from Florida Realtor Magazine, September 2007 | page 52
How to Develop a Dynamic Niche
By creating unique projects and seeing potential in unlikely places, this broker built a flourishing business enterprise.
When I arrived in New York City from Brazil in 1972, I was 23 years old and wasn’t sure what career to choose. I married my wife, Ana, in 1975, and a few years later we had two children to support. By 1990, my family and I had relocated to Orlando and I discovered that the real estate industry had much to offer. So, I got my real estate license and founded EC Realty Network Inc. in 1992.
As my assistant in the office, my wife, Ana, was instrumental to my success.
I was among the first real estate professionals to bring the concept of commercial condominiums (office/showroom/warehouse) to Central Florida.
It all started in 1996 in Brazil, when I advertised a workshop on how to invest in the United States. I acted as a consultant to one of the participants, Norberto Duarte, now owner of Norbridge Properties in Orlando. We decided to concentrate on commercial condos along the area’s then-up-and-coming International Drive.
I assembled a team of contractors, architects, engineers, surveyors and environmental companies. With the help of a small community banking institution, we went on to introduce one successful commercial condo project after another.
Here’s my strategy:
1. Find and Fill a Need Back in 1996, it was difficult for small businesses to find affordable space to purchase, much less vacant land on which to build an office or warehouse. Our concept involved building a commercial/industrial office/warehouse condominium in a very desirable location. In a single, upscale-designed building, we combined an office mezzanine, showroom, warehouse, with both dock high and ground level access. This made it possible for people to buy one unit of space and split the maintenance costs with the other building occupants. With 10 percent down, they could own for less than they would pay to rent.
Our first project was the South Star Service Center in Crownpointe Commerce Park, off Sand Lake Road and John Young Parkway. We bought five acres of land and built a 70,000-square-foot warehouse condo facility. It was composed of 10 warehouses of 5,000 square feet each that we sold for $70 per square foot for shell space. (We built a 20,000-square-foot central office building at the entrance of the center.) The absorption rate was so high that by the time we finished building, we had almost sold out.
2. Build Your Reputation When I approached a lender to finance my first project, I had to put 50 percent down. People want a proven concept. When they saw that we finished and sold everything, the next time we requested financing our down payment was lowered, and they were willing to lend us more.
It’s important to find a loan officer who understands your business and goals so that he or she can be your spokesperson before the loan committee. We developed a relationship with a loan officer and followed him when he changed banks due to mergers (very common in the banking industry). When you pay off one loan, you open another line of credit for another project. The first loan officer who believed in our project back in 1996 is still financing many of our current projects.
Even if you purchase just one income-producing property per year, at the end of 10 years you will have at least 10 properties.
3. See the Possibilities My strategy was never about creating a huge company with many sales associates. By 2002, I terminated my consultancy work with Duarte, who was busy building new office/warehouse developments.
My next condominium project, Oak Tree Plaza, contained 11,000 square feet of space divided into 11 stores of 1,000 square feet each, which was sold out by the time we got the certificate of occupancy.
Next, I found two more investors and started buying existing buildings to convert into condos. Among these projects were: Goldenrod Business Plaza, Pine Flex Center, Cypress Park East, West Colonial Plaza and South Orange Medical Center, which we converted to office medical condos. At that time, the plaza was a little distressed, so we were able to buy it for a good price. The ideal situation existed when you could buy a building for a lower price because of vacancies and then convert it and sell it as individual units. Now it is very difficult to find a property meeting this criteria, as the owners or their listing agents are often converting the property themselves.
4. Continue Breaking Ground Another contributing factor to success is the ability to find potential where others see a dead end. My last and current conversion is the Alliance Business Center (www.alliancebusinesscenter.net), a former 200-room Best Western Hotel that I converted into a business center with 120 office condos. We rent each unit for only $750 per month or sell them for $ 90,000 each. We renovated the entire property, located near the entrance of the high-traffic Florida Mall, with a business storefront, ceramic tiles and granite counters, and we have conference rooms and a restaurant with live music on site. We kept and renovated 70 hotel rooms to support the center and its occupants who might have out-of-town guests needing accommodations.
When people see what you’ve accomplished, they think you’re lucky. But luck happens when preparation meets opportunity. I simply saw a niche and found a way to fill it. However, there comes a time when everybody catches on, and what was a niche yesterday might not be a niche today.
Enio Carvalho is president of EC Realty Network Inc. in Orlando. Originally from Brazil, he is fluent in Portuguese, Spanish and English, and he works with international clients and customers.