Thank you so much for joining us in this interview series. Before we dive into our discussion about succession, our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
After a decade in corporate America, working for several Fortune 500 companies, including Frito Lay, I realized that path wasn’t for me long-term. Inspired by friends who entered the high-end, private, amenitized real estate community space in real estate, I decided to make a change. In the fall of 1998, literally at a Red Lobster in Greenville, South Carolina, the decision was made. I took a leap of faith, despite having two young children under 14 months. My first role in this new field was at Mountainair Country Club in Burnsville, North Carolina, known for its private landing strip and serving as a second or third home for families from the Northeast and Florida. This marked the beginning of my journey into the world of amenitized communities.
Can you share the most interesting story that happened to you since you started your career?
One particularly interesting story involves a commodities trader named Kevin Smith from the mercantile exchange in New York. This took place in the spring of 2000 while I was working at Haig Point on Daufuskie Island, which required taking a private ferry for access. Our internal real estate sales team typically went golfing in our community on Friday afternoons. However, knowing we were running Wall Street Journal ads, I decided to stay back in the office.
That’s when Kevin Smith called, inquiring about our properties in Haig Point that we had just released on the Atlantic Ocean and the Calibogue Sound. Daufuskie was originally known as the first key, being the furthest land parcel jutting out of the coast of South Carolina. After an hour-long phone call with Kevin, we concluded that I would go out and videotape these properties using old school VHS tapes and then overnight those to him.
He called me the next day, and we reserved four of the oceanfront lots in advance of his visit, contingent on him seeing and approving the community and the lots. Those lots were priced between 500k to 700k at the time, and their current value is around 2.5M. So, Kevin put down a refundable deposit on each available lot, and I arranged for him and his father, who was a fireman from New York, to fly into Savannah, Georgia. Kevin, a college grad from Northwestern who was a commodities trader on the Merc exchange in New York, came down with his dad, and I met them at the Hyatt in Savannah.
I had arranged for a private helicopter to be waiting for us on the roof of the Hyatt and flew the three of us into Haig Point on Daufuskie Island. We landed on the croquet lawn, and I took them in a golf cart over to the properties he had reserved. Kevin’s reaction was immediate; for each lot, he simply said, “Yes.” He even expressed interest in another lot that wasn’t strictly oceanfront but had an ocean view, wanting to control the oceanfront property market in Haig Point on Daufuskie Island.
Kevin’s strategy was straightforward: if anyone wanted to purchase an oceanfront property in the community of Haig Point, they would have to go through him. He ended up divesting all the properties within a two to four-year period, making a significant return on his investment. Since then, Kevin and I have maintained a lifelong friendship. It’s a testament to how business dealings can lead to enduring connections.
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
Certainly, a quote that resonates with me deeply is, “The difference between success and failure is oftentimes determined by those who take advantage of an opportunity when presented.” This quote became particularly relevant in my life back in 1998, marking a pivotal moment in my career. It was then that I was faced with a significant opportunity while at that Red Lobster, of all places. Taking that leap of faith, and seizing the chance that was laid out before me, truly epitomized this quote for me. It underscored the essence of grabbing opportunities as they come, which, in my case, steered my career toward 25+ years of success.
What do you think makes your company stand out? Can you share a story?
MRLO Partners stands out because we’re in a unique position in the market; no other company does exactly what we do. Our distinct advantage stems from the deep relationships we’ve established with private community developers over the last 25 years. We leverage these relationships to invest MRLO Partners’ funds into exclusive communities before their premier properties, surrounded by mountains, lakes, rivers, and oceans, are available to the general public. This early access enables us to acquire these properties at a discounted rate, a benefit directly tied to the proven track record and success I’ve achieved in this sector for a quarter of a century. Our approach not only sets us apart but also allows us to offer unparalleled value and opportunities to our partners and clients.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
The first trait that’s been crucial to my success is the willingness to help others, coupled with the openness to ask for help when needed. I’ve always believed in giving support and have found that reciprocating by asking for assistance when necessary creates a positive cycle. I often advise younger professionals to not hesitate in seeking help, emphasizing that people generally have a natural inclination to assist others. This willingness to both offer and request help has been a cornerstone of my approach.
