Safari and House Selling
Safari is the Swahili word for Journey, and that’s where Lucas and I are heading in late June, soon after the school year lets out. Over there in Eastern Africa, in Kenya and Tanzania, where Karen Blixen set up shop in 1913 and ultimately wrote the book Out of Africa about her 17 years there.
Vaccines are important when traveling to countries as these, and yesterday Lucas and I traveled earlier morning to a place that specializes in such medicine, on East 55th Street, NYC. We were given shots for typhoid, yellow fever, hep A and B and given an interesting tutorial on each. No vaccines exist for Dengue, Chikungunya.
We were told not to drink the water, not to eat raw foods, not to use the ice and a bunch of other things, most of which I knew but needed a refresher. I traveled to India for 3-4 months when I was 23 and I can mostly guarantee I took few precautions, with few problems, but that’s the advantage of youth and naïveté.
Now I travel with guides and medicine and well planned routes to some degree. Not overplanned, but planned out, leaving enough room for improvisation but having a structure embedded in the trip.
We sold a house on Friday of last week. It was a big one, exceeding 4000 sq ft, on 6 acres, with a mountain view. We did that contract last summer at some point, and then felt the true brunt of the broad basket of inflation across the entire spectrum of materials, and even some labor. After surviving 12 months of covid related surprises, I thought we were in the clear. We weren’t and built the 3 houses in Olivebridge into the teeth of unpleasant pricing surprises across the board. We paid a lot for the land, and we got caught up in the inflation rip tide than pulled our dreamed of profits out to sea. Luckily, we had priced these homes at what the market could bear, and although our profits were less than hoped or projected, there was still room for a little get jiggy with it dance.
You could see, however, how a contractor could get caught here with contracts that didn’t envision a price increase of this sort. While the times are profitable for us, I pity the fool who isn’t approaching this business environment with the same strategic planning tools as we do. It’s just really risky out there.
Site visit and home re-sales
I did something today I haven't done in years - I attended the end of job final walk-thru with the Amanda, my main designer and project manager who has been with me for quite awhile now, and the clients who are buying the home. I had/have no objection to attending, and there have literally been hundreds of opportunities (aka closings) over the last 7 years, but it's really Amanda's lane and who am I to butt in on her turf. Plus, I'm not in need of any more work, especially the hard work of the last walk-thru, where stress and managing expectations is common and necessary. I haven't physically attended a sales closing either in quite some time, long before the pandemic made that standard practice. It's all about time management and those two events in the process 1, take up a lot of time, and 2, aren't my strong suit.
It's hard to describe the hard work I do everyday to make the client experience as painfree as it is. And I know how painfree it is, because I talk to other people and their processes are far different than what we offer, where homeowners and build clients are subject and exposed to the full spectrum of trials and tribulations of building a home, be it permitting, lending, board of healths, utilities, and the hundred other tasks that take real skill and aren't that fun. I think the one flaw in our building process is we make it too easy - many people who build homes are just so darn thankful to be reaching something that could be considered a finish line that the idea of opening a can of worms about this issue or that issue that may prevent move in is just really off the table. Us, with only 2 or 3 site meetings and an effort that seems sometimes like we wave a magic wand and things happen, there is still plenty of energy left to get lost in the details and lose the big or even small picture.
Not sure If I'm making sense, but what has always been missing from our process is me - the owner, the guy who most every time has made the original sale through skillful process education and finding the thing that works for that client - that me, the guy who drops off the screen early on in the process as I hand the baton to Amanda and I work behind the scenes on the mechanical heavy lifts - that it's been clear to me for years that I should be at these end of process meet and greets, maybe not to spend the whole time there for the walk-thru, but for a thank you and a handshake. But even that is not easy - we are busy, and I'm pulled in lots of directions.
But, back to what I was saying, it's clear to me it's important to the brand and the business and the client frame of mind that I do so, so the idea that after 20 years (7 delegating this end of job thang) I was able to pop in and spend a few hours with the clients who trust us (me) to pull this off, that's important. It also feels good to me, since just dealing with the bullshit all the time, and not getting the chance to interact with people who are top of game, and very interesting, diverse, etc.. - that to me was always something I knew I shouldn't be skipping in terms of getting real gratification from what I do for a living.
And it's funny - not quite the right word- that I'm aware of this, have been aware of this, and now finally, in 2022, can and am making the effort to deepen these relationships with people and families who have chosen us, trusted us, to help them with this upstate aspiration. It's always been a critical detail, one I just couldn't get done. I'm having dinner with them, throwing small parties, reaching out.
