Always Opportunity in Augusta
The first portfolio of homes…
As I discussed in last week’s newsletter, I don’t remember seeing a singular market cycle shift event/turning point in Augusta in 2008/2009. It’s easier to remember the change in terms of news headlines: Big Investment Banks Failing, Real Estate Values in FL and AZ Cut-in-Half Overnight!
Maybe it was my naïveté or contrarian nature but I don’t ever remember feeling like there ever was not opportunity in Augusta. People still needed a place to live and those places were suddenly a lot more affordable.
My first big break would come in the form of a package of homes that a local bank had taken back through foreclosure. I was fortunate enough to meet a banker named Jane who believed in me from the beginning. Given my norm was disinterested bankers–feet on desk, clipping their fingernails into a trashcan–I didn’t take Jane’s trust lightly and spent a lot of time and energy cultivating and maintaining it.
The bank had a small problem, and I was ready to jump in the water to help. The homes were in the areas I wanted to be in Richmond County more specifically: Olde Towne and Harrisburg. But they all needed a boatload of work. One house had a tree “resting” on it–-which we had to remove with a crane.
I did precisely what every entrepreneur should not do and hired friends (and family) and significant others of the friends and family. We were like Motown with the interconnectedness and our ambition but a mile short on our organization and consistency.
My good friend from college, Caleb, who was an investor in California, was one of the first to see the opportunity in Augusta. A fellow to-his-core contrarian, Caleb was sold on an opportunity he wanted to see, and he was soon in-market to look at the dozen or so properties we bought for under $150k.
In retrospect, the sales price doesn’t seem real. A couple of years later, when it was seemingly much worse, we bought a package of 50 homes pre-foreclosure for a couple of hundred thousand dollars and immediately sold the package to my first large investor.
But, in 2009, we were going to begin to make the mistakes which would lead to the creation of Auben Realty. Caleb bought in and work began. Everything was off from day one, but our biggest miss was underestimating the renovation work that needed to be done: $10k became $20k. If we said $20k, it was $40k, and the bigger the budget the larger the variables affecting that budget. I quickly learned that I really wasn’t qualified to estimate the level of repairs we encountered, and my team also wasn’t able to execute on my representations.
We began work on homes on Second Street, Clark, Battle Row and many streets I would learn really, really well riding around monitoring “progress.” The energy and activity was intoxicating, particularly against the backdrop of doom and gloom in real estate at the time. It felt like we were discovering something no one else saw. Learning on the fly, I could barely keep up, but the frenetic pace and seeing daily transformation were early indicators I had chosen a career I would love.
The plan was initially to sell some of the homes to pay for others Caleb would keep, but our execution would alter that. We missed nearly every renovation budget, but thankfully we bought the homes so cheap that we were ok-ish.
As we began to sell some of the homes off in 2009 and 2010, we realized we needed to become more official and try to establish a way for us to keep some of the commission dollars in-house. Natalie got our license, we found a broker for hire, and Auben Realty was born in September of 2009.
We moved office locations from a single-family house in the suburbs of Martinez, GA to an iconic building on 1918 Central Avenue, a former Pure Oil gas station designed to look like an English Tudor cottage. We were official.