skills were crucial to our success, so we returned to focusing directly on those relationships. “We got smaller,” Ron says. “We had outstretched our capacity to keep our customers and tenants happy. We won’t do that again. We only want to do what we can do well. Now, every customer and tenant prospect works with a company principal.”
Lucky to be in Palm Beach County at the beginning of its meteoric growth. Lucky to have such wonderful and appreciative clients. Lucky to have an excellent team of co-workers, the true stars of our companies. And lucky to work alongside other members of a family in which fundamental concepts like trust, reliance, and intuition are simply axiomatic.
Every now and again, luck took a holiday.
However, every now and again, luck took a holiday. And despite all the associated stress, anxiety, and fear of a term in debtor’s prison, those situations proved to be some of the best learning experiences of our careers.
If you're a successful luxury home builder...
STICK TO WHAT YOU DO BEST. Be it due to timing or luck, we had exceptional results with our first high-end spec homes and luxury home subdivision; then we completed and leased the first buildings in our new industrial park.
Perhaps there is a wee chance that our strong start led to some undue confidence—we were sure there was little we were not capable of when it came to residential or commercial construction. So off we went to develop a small shopping center and a 76‑unit project of lower-priced townhouses. The shopping center was a hit. The townhouses? Not so much. After each phone call from the sales staff announcing a new full-price sale at $69,900, we would look at each other and say, “Yay. We only lost $8,000 on that one.”
That is how we learned that if you are a successful custom luxury home builder, perhaps you should stick to doing that. Tract-style building is a totally different enterprise, and not for us.
Do all your homework, every time.
NEVER TAKE ANYTHING FOR GRANTED WITH A HOME DESIGN. Once, we bought a beautiful one-acre lot and borrowed an extremely successful floor plan from a Miami builder to build a spec home. We changed the exterior of the design and started construction.
It was not until the trusses went up that we realized the ceilings were only nine feet high and flat. That may have been acceptable in Miami but it was a terrible idea at a time when lofted ceilings were the norm in our county. Some quick changes to the trusses added height to a few areas, but would that spec home sell? We were worried.
Luckily, a couple fell in love with the large lot and bought the home. But the lesson was learned—never, ever take anything for granted in design. Do all your homework, every time.
We determined to never default on a loan.
LESSONS TAUGHT BY RECESSIONS. There is nothing like a prolonged downturn to remind one of alternative paths that might have been taken.
The recessions of 1989–1991 and 2006–2014 were hard to weather. Because we had always believed in diversification, we had interests in both residential and commercial real estate. At the beginning of the 1989 recession, we had a diverse set of commercial tenants in our industrial buildings—or at least we thought we did. One year later, as many of them left for home offices because they could not afford rent, resulting in massive vacancies, we noticed most were businesses that depended on a booming construction industry.
We learned many lessons during that recession, and one of the best was never to rely heavily on a single industry when leasing buildings. During those recessions we made loan payments out of pocket when needed and did our best to accommodate our tenants. The 1989–1991 recession lasted only two and a half years, but it felt like a hundred!
By 1991 the banks looked for developers and builders who were still standing. That was when our name became “gold” in the commercial lending world. We attribute a lot of it to our determination to never default on a loan. Most important, we learned how to plan better to cope with sustained economic downturns.
Don't base a final price on an early estimate.
AN IMPORTANT LESSON ABOUT PRICING. One of our most successful projects—our first villa community—could have been a fiasco. We were building single-family homes in a country club community when we saw an opportunity to build multi-family villas in a highly attractive price range that was being ignored by the other builders.
As we excitedly finished the designs and started the infrastructure, the sales department quickly pre-sold over half of the units at pricing based on early estimates. Oops! By the time we finished the plans and priced out the units, we realized those first buyers were getting a remarkably good deal. Fortunately, we were able to adjust pricing for the balance of the homes. Today, that project remains one of the most popular subdivisions in that country club.
SOMETIMES LUCK STEPS IN
During the recession of 1989–1991 we had to pay interest on lots we had purchased in Admirals Cove. Just as our checking accounts were nearing empty, a client bought one of those lots and decided to proceed with our home design. Ron worked as the site superintendent, something he had not done for us before (although he had been managing our site superintendents for years). The profit from that construction project, plus the interest from small loans we had made in previous years, helped feed our families until the market rebounded in 1991.
Our one-on-one skills have been crucial to our success.
RECOGNIZE YOUR LIMITATIONS. A builder might build ten or twenty homes well. Yet one additional home may be just too much to handle—and can put all of the other homes at risk of not being done well.
