Updated: Jul 1
It's been a while since I updated you on the progress of the new HQ, and many of you must be wondering what's going on at this point. I believe it was back in July when I gave a full update. You can read that post HERE.
At that time, we were in the middle of redrawing the plans and getting new bids, so a lot of progress was made in that time.
But today's post will knock your socks off, so please bear with me as I take you on this whole adventure from the beginning.
Some of you may know most of the story, but will fill in those who are new to the blog.
Back in February of 2020, I was holding a signed contract in hand for a new office/warehouse space I was getting ready to lease for the business. We had outgrown our location on Highway Blvd, and it was time to scale our business to adding a receiving warehouse to receive all the furniture we buy for our clients.
Furniture sales account for a huge portion of our business revenue, and currently we pay a third party company to receive, inspect, storage and white-glove deliver the furniture to our installations. They do a great job, but due to our volume, it was time to bring this in-house to have better control over every aspect of it.
Of course we all know what happened back in February of 2020. Covid made its debut, and I decided not to move forward with leasing a space after all.
This was a time of reflection for me. I spent time reflecting on the future, and I decided that I wanted to leave a strong financial legacy for my children if anything should happen to me, and I decided at that moment that buying a building to build equity is the best option.
After much praying and searching, I found this "unicorn" - an office/warehouse in the heart of Katy - a location that is very desirable to many - just about a mile from our office on Highway Blvd, and just off the freeway and a major intersection. Even though the location wasn't as huge a factor for me as long as I stayed in Katy, it will prove to be a huge benefit in the end. I will explain later in this post.
I signed the contract for the building in March or April of 2020 (the dates all run together in my head now). The only drawback to this space, was not having a 4' loading dock. The 14'x14' overhead door was grade level, so that would limit all the receiving we needed to do, but I figured it was a great start in the right direction. The plan was to start receiving about 50% of our goods, and buy or lease an additional warehouse space somewhere down the line to move to full capacity.
Let me pause now to say this - I decided in this post that I will share numbers to really drive some points home. So, this normally conservative girl, will be discussing money with anyone reading this in a way I haven't before - so bear with me.
When I found the new HQ, it was bare land. The $475K price tag was a bit uncomfortable for me to be honest, but the business was doing well, as it has been for a number of years, and we could easily afford that, and I have been known to be a big risk-taker, so I went for it.
After some delays with the build through the developer, I ended up closing on the building in December of 2021. I ended up choosing to buy the shell instead of having the developer do the interior buildout. Their buildout was an additional $70K, which was great, but it was sorely lacking, and as a designer, I could not see that much potential in a space and let it go. I intended to do my own buildout and was prepared to spend up to $300K.
After talking to my bank, the plan was to do a "bridge loan" to finance the initial purchase of the shell that I ended up paying $467K for because I ended up with the city's water riser for the whole building in my unit. Then they would finance the construction and bridge loan as one loan through the SBA. The plan was to end up with a loan of no more than $650K after all of my down payments was factored in.
The first issue that caused major delays was finding a GC. I met with at least 7 GC's and only 2 of them ended up bidding on the property and they came in very high. I eventually found a wonderful female GC (that I was actually excited about). After the SBA sent us a list of the requirements and documentation that the GC has to provide to be approved for the project, she said sayonara!
I mean, I can't even blame her. The SBA requires from the GC (copied word for word from their documents):
1. Current Work in Progress project list including scope of
work, dollar amount of contract, contact name of owner
and phone #
2. Completed project list to include type of project and
amount of contract (include similar type projects, if
3. List of completed project references, include project
name, contact name and phone number, (minimum of 3)
4. List of Trade References for major trades, (minimum of 5
including: concrete, materials supplier, HVAC, electrical,
plumbing) include contact name, phone number
5. Bank reference contact name and phone #
6. Resumes or description of qualifications of key employees
7. Copy of Contractors’ license
8. Last two years Corporate Tax Returns or Financial
Statements, and an interim statement through the most
recent month (these documents will be handled
confidentially by the Bank)
I mean, who has time for this? I appreciated that they were trying to protect me from careless GC's, but goodness! And if you think this is something, I had to provide a whole lot more - over and over and over. I had to provide the same documentation to several different people - including a third party company that they use to verify all my information. And then of course, as too much time passes by, they need updated information again. It was emotionally draining!! Added to that, the interest rate was not a fixed rate, and therefore could adjust down the line. But this was still such a wonderful growth opportunity for my business, that I complied and provided everything they needed.
