Residential redevelopment excites us in so many ways. We love what we do! There is nothing more exciting than finishing a property and seeing a family move in to cherish it for years to come. It feels good to make such a positive impact to local families, neighborhoods, and communities in which we live and work. This blog was started to share our journey through some of our redevelopment projects to inform and educate others on what we do. Follow us on this blog and at www.iHeartRehabbing.com for regular updates on our current projects and an inside look at the progress.
Deciding what I wanted to be when I grew up was probably one of the most difficult decisions that I had to make in my young adult life. I knew that obtaining a college degree would provide me with the most opportunities in the future. The tough part is knowing that once you start going down a particular path, you’re pretty much locked in. Your choice in professions determines which college you should attend and classes that you need to take in order to satisfy the requirements for your degree. It’s scary to think that this decision could end up locking you into a particular path for the rest of your life.
I suppose that I had a entrepreneur mindset early one. I struggled with this decision and wrestled with what career would provide me with the most satisfaction throughout my life. I decided that I wouldn’t do something just for the money. I didn’t want to spend the working days of my life waking up and going to a job that I hated. I had a passion for helping people, and my personal evaluation led me into pursuing the field of special education. My college career began at the Harrisburg Area Community College where I took the general education classes that I would need before transferring to a four year school to finish my degree. That was the plan, but of course plans change…
When I was attending West Perry High School, I had the opportunity to take courses to become a Cisco Certified Network Administrator (CCNA). Computers had always interested me and I appreciated the opportunity to understand the interconnectivity and communication from one device to another. It was also an opportunity to gain some experience to fall back on if I suddenly decided to move out to Silicone Valley. While I enjoyed the CCNA program, and ultimately became certified, I really enjoyed my Turbo Pascal class much more! It was incredibly gratifying to write code and watch the computer execute my commands.
As most college students do, I was working part-time. It was more like full-time with four different part-time jobs. One of my part-time jobs was with a regional grocery store chain. I worked in the 90,000 sqft store in several different capacities. This not only gave me the opportunity to be scheduled for more hours, but it was an opportunity to learn a little bit of everything that was happening around the store. I would build promotional displays, breakdown the nightly delivery truck to prepare it for stocking, jump on a register as a cashier, work in the dairy department stocking and rotating product, and work on special assignments from management. I was told at one point by one of the managers that I was welcome to come in anytime to work because I was always productive and found something that needed to be done.
I would regularly browse the job postings that were in the break room to see what kind of positions were available at the corporate headquarters. I had come across a listing for an internship in the Information Systems arena. I had the CCNA certification from the program in high school and I was taking college courses, so I figured that I had a pretty good shot. I figured right. This was only a six month internship, but my plan was to do my best to remain at the office and not go back to working in the stores. When I asked my manager if I should turn in my uniform shirts, he said “keep them, you’ll be back.” That was fuel for my fire to ensure that I succeeded. I wouldn’t be back…
The internship experience was much like my store experience in that I was able float around and experience the different IT departments in the office. I was like a sponge soaking up as much information as I could. I took full advantage of the opportunity and always worked the optional 40 hours a week. It was definitely an awesome experience to see how the support office interfaced with the stores and how new technology was implemented and trained. There are also polarized perspectives. The stores feel like the support office is out of touch with their needs and that they sit in the “silver palace” without a clue. The office associates feel like the stores are slow at adopting new processes and make their lives complicated by resisting change. All that I knew is that at the conclusion of the six month internship, I wanted to be on the office side of the organization.
Desperate to find a full-time position, I was willing to take any opportunity to simply get my foot in the door. There was an opening in the mailroom and I applied for the position. When I was contacted by the HR manager explaining that I did not get the role because I was overqualified, I was extremely disappointed. However, she quickly followed up with telling me that I would have been bored and that she had a different position in mind for me. Needless to say I was thrilled and surprised. The surprising part is that someone took notice of my ambition and they took the time to help me find the appropriate direction that would set me up for success. I am grateful in so many ways for the opportunity that I received and individualized attention that I received from that HR manager.
The role that she had in mind wasn’t higher on the pay scale than the position in the mailroom, but it gave me the chance to continue to hone my skills and build rapport in the organization. I was hired as the administrative assistant for the retail strategies and pricing director. One of my primary roles was a taking the competitive price checks and chart them across our different market areas and departments to benchmark our indices against our primary and secondary competitors. This information was then passed along to the merchandising teams and the executives. As I performed this duty, I discovered that it was an extremely manual and arduous process. It was also a fairly short sighted look into the data. Everything was being aggregated by department and market area, but we were receiving the information at a store level by SKU on a hardcopy report.