Another key trait is pursuing work with passion. While it may sound cliché, engaging in work that excites you truly makes it feel less like a job and more like a calling. This passion has driven me to overcome challenges and sustain my enthusiasm over the long term.
Lastly, commitment to the process is essential. Regardless of the industry, whether it’s services, products, or real estate, there’s always a process involved. My commitment to meticulously following these processes, without looking for shortcuts, has been instrumental. This dedication ensures consistency, quality, and ultimately, success in any venture.
Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.
As a leader, from a real estate perspective, a very difficult choice, even though there were two congruent paths, was to elevate and separate from Boot Ranch, my current community. I’d been there for eight years, and we had sold $250,000,000 in land in the last eight years. We sold another four or five hundred million in homes and structures in the past eight years. So, we’ve had nearly a billion dollars in real estate sales just in the one community. It was just myself and my business partner, Sean Gioffre. I had to make the tough decision to elevate and separate from the day-to-day at Boot Ranch and launch MRLO Partners. I couldn’t do both, so I had to make a choice, a difficult choice, because by now it was a known and successful community in Texas. It would have been another two to three-year run there, with a safety net. But I felt it was time for me to grow and be able to capture my weekends again. I haven’t had weekends in 25 years. So, elevating and separating from Boot Ranch, was a difficult choice for me because nothing’s guaranteed, That was a hard decision for me to make.
What I realized was the following: I need to grow, I need to adapt and change. The big difference is when a husband and wife would come into a community on the level of Boot Ranch, they’re making a very emotional decision on behalf of their family. A crucial lesson I learned quickly while raising capital for MRLO Partners is that for family offices and ultra-high-net-worth individuals, investment decisions are driven more by logic than emotion. This realization necessitated a significant shift in my approach. I had to adapt my path, refine my presentations, and alter my educational and advisory methods to align more with a logical and analytical framework, rather than an emotionally driven one. This change was essential to effectively communicate the value and potential of investments to these discerning audiences.
Ok, thank you for that. Let’s now jump to the primary focus of our interview. Let’s begin with a basic definition so that all of us are on the same page. What does succession planning mean to you?
Succession planning means various things to different people and families. For me, particularly regarding MRLO Partners, it involves leaving a flexible model and business plan for successors. This plan should be adaptable to market changes and evolving times, yet built on a foundation that has been established for several decades. The goal is to ensure the business is positioned to grow and continue thriving into the future.
What are the nuanced challenges often faced in succession planning? What are the strategies to overcome those challenges?
In my observation and experience, succession planning can be difficult when there’s no one to take over the family business or office. This challenge arises when a family may have several children, with perhaps one showing interest but lacking ability, while the others are disengaged or unwilling to participate in the family business. This is a common scenario in succession planning for family offices: debating whether the business should continue to thrive, be rolled up, merged, sold, or undergo some other change as part of the succession plan. This includes considering mergers or acquisitions as part of the succession strategy when the patriarch or matriarch leaves or retires. The main challenge is if there’s no successor for the patriarch or matriarch in the family.
While we don’t get directly involved in appointing successors for families, we do offer indirect support through advisory services. We’re equipped to provide guidance and expertise to help families navigate and overcome succession planning challenges, tailoring our advice to their unique situations.
How do you cultivate an environment that not only identifies but nourishes the hidden talents within your organization? What practices have you found to be most effective?
In this day and age, it’s all about contact, human contact. Nurturing that contact comes from having internal teams in these communities getting out on the property, being a part of the land, walking the land, and understanding where prevailing breezes are coming from. Addressing challenges with topos, who are the neighbors on either side of that particular property, what challenges they’re going to face in terms of the building envelope, exposure to the elements. These are all factors of being a professional, and we all need to do a better job of just getting back out on the property, and walking those properties. When clients come in, they rely on me and my team to be the experts and the professionals as to what properties are available, how we can justify the price points of those properties, and then knowing everything from a topo, from logistical, from utilities, everything you need to know about that property. The real estate agents and everybody on my team need to understand that. The challenge is to make sure they’re out in the community, walking these properties on a daily and weekly basis.
What’s your philosophy on growing talent from within versus attracting external talents? How do you find the right balance?