I finally got a referral of a GC from the bank. He had done several SBA projects with them and already had some of the documentation with the SBA. This GC was a breath of fresh air. He and his team were great at communicating, kept their promises, prompt, and patient. Very rare.
His initial bid came in at $984K for interior buildout. Yikes!! I remember my mouth dropping to the floor. This meant that we couldn't just take off a few items to get to the number I was comfortable with. This meant a complete redraw of the plans, because this GC will only build what's on the plans. This was in April of 2022 we had to go right back to the drawing board. The second story would now be a future project. After several months for architectural, structural and mechanical plans being complete, interest rates, labor costs and material costs had gone through the roof. The rebid from the GC came in at $687K. This meant that I would have a mortgage of over $1M including the bridge loan payoff!
I had received my commitment letter from the bank a few months prior for $1.2M and business is great that we could afford this now, but as much of a risk taker as I am, I know when I am in over my head. This is not what I signed up for and I started to get concerned. I like to plan for lean times in my business. I started my business right before the 2008 recession, so I know what lean times feel like, and I never want to feel that way again. Plus, I didn't want to have to be intensely working to pay a mortgage. I still wanted to enjoy my work like I am now.
I was still moving forward regardless - in fact we had just resubmitted the new plans with corrections to the City of Katy, and finalizing all the documentation with the bank and the 3rd party verifier, so we were well on our way to finally seeing the buildout start. Sometimes it is hard to be this far on the journey with a dream you've desired for a long time, and then just turn around. But more and more I felt it was the right thing to do. The time to make that call was now.
I cried out to God and asked Him why He would bring me to this point only to let this happen. I don't know why I forgot how faithful He is.
"I will never leave you nor forsake you" is the gentle voice I would hear in my heart.
Added to that, our lease was up at the Highway Blvd location, and I refused to extend it another month, since they would increase the rate by a lot every time we asked for an extension. I began to look for a small house to buy under $200K. The plan was to move into the house to run the business temporarily until the Casa Vilora HQ was ready, and then lease it out or do an AirBNB afterwards. It was my desire to start investing in real estate anyway, so that made sense in my head.
I was amazed at how much houses had gone up since I bought my house about 4 years ago. I paid $200K for my house back in 2018, and a much smaller property than mine was now going for $320K. That idea didn't go very far. We ended up moving into my house temporarily while waiting for the elusive Casa Vilora HQ get its act together.
I remember talking to the sales agent, who is also a realtor for the developer of the Casa Vilora HQ building, and just expressing my frustration. I remember telling her, without really meaning it, that I feel like just selling the building shell and just calling it a day. We both kinda moved on from the conversation, but the conversation was about to come up again.
In the meantime, I was in bed one night and decided to broaden my search for a property to move the business into temporarily, and came across the 1.8 acres that I bought out in Sealy, now dubbed Great Prairie Homestead
After visiting this property, I knew we couldn't move into it. It was in terrible shape, but something stirred in me and I wanted it. I didn't know what it was that stirred in me at the time because it was actually very gross, but it will all become crystal clear later.
Back in January 2022, I bought 3 acres of raw land out in Columbus. God had placed a very strong desire on my heart to move out to the country and grow food and raise animals. When I bought that land, it was meant to sit there for a couple of years until I got the other stuff out of the way. There were no plans to develop it right away.
Columbus was a bit further out than I wanted (about 45 minutes from Katy), but that made the land more affordable at $84K.
After buying the Sealy property in August 2022 I immediately began making plans to improve it. I think it was the creative in me that wanted a personal project, and since the Casa Vilora HQ was not doing that for me, this became my new outlet. You see, you will hear many designers say how much they hate doing their own projects. I am the complete opposite! I LOVE doing my own projects, because there is no limitations to my creativity at that point - well, except budget. Hahaha. While I don't necessarily limit myself when I design for clients, I have to keep their ideas, needs and desires in mind as well. With my home or office, I don't have that, so I go for it. It is like my lab - I experiment with ideas that I only dreamt about. I would say every four to five years or so I crave doing a new project for myself.
As I started making plans to renovate the house on the property, I started looking into adding a 20x30 barn for storing construction materials. Once I started pricing them out, I had an epiphany! I know this had to be God speaking! What if instead of a barn, I added a steel building and making that our new HQ?