That happens a lot in business - you know something needs be done, but there is just no way you can do it. Lack of money, lack of bandwidth, lack of labor and skilled resources. So it sits there, undone. No business doesn't have their list of things that just haven't been gotten to but everyone knows it should be gotten to. A website update, etc...
Our resales - what I used to consider real evidence of the quality of our homes, and the demand for them - are off the charts. The prices people are getting for our homes is insane. That's hyperbole since I think people who buy our homes are smart (and lucky) and 'insane' makes them sound ungrounded in data, and that is not the case - however, the prices are high, and the return on the investment for a lot of these people is pretty insane.
Here's one we finished in 2018 - on the market for a couple of days - MAYBE they paid $600k for it. Selling in the high $900's. In 2.5 years. Even for affluent people, this is a big cha ching, ROI. We've seen it dozens of times. Sort of makes me nervous I've left too much money on the table for some of my deals, but when I look at my profits and margins, I think I'm doing the right thing, watching the market, staying under it. I mean, we have nothing to sell, and go out of our way to make it hard to get in, contact with us. When I see people, investors, etc... calmly pricing new homes - or creating business plans around sales in the $1m-$1.5 mark, eh, to me, that's just a big risk, and if the market would turn, it wouldn't be pretty. But, you know, the Catskills could really be onto something this time. The hybrid work thing has fundamentally changed the Catskills, a very attractive place to live. People are clamoring for our homes, for sure.
Back on the Road
With the denouement of the pandemic, I'm back on the road, dragging my son along, and a colleague or two. Amazing it's been 18 months more or less of light or no travel.
NYC, Great Barrington, Killington, and Big Sky Montana. And a big trip planned for end of June, early July.
They say the journey not the destination is the secret, and I couldn't agree more, and that's why we are always in the front of the plane and on the top floors of hotels, courtesy many times of the gigantic amount of miles and rewards I earn by running our large company expenses through credit cards. I'm often amazed that these awards aren't taxed in some way (thank you credit card lobbyists!), even when they are giving you direct cash back, but I'm thankful. I earn enough awards that I feel I have to include them in my estate plans, since the material benefit is real.
I use an assortment of airline cards (delta, united, american), hotel cards (mostly Marriott for the W hotels), reward cards that you can use flexibly (Chase Ink), and even cards like Capitol One, where post-travel you can select to use rewards which I thought was really genius. The hotel and airline cards, especially for higher end travel, has gotten a little sketch in terms of points needed to earn free travel, requiring 2 or 3x what they used to - or as some old timer says somewhere, a million points isn't what it used to be.
The ski trips have been fun - one on the east and one on the west. Really the only thing they shared other than great getaways and time well spent with family was one day was stormy and poor visibility (wintry) and the other day glorious cold blue skys. Both have their attributes. In Big Sky, we got dumped on with 10" of fresh powder between Saturday night and Sunday, which provided a fresh powder experience none of my group had every experienced before and took a little getting used to.
On the business front, we have 4 closings coming up in the next 45 days, and that provides a lot of logistical work for us all. With the end of winter, that creates a lot of phone calls that start with 'hey i hear it's going to be nice out, can we do this or that?"
My job is getting easier
Post covid seems to be here. Even in Vermont, bastion of strict covid rules and masking, is finished with social distancing and masking, with packed ski lodges and slopes mask and safety protocol free. That was eye-opening. My son is even mask free in school, 24 months after masking up. It's hard to remember that only 5 weeks ago, we were running scared because of omicron.
On a business front, i haven't taken a sales call (except for those lucky few who have somehow managed to thread the needle and get me on the phone, or get a return email). I'm burnt out, my team needs a break, and the constant searching for a way to do more gets old. Our team, like many teams, was good before covid and is even better now, and now I'm focused on calibrating just the right amount of work that keeps the pockets flush, the bonuses and profit shares flowing, all 6 cylinders pumps but no danger of overheating.
It's a strange feeling after 24 months of pinned red zone RPM's, to be idling in the 6000/7000 range, able to let off the gas and gun it as needed, knowing what you got under the hood.
At this point, Catskill Farms has become very selective about who and why we work for. It's almost a reserve brand, fully priced, hard to get into.
As part of our employee retainage efforts, I started a 401k employer match safe harbor program 6 years ago. This year I paid out over $100k in matches, bonuses, and profit shares to my 10 person team. I also donated about $15k to local non-profits.
With a clean bill of personal health, post-pandemic business and personal plans ongoing, and a team to be reckoned with, 2022 should resemble 2021 in terms of success, but without all the uncertainty, stress, and fog of war.
That's something to write home about.
OH, Right, this is a blog about homes we build and sell. We sold 2 last week - one in Narrowsburg, Sullivan County and one in Saugerties, Ulster County.