In the early years, we personally handled existing and prospective clients and tenants on a daily basis. As our tenants grew into the thousands, we brought in middle management to deal directly with clients and tenants.
Lucky to be in Palm Beach County at the beginning of its meteoric growth. Lucky to have such wonderful and appreciative clients. Lucky to have an excellent team of co-workers, the true stars of our companies. And lucky to work alongside other members of a family in which fundamental concepts like trust, reliance, and intuition are simply axiomatic.
Every now and again, luck took a holiday.
However, every now and again, luck took a holiday. And despite all the associated stress, anxiety, and fear of a term in debtor’s prison, those situations proved to be some of the best learning experiences of our careers.
If you're a successful luxury home builder...
STICK TO WHAT YOU DO BEST. Be it due to timing or luck, we had exceptional results with our first high-end spec homes and luxury home subdivision; then we completed and leased the first buildings in our new industrial park.
Perhaps there is a wee chance that our strong start led to some undue confidence—we were sure there was little we were not capable of when it came to residential or commercial construction. So off we went to develop a small shopping center and a 76‑unit project of lower-priced townhouses. The shopping center was a hit. The townhouses? Not so much. After each phone call from the sales staff announcing a new full-price sale at $69,900, we would look at each other and say, “Yay. We only lost $8,000 on that one.”
That is how we learned that if you are a successful custom luxury home builder, perhaps you should stick to doing that. Tract-style building is a totally different enterprise, and not for us.
Do all your homework, every time.
NEVER TAKE ANYTHING FOR GRANTED WITH A HOME DESIGN. Once, we bought a beautiful one-acre lot and borrowed an extremely successful floor plan from a Miami builder to build a spec home. We changed the exterior of the design and started construction.
It was not until the trusses went up that we realized the ceilings were only nine feet high and flat. That may have been acceptable in Miami but it was a terrible idea at a time when lofted ceilings were the norm in our county. Some quick changes to the trusses added height to a few areas, but would that spec home sell? We were worried.
Luckily, a couple fell in love with the large lot and bought the home. But the lesson was learned—never, ever take anything for granted in design. Do all your homework, every time.
We determined to never default on a loan.
LESSONS TAUGHT BY RECESSIONS. There is nothing like a prolonged downturn to remind one of alternative paths that might have been taken.
The recessions of 1989–1991 and 2006–2014 were hard to weather. Because we had always believed in diversification, we had interests in both residential and commercial real estate. At the beginning of the 1989 recession, we had a diverse set of commercial tenants in our industrial buildings—or at least we thought we did. One year later, as many of them left for home offices because they could not afford rent, resulting in massive vacancies, we noticed most were businesses that depended on a booming construction industry.
We learned many lessons during that recession, and one of the best was never to rely heavily on a single industry when leasing buildings. During those recessions we made loan payments out of pocket when needed and did our best to accommodate our tenants. The 1989–1991 recession lasted only two and a half years, but it felt like a hundred!
By 1991 the banks looked for developers and builders who were still standing. That was when our name became “gold” in the commercial lending world. We attribute a lot of it to our determination to never default on a loan. Most important, we learned how to plan better to cope with sustained economic downturns.
Don't base a final price on an early estimate.
AN IMPORTANT LESSON ABOUT PRICING. One of our most successful projects—our first villa community—could have been a fiasco. We were building single-family homes in a country club community when we saw an opportunity to build multi-family villas in a highly attractive price range that was being ignored by the other builders.
As we excitedly finished the designs and started the infrastructure, the sales department quickly pre-sold over half of the units at pricing based on early estimates. Oops! By the time we finished the plans and priced out the units, we realized those first buyers were getting a remarkably good deal. Fortunately, we were able to adjust pricing for the balance of the homes. Today, that project remains one of the most popular subdivisions in that country club.
SOMETIMES LUCK STEPS IN
During the recession of 1989–1991 we had to pay interest on lots we had purchased in Admirals Cove. Just as our checking accounts were nearing empty, a client bought one of those lots and decided to proceed with our home design. Ron worked as the site superintendent, something he had not done for us before (although he had been managing our site superintendents for years). The profit from that construction project, plus the interest from small loans we had made in previous years, helped feed our families until the market rebounded in 1991.
Our one-on-one skills have been crucial to our success.
RECOGNIZE YOUR LIMITATIONS. A builder might build ten or twenty homes well. Yet one additional home may be just too much to handle—and can put all of the other homes at risk of not being done well.
In the early years, we personally handled existing and prospective clients and tenants on a daily basis. As our tenants grew into the thousands, we brought in middle management to deal directly with clients and tenants.
