Every so often in real estate development, you can get persuaded to buy land because of convenience:
- Convenience of installed infrastructure
- Convenience of perfect zoning or land use
- Convenience of fully approved land
- Convenience of developed land
Tara Cove– Convenience of a drainage lake in place at a good price. Tara Cove was a project I found through a broker friend of mine whose offering had a nice lake already in place and when the site plan was designed it perfectly met my city drainage requirements. The lake was to the rear of the property and was a great money maker as it provided lakefront living at a premium. But, it was not an “A” location.
Sometimes convenience can be blinding- In this case we needed a filler project fast because a project we had anticipated bringing to market (Trevi Isle) was bogged down in a road right-of-way fight with Palm Beach County – unfortunately a common occurrence in our business. I jumped at the chance to bring this well-located project on board with its approved drainage and shortened development time. This was not a foolish move but it was a learning experience, and a good one. What do I mean? Locations can be graded from A to F. A & B are generally good locations and Tara Cove was a solid B. In my opinion C thru F should be avoided. The lower the grade the longer the sell-out.
Tara Cove was in the heart of the blue-collar zone of West Palm Beach. This centrally located zone is where hard working respectable people generally on their way up societies invisible ladder live. In this zone we see tremendous diversity with young professionals and young vocational workers, maids and skilled manual laborers, nurses and hospital workers, fire, police, teachers, first time buyers and city workers.
To me it was a cultural awakening. Some of these people (as with any group) had credit issues, not because of a lack of funds but because they are sometimes inexperienced in the ways of credit scoring. This presented some problems since people’s home buying appetite can be larger than their credit will allow. What did we learn?
We learned to adapt by teaching future buyers how to repair credit, how to increase their scores and how to be better personal financial managers within their own families. We also offered special incentives to first responders (we were one of the first to do so), teachers, nurses, city workers, etc. Nothing is more satisfying than helping a worthy buyer repair their credit and get them that home. Buyers here were from all walks of life and were very grateful to have a new home.
Problems at Tara Cove were singular- qualifying our buyers. Everything else was like any other project, with similar problems and similar successes. Tara Cove was a 3 to 1 selling experience, meaning that for every 1 qualified buyer we generally went through 3 unqualified buyers that we could not help. This increased our sellout time and made price increases problematic.
Tara Cove was an economic success just the same, but there was a wealth of personal satisfaction within our company knowing we had helped educate so many future buyers who just missed buying at Tara Cove, and fulfilling the dream of “Home Ownership” for those that did make the grade. Sometimes we forget what a great service comes with developing and selling residential real estate.
Stephen Gravett has been a real estate developer for over 45 years and was most recently CEO of Kennedy Homes for the past 11 years and is still CEO of Kennedy Development Partners (KDP). He is also full time Director of Operations for 5 Star Developers. He is a state licensed broker and since 1980 a State licensed General Contractor Unlimited. He flew B-52’s in the US Air Force during the Vietnam war.