Age Defying Demographics
Ø Born 1978. Dillon, Montana, population 3,500
Ø Age 18. Married, two children
Ø Age 22. Top hard-money loan originator ($20 million a month).
Ø Age 26. Buys $32 million property as developer
Ø Age 27. Lunches NuWay Development (2007 $150 million volume)
Ø Age 28. Acquires prospective client transportation, Gurmman Gulfstream III
Ø Age 29. Buys @240 million worth of investment projects
Many investors flaunt success with “Rolexes and Roller,” or Fendi and Ferrari. In more cases than not, they confuse symbols as the goals of their pursuit rather than rewards of their success. The effect is to separate these gurus from the people they clam to want to help most.
JT Bramlette grew up in a middle-class family in Dillon, Montana. Like many families, their real assets were measured in strong values and hard work. “At 18, I was married with two kids and had to make my own way,” Bramlette said. “My first real estate lesson was renting a home and having no idea how I was going to pay for it.”
Bramlette wanted more for his family. He attended a real estate guru seminar where he learned there was money to be made in trading real estate notes. “This business is simply buying and trading debt at a discount,” he said. “Do it right and often enough and there is a nice profit to be made. Simply: shoot straight, work hard and do decent volume.”
Bramlette opened a small office where he heard this question frequently: “If you buy discounted deeds, do you lend money on houses with trust deeds?” After the third request, Bramlette added a “Get Your Mortgage Here” sign to the front door, knowing he could find a mortgage broker somewhere to help his client through application, qualification and closing.
“At 19, I knew little about mortgages and credit, but I knew people with solid backgrounds in consumer lending, marketing and valuing the security of land who, as professionals, were pleased to help if I offered them incremental value as a partner or added sales,” Bramlette said. “This is where I first learned that success is about and dependent upon, the people you surround yourself with.”
Within two years, the mortgage business had two offices and Bramlette began lending to developers. This evolved to representing a hard-money lender and originating $20 million in loans each month to developers from Florida to California. “My next lesson was, ‘like prospects and customers clump together.” Treat one well and they will tell their friends and business will follow. This taught me the power of leveraging group behavior positively and the result was we grew to huge volume overnight.”
“NOTHING IS IMPOSSIBLE”
This “no barriers” business philosophy is how Bramlette has launched three, multi-million dollar companies since age 22, evolving from lender to $100 million developer.
“By learning the real estate business from the financing and the mortgage security side, I learned I needed to quickly see through the real estate opportunity and emotion to the financial dynamics, the business risk, and the time required to turn a profit,” says Bramlette. “I have learned how stuff works. It’s natural that I look at deals that way, but by ten I realized I was learning about development.”
Bramlette discovered that traditional lenders were not adept at meeting developers’ financing needs. So, with his staff, he assembled a small fund to serve them.
DEVELOP TO TH NEST LEVEL
“First, we simply charged fees for the loan,” says Bramlette. “We then evolved to taking five percent or ten percent of the equity in the development for our services. Soon we understood funding was vital to any project so, by default, we found we were beginning to control and then consciously do our own deals. With the shift from lender to principal the margins changed accordingly.”
NuWay Development was founded in 2005. In the first year, it invested and sold $48 million worth of residential stock. In 2006, there was a turnover of $88 million. To date in 2007, the NuWay Development portfolio consists of portions of several multi-million dollar developments including River Rim Ranch ($113 million), Canyon Ridge, Teton Springs and Altura ($147 million).
NuWay International was founded this year to take their developments into international markets.
SUPREME OR SUPUERB
“We offer our investors two options,” says Bramlette, “supreme or superb. There is a reason for it. It is o much easier to limit range of product and offerings and set high sales and service expectations. We expect the same performance of our staff and suppliers. “
Then there is the 66,500-pound gorilla in this success story, the Gurmman Gulfstream III. There is sound justification for this Mach .65 business tool. “If we are going to offer upscale properties to smart and qualified investors,” says Bramlette, “we cannot cut corners. That is where the GIII comes in. It’s a sales tool that pays for itself. I can get buyers in and out of a property in hours versus a couple of days on scheduled carriers. Beyond the unspoken message of success, this is a working airplane. We have set up a joint venture with D&D Aviation so that if we are not using the GIII, it’s chartered. This way the jet is almost free,” says Bramlette.
INVESTORS AS A CLUB
“As we found with our borrowers, harnessing group behavior leverages buying power, so we structured an investment club inside NuWay. Today we have 45,000 members, many of whom exercised first option to purchase various properties from us. These turnkey property investments are sold from 15 percent to 25 percent under professionally set fair market value. They are typically anywhere from 24 to 60 month holds,” Bramlette said.
“We don’t confuse timing the market versus time in the market,” says Bramlette. “Both are great strategies but a seasoned investor knows no matter how bad a market gets, things improve and few people ever lose money in real estate over a three to five-year hold.”
BUY RIGHT, TARGET MARKETS
NuWay Development stays in the upper end of the second-and third- home markets with resort-oriented properties that may be part of a resort rental pool under a leaseback program that generates rental income for the investor.
Markets include Idaho, North Carolina, Georgia and Nevada. Teton Springs, Idaho best illustrates the NuWay strategy: it is a private community located at the base of the Tetons in Teton Valley, Idaho, bordered by the Grand Targhee National Forest. Teton Springs is 18 miles from Jackson Hole, Wyoming without Jackson Hole’s sky-high prices. J
The developer had spent money on infrastructure in a huge project so NuWay bought 110 lots at about $140,000 a piece versus the projected market rate of $250,000. This amounted to much-needed capital for the developer and then yielded the lowest price point for NuWay members in a desirable second-home resort community. These are sold as sole ownership or fractionalized vertical title with an absolute real share.
NuWay began four years ago as a small group buying an selling small properties. The strategy was to buy 10 to 20 discounted units to create sales momentum for the developer. After nearly three years of investor experience with this type of finished product, NuWay investors are migrating to projects from Las Vegas to other NuWay projects at River Rim, Canyon Ridge or Altura, North Carolina.
LIFE LESSONS ACCORIDNG TO BRAMLETTE
“At 29 years old, I am frequently treated with skepticism,’ says Bramlette. “How could I be so successful at my age?’ I know three tings: the harder I work the luckier I get. Everything comes with time. You cannot rust your end goal. With persistence, it will happen automatically. In retrospect I can see these as pieces of the big jigsaw.”
On youth: “Youth is also a huge asset. I remember turning to my Dad for support when I had just bought 300 units and realized I was on the hook for a $32 million loan at 26 years old. I guess I was asking him for some comfort. He responded, “Consider your age, your potential to recover from failure, what you know, and who you know. Even if you fail, you’ll recover and be just fine.’ In six months, the $32 million became $48 million and I have never looked back. Understanding managed risk is an advantage.”
On staff: “Who can help us get where we wish to go is the first consideration, long before what we want to accomplish. Great ideas are nothing without a team to implement them.”
On greed: “In retrospect, I could have sold that first development for $58 million. But I learned that passing on the profit potential to customer was the difference in sustainable recurring investor business rather than just being another “one trick real estate sales company.’”
On giving back: “Success is only worthwhile when it’s shared with the staff who got us here and the folks who are a lot less fortunate than I am.”