Ideally, we aim to grow talent from within, recognizing that some individuals are naturally skilled connectors and relators. As educators and advisors, our work primarily involves the top 1% of the population, with most clients having a net worth ranging from $5 million to over $5 billion. These clients cannot be convinced or coerced into anything, nor would we want to. Therefore, our focus is on enhancing human contact, prioritizing direct interactions over emails or texts. The next best alternatives are phone or Zoom calls, but the most effective interactions occur face-to-face between our real estate agents and clients in the community. This direct engagement is crucial, as the transfer of emotion from an agent to a potential purchaser is tangible and vital for success. It’s challenging to achieve that without in-person meetings because you can’t feel that emotion.
What’s your approach to ensuring that succession planning is a holistic process, and not just confined to the top layers of management? How do you communicate this philosophy through the organization?
We have to be prepared to assist these families. Many have been successful, focusing for example: on their specific industries, like manufacturing heavy equipment in the Midwest, and may know little about succession planning or real estate values. We take on the role of educators and advisors, and our approach isn’t confined to only allowing top executives to counsel clients on purchases, succession planning, or the structure of their offices. There’s no hierarchy restricting communication with family offices to only top-level staff. Everyone in our organization is empowered in this regard, driven by the succession plan. However, sometimes a viable plan isn’t possible, and the family office may need to consider merging, being acquired, or other options. The most realistic is merging with or being acquired by another organization, especially if there’s no succession plan in place.
What are your “Five Things You Need To Do Effective Succession Planning”?
For effective succession planning, the five key actions are:
- Educate: It’s crucial to understand the various resources and approaches available for succession. Succession isn’t one-size-fits-all; it can involve passing leadership to a family member or integrating different strategies like mergers or sales if direct succession isn’t viable.
- Advise: Offering tailored advice and providing necessary resources helps families make informed decisions about their succession plans, ensuring choices are well-aligned with their long-term objectives.
- Communicate: Regular, clear communication is essential, whether in person, over the phone, or via email. This ensures all stakeholders are aligned and informed throughout the succession planning process.
- Timing: The timing of the transition, especially concerning the retirement of key figures like the patriarch or matriarch, is critical. Planning should ideally start at least six months to a year in advance to ensure a smooth transition.
- Follow the Process: Adhering to a structured process for succession planning helps in covering all bases, ensuring no aspect of the transition is overlooked. There is a process in place for a reason.
Off-topic, but I’m curious. As someone steering the ship, what thoughts or concerns often keep you awake at night? How do those thoughts influence your daily decision-making process?
What keeps me awake at night is our agents not trusting or following the process. We have a tried-and-true process honed over 25 years for dealing with high-net-worth individuals and family offices. Yet, some younger executives sometimes think they’ll do it their way, which often doesn’t work out. We continue to refine our process; it works worldwide, in communities surrounded by mountains, rivers, lakes, and oceans, from the south to the west, the Caribbean to the Middle East. It’s bothersome when they veer off the plan, trying their own methods, as they end up hurting themselves and doing the client an injustice. If the client isn’t properly educated, they’re left confused, and confused buyers never buy.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
To zoom out and look at this from a 30,000-foot level. I’m the son of educators. I’m the son of a principal and a school teacher. It’s part of me. I’m a teacher, I’m an educator, and I’m an advisor. It’s innate in me. I think it’s a shame that not every child has the same opportunities to learn that others have. If I could start a movement, it would be focused on this disparity. I would focus on paying teachers more, challenging teachers, giving them the right resources to be able to teach in some of these inner city areas and some of these rural areas, and have the same tools and mechanisms to teach those kids because they should have the same right to learn that somebody that’s from an affluent urban area. I would say that’s a global thing, but ultimately I would say that would have the most impact on the future of our country.
How can our readers further follow you online?
Readers can follow me online through my website MRLO Partners or my LinkedIn profile. Those are the best two spots to connect. Additionally, if anyone is interested in visiting one of our communities or just wants to reach out to me via phone, I’m always open to conversations.
Thank you for the time you spent sharing these fantastic insights. We wish you only continued success in your great work!
Thank you, I appreciate the opportunity as well.