Tuesday, February 15, 2011

Solid Oak Enterprises - A Real Estate Contrarian

Entrepreneurial ideas come from a variety of places – in some cases the inspiration for a great small business comes from stampeding away from the herd. Gary Caldwell started his family’s small business based on a simple premise: “If you do what 98% of the people won't do or don't do,” Gary says, “You can come out ahead.”
So what type of business, in one of the worst markets in decades, did Gary and his son, along with their spouses, start?
“We’re a real estate investing company in the Tulsa, Oklahoma area,” he says. “We buy properties, rehab those properties, and put them back on the market. We also wholesale properties, finding a property for another investor to purchase. We also set up lease options, we purchase rental properties… this year alone we’ve already done twelve properties, and we have several other deals closing soon.”

Solid Oak Enterprises is off to a great start. That might seem surprising since while Gary has significant business and management experience, his prior real estate background was limited. He holds a Masters in Financial Services along with an MBA, and had been in management his entire career.

“After sixteen years with the same company,” he says, “I was downsized because the new CEO brought in his own team. We moved to Oklahoma and I took a management position for a Fortune 500 company… and four years later they closed the doors on the operation. That was my second experience not having a ‘home.’
Before he lost his job, he gave his son – a senior in high school at the time – the book Rich Dad, Poor Dad. “He was always a good student,” Gary says, “And he not only read it, he totally absorbed it. And he said to me, ‘Dad, we’ve got to do this. We’ve just got to look into this.’ And so we started planning. Losing my job made me even more committed to working for myself, since running my own business had been a lifelong dream, and by February 2008 we were ready to incorporate and move forward.”
Moving forward meant building a team. While Solid Oak Enterprises only has four employees, the entrepreneurs set up what they call their Power Team: A real estate agent knowledgeable about investors; an attorney specializing in working with real estate investors; an accountant; a contractor who can work on several homes concurrently; and others. “We have people that do our yard work,” says Gary. “We have a licensed firm to do our heat and air, a licensed plumber, and so on. It’s a large team but we have people we trust who do jobs well for a good price – it’s a win-win for all of us.”

Moving forward required small business financing. “You know,” says Gary, “You watch the gurus late at night and they all tell you to get into real estate and make millions with no cash out of your pocket. That’s bull.” Recognizing they needed capital, the entrepreneurs turned to Guidant Financial Group for help investing retirement funds in the business.

“It takes money, Gary continues, “And the timing was right. We knew if we were going to succeed we needed to be committed. We needed capital to get started, and we made the right choice in how we financed the business.” Moving forward also required a focused strategy. While conventional wisdom assumes real estate is a depressed and volatile market, the entrepreneurs instead saw opportunity. “We focus on single-family residences in Tulsa,” Gary says. “We plan to expand, but that’s the market we know: Our economy is relatively strong and the houses in our targeted profile market are moving. They sell. We still have our share of foreclosures, but we have plenty of buyers. And we network like crazy, working with investors on the West Coast who understand the opportunity because our market is stable.”
In fact, Gary sees not only stability but growth in the Tulsa real estate market. New homes are under construction and the months to sale average for the area is approximately eight months, a positive trend line. In fact, many areas of the Midwest have begun to rebound, and the entrepreneurs are making plans to expand to the Kansas City market in the near future. “We want to build teams in other areas,” he says. “It’s a good future. In good times, real estate can be a good opportunity. You just have to be careful how you buy properties, stay focused, and keep your finger on the pulse of the market.”

He also feels education is incredibly important. “We made a financial commitment,” Gary says, “But we also made a commitment to education. We invested heavily in our education and it’s proving to be a wise investment.”

Gary offers similar advice to other entrepreneurs. “I always tell those who ask they need education. People don’t know what they don’t know.” He backs up his commitment to education by helping others learn: The entrepreneurs speak at real estate seminars and participate in national webinars, and have started an investment club in Tulsa to help real estate investors develop skills and knowledge.
What other advice does Gary offer to people dreaming of starting their own business? “It takes cash to get a business moving,” says Gary. “Small business financing is critical no matter what market you enter. Then, take advantage of any educational opportunities you can. Again, you don’t know what you don’t know – so find out! Finally, build your own Power Team. Choose people with experience who you can trust. For example, we found a contractor who can do a quality within a set time frame and within a set budget.”
“He’s critical to our success. Find people to add to your Power Team who can help you succeed.”

No comments:

Post a Comment