|
What if you woke up one morning and decided you wanted to
do something you had never done before, in an area you had no expertise, with people you didn’t know and you wanted to spend
your life savings? Usually you can count on your family and friends to talk you out of such nonsense.
The first thing
I did was talk to my wife and ask her opinion. After all, I was going to put our future at risk. Surely she would talk me
out of this momentary lapse of judgment. Unfortunately she responded that if that was what I wanted to do, she was all for
it. Then she had the nerve to ask how she could help! Where was my logical spouse? Where was the person who I counted on
to ensure I didn’t make foolhardy decisions? At this point I started to suspect that she was just trying to be supportive
hoping that I would come to my senses.
My next step was to call my parents. Surely this conservative couple would
bring some words of wisdom to the table and talk me out of risking my life savings on a mid-life change. After my father
questioned what type of property I was going to buy and how I was going to operate the business, he said that it sounded like
a great idea. My mother wanted to make sure I wouldn’t work too hard. Well, so much for the parents coming through with a
reason not to do this project.
At this point I was getting in deeper. I needed someone to talk me out of this entrepreneurial
venture. The next call was to my in-laws. These two highly educated people would certainly be able to show me how illogical
this idea was. After about an hour explanation of what I wanted to do and how I planned to proceed, the two of them said
to go for it. What type of help and support was this? How could they risk their daughter’s future? What were they thinking?
My
brother-in-law in California was next. He would surely not allow me to make some terrible mistake. After all, he's older
and supposedly wiser! I made it clear that I wanted his honest opinion (i.e. tell me not to do it). He explained that he
had confidence in me and that he was there if I needed anything. At this point he even discussed some similar ventures on
the west coast that were going on and felt it was a great idea.
I had only a few more places to go to for some much
needed help. It was time to bring in the big guns. My brother was the next call. To give you an idea of his sense of humor,
I had called earlier in the year to inform him that I had named him my backup on health issues in case of an emergency. He
waited about a week and called me back to inform me he had been practicing for this important role. Totally confused, I asked
what he had been doing to prepare. He informed me he had been sitting beside a table lamp and was practicing pulling the
plug! Now this is the type of honesty I was looking for to back me away from the edge. After the same explanation, he informed
me that he was in support of my idea.
Fearing a conspiracy in the family, and checking to make sure no one had upped
my life insurance policy recently, I only had one idea left. Friends who I have known for a long time and who would have
to put up with me if I screwed this up were called in. Each contact was met with the same unsatisfactory response. Comments
such as "great idea," "how can I help," and "it will be great," dashed my final hope. I was in too deep. Everyone now knew
of the idea and was supportive. I felt like a man being walked to the gallows.
The only hope was that I wouldn’t
find a building. The next week a friend and I were out to lunch and drove by 525 King Street. "Right there," he said. "This
is the project you're looking for. You have to buy this building." Just great, now what was I going to do? The only choice
at this point was to take the plunge. Buy the building and see if I could make the ideas that I had been discussing with
family and friends actually work.
The point of this story is to tell you how I finally reached the decision to buy
and develop property, and it would not be complete without pointing out all of those good souls who took pity on someone who
didn’t know what he was doing and didn’t even know what questions to ask.
• I had a general contractor who was
patient and understanding. He paired me with a veteran of construction, and they helped me through the 525 King Street project
as well as others.
• I had an architect who constantly tried to improve on designs and reduce costs.
• I had
subcontractors who would make suggestions on how something might be done better and more economically.
• Brokers, property
managers, city officials, and friends all pitched in to keep me positive about the project.
At this point you might
wonder why everyone was so supportive of my game plan. My strategy was and is as follows:
• 1st: Buy property
that needs to be remodeled but that is structurally sound. This allows for more upgrades in the property.
• 2nd: Do
not take on any partners. The decision making process is easier if you have to make a hard call. Just do the right thing
whether or not it is the best financial decision personally.
• 3rd: Invest in the property as if you were going to
hold it for the rest of your life. The decision making process is easier and if you do it right the first time, it will be
cheaper in the long run.
• 4th: Lease the property at significantly below market rates. Tenants need to be profitable
to stay in business.
• 5th: Treat the tenants as you would like to be treated.
In order for this concept to
work, I needed three promises from those individuals who leased the property:
• To treat the property as if they
owned it. This helps keep the property in the best condition. It also reduces ongoing costs.
• To communicate with
me regarding any problems. If one exists, then it is better to find out and deal with it immediately.
• To pay their
rent on time. This ensures a steady stream of revenue. Since the properties are leased at a lower-than-market rate, there
will be fewer vacancies.
As far as the company name goes ... when I first started out, I was working with an attorney
to incorporate the business. They were ready to file the papers of incorporation for me, but the attorney called to say that
the paperwork was done but I had failed to give him the name of the company. I looked around trying to quickly think of an
appropriate name, and a gift from my mother-in-law caught my eye. It was a paperweight from Alaska, and on it was inscribed
“If you are not the lead dog, the view never changes." At the same moment, my keeshond puppy Dr. Watson starting barking
and running around as if he had something to say. From that day on, the company became known as Lead Dog, LLC. The image
on the first page of this website is of Dr. Watson on the beach of Seabrook Island.
Thanks to everyone for their
help.
Alan St.Clair
|