This became my first real project where I could make an impact and improve our insights and analysis. I only had a small introduction into programming in high school and no relational database experience, but I knew that I could doing something if I could receive the data contained in these reports electronically. At the time, the company was what I would call a mid sized retailer. We had just under 200 stores. My idea was to create a data repository with a user interface so that the merchandising teams could slice the data by any competitor or group of stores. They would also be able to drill into the department to see the category, sub category, and segment level indices based on their selections.
I didn’t really know where to start. I just knew of Microsoft Access which had the database and UI functionality all contained within a single instance. No one else in the company had spent much time with using Microsoft Access, so I purchased a book and began teaching myself during the downtime that I had throughout the day. There were definitely moments of extreme frustration and doubt that I would be able to figure out what I had set out to accomplish. After all, I didn’t have anyone else that I could talk to. All that I had way my book and a few sparse forums on the Internet.
The good news is that I was able to do what I set out to do and the competitive pricing application was well received. I began seeking other opportunities to convert manual paper processes to a digital format. The conversions improved productivity through input validations, integration of known information, and the electronic transmission of data. An example of one of the solutions was a report that we used to email to all of our stores on a weekly basis. The report was a large file and the stores had to filter through the document to find the information that was pertinent to their particular store. I developed a program that would parse the data, create a store specific file, and automatically email the stores their individualized report. I can still feel the excitement upon successfully executing this program.
Merchandising Systems was born. I had gone from a store associate to an intern to an administrative assistant to a merchandising systems analyst. The merchandising systems analyst was a brand new role created specifically for the work that I was doing within the organization. This is an example of entrepreneurship within a multi-billion dollar company. Identifying a need and working to fill it. I have been fortunate throughout my corporate career to rarely hold a “job” where I would repetitively do something day in and day out.
Needless to say, my aspirations for continuing my higher education in elementary special education dwindled. I had a taste of the business world and I was hooked. While it is significantly different, I was helping people and improving their day to day work-life. I could positively impact people and the bottom line through software at a magnitude that I could have never imagined. I was fortunate to be in the right place at the right time with the right background to grow within a company during this evolution into a digital world. Gone were the days of mainframe reports piled on desks and filling up filing cabinets. All of the information that associates needed was available on their desktops in a clean user friendly interface with dynamic views of the data. I eventually grew the merchandising systems department of one to a team of 22. We moved from Microsoft Access to more powerful database servers and .NET for application development.
We were highly innovative and focused on the user experience and productivity. The amount of time and money that the merchandising systems department saved in man hours by automation was equivalent to hundreds of workers and hundreds of millions of dollars that would have been required to complete the work in the past. Not to mention the increased opportunities that and business growth that resulted from our solutions. I like to believe that I would be a millionaire from the solutions that I helped to implement and think about what I could have done differently. Unfortunately, if I were a third-party consultant, I wouldn’t have had the insight to the opportunities that helped me to grow the team that I grew within the company.
I am an entrepreneur and I always have been. I have now had the opportunity to work within a fortune 500 company and leave a legacy that will continue on long after I have moved on to my next venture. I am now working in the capacity of a Business Consultant within the organization. It’s a gratifying experience to be able to walk the floor of the office and see the tools that I built being used to drive the company forward and helping to make people’s jobs more enjoyable, productive, and rewarding.
I am currently in the midst of a deal that I am very excited about! Upon settlement, I will have control of a building that is in excess of 217,000 sqft with strong positive cashflow at approximately 80% occupancy. The building is used as a dry storage facility. It does not have any climate control, so the merchandise contained within the building cannot be prone to freezing.
The ultimate plan is to redevelop the property as mixed use residential, office, retail, etc… The building is three stories high and zoned as CBD (Commercial Business District). This is the ideal zoning which will allow the first floor to be comprised of office space and retail allowing the second and third floors to be residential. There is going to be quite a bit of work ahead once we reach closing. My plan is to take ownership and then take a few months to stabilize and get my bearings around the existing revenue generating businesses.
