"The Man, The Mission, The Passion" Husband, Father, Attorney, CPA, Steward Leader, Entrepreneur, MBA, Author, Builder, HBS OPM 25 Class, Mentor, Teacher

Mentor’s Reply to Young Entrepreneur’s Questions (Part XIX)

development

Hello Mr. Collier,

I hope all is well. When you get a moment could you please answer these?

Would you agree that using all of one’s cash or the majority of it per deal will take longer to grow versus using leveraging with debt wisely?
High leverage boosts both profit AND risk; wisdom is knowing how much you can handle. Sooner or later a deal will go south on you; that’s just the nature of life. That’s when you find out what you are really made of, crisis reveals character as much as it builds it. I’ve had at least three MAJOR economic apocalypses in my life, all resulting in sleepless nights, stress and strain.

Do you find opportunity first or find the right person to find the opportunity?
When I was young I found deals/opportunity personally; now it’s a team effort.

What are you working on?
Working on ground up development (300 apt homes in Ocala, like number in Port Orange, 300 beds in 3 micro sites in College Park north of UF); couple of acquisitions with partners; always trying to help my organization grow, get ever better; develop people, help them be their best selves; challenge myself to do the same.

Any reason why so much new development right now? Cheap land? Great deals? Cheaper to build than to acquire existing units?
No, No, No/Sort of. Land is definitely not cheap; the deals are good (we hope/project) but not especially great. New acquisitions are not particularly pricey re replacement costs BUT they do require HUGE hunks of cash/equity. Developing our own allows us to substitute sweat equity/risk premium for a portion of that equity; easiest way for us to upgrade our portfolio.

As always, I share what I most want/need to learn. – Nathan S. Collier

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A BLOG ON PERSONAL LEADERSHIP BY THE FOUNDER OF THE COLLIER COMPANIES
LARGEST PRIVATE PROVIDER OF STUDENT HOUSING