Many people don't know this, but I have always desired to have a live/work setup. I remember dreaming long time ago about having my studio and showroom on the lower level of a really cool artsy building, and living large on the upper level. In the City of Katy, live/work is not allowed, so I gave up on that dream long time ago, and honestly forgot about it.
I got some quotes back on a 40x60x17 steel building and I was pleasantly surprised that I could accomplish this for under $80K for the shell (including insulation and mechanical rough-ins), and then a buildout would run roughly $80-100K. How about $180K for our new HQ versus $1M? Haha. Intrigued!
The idea of selling the Casa Vilora HQ suddenly resurfaced. I called up the sales agent and asked her what she thinks I could sell it for. She said something like $500K. I asked her "do you have anymore units like mine available?", she said "no, we are all sold out". I was like "then I want to list my unit for $650K". She resisted. "I don't think you can get that for it because of the comps, but I will try". I said "it will boil down to supply and demand. Someone will want this location bad enough and will pay for it"
Less than two weeks later, she messages me with a cash offer, full price, 2 weeks closing! Wow! I should have gone higher. hahaha.
I sold the Casa Vilora HQ (shell building with no improvements) for $183K more than I paid for it just 10 months ago. Talk about a good ROI. Plus the land in Columbus (being so far out), I ended up selling for quite a bit more than I had paid for it. I didn't see the point in holding on to such small acreage for investment reasons.
So now, I just signed the contract for the 40x60 metal building that will be built on my Sealy property - two stories that will give us about 4000sf of office space. I won't have the warehouse with a loading dock there, since I don't want the land to look industrial, plus I am restricted by the pipelines, so I have a commercial realtor looking for land where I will build a 5000sf warehouse with 4' loading dock with a small office (another metal building). Based on my research, I can accomplish that for under $350K for land and the building. I was hoping to buy 3.5 acres right across the street from the Sealy property, but the seller only wants it used for residential or agricultural.
I have identified a .66 acre land on a major frontage for $150K and another one that is 2 acres for $180K (a bit overpriced), so those may be a viable options. I am moving a bit slower with this piece of the puzzle until I am well on my way with the office buildout and the house renovation.
I do have some plans to pursue a lot more real estate investing after connecting with a very knowledgeable and successful investor who will mentor me in this area. I am very excited about this!
I drove by the Casa Vilora building today, just to say goodbye to it, and I didn't feel any sense of regret or loss. I asked God why, because this is a dream that He had placed in my heart for so long. But He reminded me that what He requires is that with faith, I am also required to act. Any thought that I acted too quickly and made the wrong move, went away when I realized that on top of all the hard work, no vacations and financial sacrifices I made over the last several years to squirrel money away, and the proceeds from the sale of CVI HQ and Columbus land, I can move forward with my plans with no debt if I so choose. But like I said above, I see some unconventional real estate investing in my very near future. And I don't mean flipping houses - that's something I did a while back and never enjoyed it.
Honestly, the only concern I had after making this groundbreaking decision a couple of weeks ago was explaining it to my clients and followers why I am changing course, thus this really lengthy explainer post. hahaha.
I feel a slight sense of freedom actually, but I have to admit that I do have a slight feeling of sadness, only because I won't see all the ideas I had for the space become reality. But just think about how our world has changed within the last two years. The dreams I had back in 2020 may be the same today, but the path to getting there had to change. I have grown and have changed personally as well. I am not motivated by some of the same things I was just two years ago.
I did not want a shiny new office with a ton of debt. I didn't want to be a slave to a large mortgage that would tether me to the business 24/7. I love working in and on my business all the time - it gives me immense joy helping my clients live their dreams, and being a mentor to the designers who look up to me for my strong business accumen, but working this hard and showing up as inspiration is a personal choice, not a requirement.
Thanks to our great clients and wonderful projects, it's our best year in business yet, and we are praying for an amazing 2023 as well.
We should start seeing some progress on the new new CVI HQ on our property in Sealy. Hopefully before the end of the year we will at least have the building shell finished. We are also finalizing renovation plans for the house on the property. Read more about it HERE
A few minor tweaks and it will be ready for structural and MEP soon, then permitting, then we can start the renovations. I may be GC-ing it myself, so stay tuned for that adventure. I may have some big announcements to share about the house soon, so stay tuned - working on some things low-key right now!
Ok, I just dropped a major bomb or two on you all, whatcha think? I would love to know. Comment below.
Thanks for hanging with me through all of this.
Wishing You Beauty And Inspiration!