The structure itself is red brick, steel, and concrete with old pine wood flooring. It was used as a manufacturing facility for many years before being converted into the current use. The building materials lend themselves as the perfect canvas for some very unique and elegant feeling apartments. I can easily envision spaces with large industrial style windows, fourteen foot ceilings, exposed brick walls, wood floors, and industrial style HVAC systems. The layout allows for an abundance of light. I feel that the floor plan design could be a little tricky, but I have confidence that a good architect and designer could determine the be utilization of space without sacrificing the historical charm of the building. Of course, I do have a contingency plan of continuing / growing existing storage functions in the event that the redevelopment plans become too cumbersome of a hurdle.
Before any of the design plans can get underway, I need to get to closing and ensure that I am making a solid business investment. below are some of the things that I am gathering throughout the course of due diligence.
– Elevator maintenance
– Snow removal
– Security deposits
– Roof maintenance
– Trash removal
– Test control
– Hazardous waste removal service
– LP (liquid propane) service
It is extremely important to review any contracts that are currently in place because they will most likely come with the sale of the building; unless there is language stating that they are non-transferrable or contain some sort of cancellation clause. You do not want to get stuck with a bad contract or one that you can’t live with. It is important to review these contracts before the expiration of your due diligence period so that you can negotiate any disagreeable terms with the seller.
Building / business documents to ask for:
– Leases / operating agreements
– Roof warranty
– Mechanical issues
– Elevator permits
– Environmental consulting (environmental discovery)
– Building and fire code violations (get from municipality)
– Building permits
– Financial records (ie. aging reports)
– Insurance and declarations page
It is always a good idea to ask for more than what you think that you will need. Carefully review all of the leases for any kind of cancellation clauses, tax agreements, or rent restrictions that may impact your plans following the acquisition. One of the documents listed includes the roof warranty. Was the roof recently installed? If so, it is most likely under some kind of warranty. Make sure that you are persistent with getting this information because roof issues can lead to some extremely crippling expenses.
Aging reports are helpful to gain insight on whether the rents are being paid and which tenants may be trouble for you in the future. Unfortunately, you can’t always trust the seller of a property to provide you with accurate information. Additionally, if you are financing the purchase of the building, then your lender may require you to provide rent payment history reporting. Speaking of financing, ensure that you have a complete list of everything that the lender will need in order to close on the building. You will not want to wait until the days leading up to closing to realize that you’re missing a vital document. This will delay closing and add unnecessary stress to the transaction.
The insurance and declaration page is something new that I have added to the list. The building involved in this particular deal has a very high insurable value. It has made obtaining a policy a little more complicated than usual. I am looking to obtain the contact information and insurance terms under the seller’s current policy. Perhaps the property is currently under insured, which will impact the overall P&L and the CAP. In any case you will always want to make sure that any property that you own is insured properly. Understating the value could have major implications in the event that you ever need to file a claim. You could end up getting nothing from a policy that you had been paying into for years if you’re not honest.
There is a lot involved with the due diligence period. The broker that you are working with should be knowledgeable in the areas of real estate that you are investing in. You may also wish to hire a real estate attorney to help review the leases, contracts, and overall deal. Regardless of who is on your team, I would recommend becoming educated yourself. This will help you to ask the right questions of your team and to ensure that they are qualified. I recommend reading the following book: The Due Diligence Handbook For Commercial Real Estate: A Proven System To Save Time, Money, Headaches And Create Value When Buying Commercial Real Estate. It is available on paper as well as audio and it is a very quick read. Investing an hour of your time could save you thousands of dollars on your investment.
I would love to hear from you about your real estate endeavors. What other information do you ask for during a due diligence period? What went right? What are some opportunities and areas that you will improve before making your next deal?
Like it or not, who you are to some extent begins with your parents. If that’s bad news to you, then the good news is that you are not your parents and you can control you own life. Take the good and learn from the bad.
My mother and father grew up in a fairly depressed area of Northern Pennsylvania. Long before they were born, the area was known for manufacturing and coal. That boon came and went and now people are simply trying to get by. My parents recognized that they did not have very many opportunities if they stayed, and they wanted more for their eventual family. So they decided to move away in search of better employment and quality of life. They headed to South Central Pennsylvania and settled in the suburbs just outside of the Harrisburg area. The rolling hills of Perry County was going to be their new homestead. My mother and father moved into a trailer sitting on the land where they would eventually build the home that I grew up in. At this time, you had to save a 50% downpayment to build a house and interest rates for loans were upwards of 15%.
Both of my parents began their careers working for the State of Pennsylvania at the Liquor Control Board. My dad would go on to hold several different positions within the State Government before ultimately retiring. My mother had a break in her career to raise my brother, sister, and I then later returned to the Liquor Control Board where she ultimately retired.
My parents have three amazing children, of which I am the middle child. We were, what I considered, a pretty average middle class family. Both of my parents worked hard to provide the necessities and even the luxuries, like braces for our teeth and a private education in a Catholic School. We had a comfortable three bedroom ranch house with a huge yard to play in as kids. The only struggle was the one bathroom that the five of us had to share.
Previously I mentioned that my mother took a break in her career to raise the family, but in reality it wasn’t really a break. She worked even harder during that time and, looking back, my parents made a lot of sacrifices for the things that I took for granted growing up. My mother gave up her 8-4 office job to be at home for us when we got off of the bus and to volunteer at school functions. At night, after my dad would get home from work, she would head off to her part-time job working at the local pizza shop or Hill’s (the now defunct department store chain).
I don’t tell my parents often enough, but I have a lot of admiration for their hard work and dedication. Perhaps that’s were I get my work ethic and unyielding desire to achieve. I know that my childhood was far from rough in comparison to others out there. I believe that it is because my parents took the initiative to give my siblings and I opportunities that they didn’t have. Had they stayed in their hometown, I can’t imagine where I would be today.
We all come from somewhere. While my childhood was not filled with seemingly insurmountable adversity, I didn’t grow up with the proverbial silver spoon in my mouth. My parents were not business owners and their approach to finances was to simply save money in bank accounts and IRAs, which is what we are all told to do. We are told to do well in school, go to college, and get a good job working for someone else. Check, check, and check. I have done all of those things and I know that there is more out there…
Regardless of our upbringing, we can become whoever we want to be! The struggle that we all face is going against the grain. Surround yourself with people that add value to you life and share similar dreams and aspirations. That’s the purpose of this site. We can all help one another succeed and break through the barriers of norm that we are surrounded by.
Anxiety runs high on the first day of doing something new. Think back to the first day of school every year, moments before a competition, or your first day on a new job. You probably don’t sleep well as you lie awake in bed with countless, and often meaningless, scenarios of how the day will go running through your head. Let’s face it, starting something new is downright terrifying!
These feelings were not a part of my first day of entrepreneurship, however. It’s safe to say that I really didn’t know what I was starting. It just seemed to be a natural and happened organically. I didn’t ever consider putting the title of business or entrepreneurship on it until now. As I reflect back on how I was first introduced to a world of entrepreneurship, this moment is it.
The setting is sometime in the early to mid 90’s. I was a tall and fairly uncoordinated middle school aged kid. As you may recall in a previous post, I grew up in a rural area and attended Catholic School. This is important to note for a couple of reasons. One there wasn’t a lot to do when I was a kid. I didn’t grow up in a city or neighborhood where you could simply walk to a friend’s house or even ride your bike. My friends were generally a 15 minute drive, or more, away. This meant that my brother and sister would often be the only kids around to play with.
My brother is a little over 5 year older than I am. So by this time he was in high school and we didn’t really have a lot to relate to other than the Boy Scouts and the fact that we shared a bedroom growing up. I was always just a bit too far behind in age to be cool enough to be included with him and his friends. As I started high school, he was making his way off to college. Always just a step behind.
My sister is 2 years younger than I am. We had the complete opposite relationship than what I had with my brother, because my sister actually thought that I was cool. Rather than try to compete for my brother’s attention and try to keep up, I simply hung out with my sister more often. With that came, what I will call sacrifices, where I would be obligated to play doll house and My Little Pony. Embarrassingly, I had the only male My Little Pony, Texas Pete, so that I didn’t have to play a girl pony. This may seem like irrelevant information, but it will soon make sense, I promise.
Spending time with my younger sister introduced me to things that I would not have otherwise been interested in doing. My mom encouraged us to be creative and crafty. We had what we called an “arts and crafts cabinet” in the basement which was always fully stocked with construction paper, glue, popsicle sticks, wiggly eyeballs, etc… it had everything that you needed to come up with some pretty spectacular creations.
At one point we really got hooked on creating jewelry using those little plastic beads. We would test out the different threads that would be easy to thread through the beads yet durable enough so that they didn’t easily snap, which would leave beads scattered all over the floor. There would be shopping trips to the bead aisle at our local Ben Franklin Arts store, where we would look for the shiniest and most colorful beads. We even had containers with partitions that wouldn’t let your beads mix, unless you accidentally turned the container upside down which resulted in hours of sorting. This happened quite frequently.
I would be threading beads almost every chance that I had. The bus ride from our rural home to school ranged from 2 1/2 hours when I was in kindergarten to a little over an hour at this point in my life. The difference in ride time is that my mother complained to the school district enough to get dedicated bussing for the private schools “over the mountain.” Mom would always go to bat for us, and she still would. When I was in kindergarten, I would catch the bus at 5:15 in the morning and be driven all over the county. First one on and the last one off. I’m sure that there are those of you reading this that can relate!
These bus rides were the perfect time to sit and make jewelry. This was before cell phones and the plethora of mobile entertainment devices. Granted there were Gameboys and Sega Game Gears, but those were the kind of luxuries that my parents didn’t want to spend their hard earned money on. The only portable device I had was a Walkman which was eventually upgraded to a Discman. A Discman was a portable CD player for those that don’t know what I am talking about. “What’s a CD,” you ask? Yikes. It is hard to believe that technology has evolved so quickly.
One day while making beaded jewelry on the bus, a girl asked me if I could make her a bracelet. I said yes, but she went on to say “I can pay you for it.” Suddenly, the inner monologue began playing out. I would have just given her a bracelet, but she is willing to pay me for it? If I can get a couple of dollars, I would be able to buy more beads and make even better jewelry, which I could turn around and sell for more money. This was all very exciting to me! Also, we weren’t really friends or anything so I said sure and we negotiated a price of a couple of dollars.
This continued for a while. I was making “custom” beaded jewelry on the bus and selling it to the other students. Eventually, I had saturated the limited market, so I began making keychains and other crafts.
From crafts, I moved on to candy. My parents had a membership to one of those club stores where you can buy a huge bulk container full of candy for much less than you can buy pieces candy individually. I would have my parents pick up Airheads and Now and Laters in bulk. I had a silver metal tin container that I would fill with candy and take on the bus with me. I would sell the candy for ten cents each or three for a quarter. I would sell a few dollars worth everyday and the good news was that the demand was always there for more candy. I was the candyman through the remaining years of grade school and gave it up when I started riding the bus to high school.
Even though these are examples at the tiniest level and no one would be able to support themselves with these activities, they got me excited for business and gave me a little bit of walking around money at a young age. It was in those very moments that I began to understand the very basic mechanics of business. I just didn’t know it at the time.
I feel like I was fortunate to have accidentally fallen into this learning opportunity. I often wonder how we can teach children these lessons at a young age to plant the seeds of entrepreneurship. Give them the power to be creative and find opportunities to not only make money but be innovative in identifying needs.
Can you remember your first lesson in business? Was it organic or did you have a mentor? How are you using what you had learned through that experience in your life today?
Do you ever get the feeling that you’re making things more difficult than you need to? It’s like analysis paralysis, except worse. Worse because there is such a fog that you can’t even think of were to begin. This has been my story for this blog for years! I wanted to start, and did a few times, but became very fragmented about what I was trying to accomplish.
In this moment, I finally have a moment of clarity on how I want to move forward. I am typing as quickly as possible so that I don’t lose this train of thought and end up back in the thick fog.
A couple of important bits of information to provide to create some context. I am employed by a major corporation and have been working in this corporate world for a little over 15 years as of writing this post. I currently own two profitable, but small businesses and co-own another small business. I am not at a point where I feel as though I have broken through the barriers to success.
With those bits said, this leads to my primary purpose of this blog. There are countless publications and books about the world’s most successful entrepreneurs and leaders. These successful people recount their struggles and journey to where they are today after the fact. Though their stories are empowering and inspirational, I believe that they are leaving out the most painful details of their journeys. This is probably inadvertent on their part because we all have a tendency to suppress our worst experiences. Think a failed relationship for example…
Anyway, my purpose for this blog is twofold. I want to document my journey so that I can capture those heart dropping lows and the heart stopping highs of making my way through the trials of successful business ownerships. The second purpose is to help other people along their journey. This is a public forum and I encourage questions, comments, thoughts, and celebrations! There are so many things that I have experienced and I want to hear about all of your experiences in business, ideas, and desires. I am here as a resource and I’m sure that there are plenty of other people that will also lend a hand.
So this is finally it! I can finally see clearly and I’m extremely excited about this journey and the roles that all of us will play. In case you didn’t notice, you’re already part of the team because you’re reading this.
The first thing that we need to do is just take one step forward. Mine was starting this blog and getting the first post published. Take a step by commenting below about one thing that you have done that is entrepreneurial. I’m excited to take this journey and I’m happy to have you here by my side!