Eric Ammon migrated away from his political science degree to pave his own path in the real estate world. He now focuses on multifamily properties within the commercial real estate industry. In this episode, Eric discusses his winding journey into the industry and how it always “pays to be nice”.
Below is an excerpt from the interview. Listen above for the full podcast.
How did you start your career? I first got started in real estate when I was 20 years old. I was at the University of Cincinnati and they had a co-op program where you'd go to school for six months, work for six months, and repeat. So I went to my co-op counselor and I said “I'd like to work in real estate,” but we didn't have a real estate co-op. I said “Do you mind if I go create one?” So, I went downtown, knocked on some doors, and I convinced the local real estate firm to hire me. I worked there for about three or four years in Cincinnati. Then I graduated from the University of Cincinnati, went to work for the Vantage companies, and was a property manager for them. I worked on office buildings and warehouse buildings.
Later, I went to work for a large insurance company in Cincinnati as an investment property manager overseeing joint venture partnerships all across the country. Then I got the opportunity to run the Asset Management Department when I grew it from $250 million book value in 1986 to $500 million in book value in two years. So they were foreclosing on things all across the country.
How was your experience in property management? I liked the business. I've always liked the business. It's hard work and it's not fun. Very ungrateful.
We were foreclosing on hotels, office buildings, shopping centers, apartment complexes, you name it. They had it from California to Florida. So, I got to travel around and see a large part of the country.
How did you pave your own path into real estate? Well, I've had the privilege of working with some great people in my career. They directed me, but I went off on my own because I was young and arrogant. I did things and then came back and asked for permission later. I did that a lot. Made my boss crazy.
I was around 27-28 at the time, where I would just do things. Somebody wound up foreclosing on a 1100 SF garage in downtown Austin and they had $11 million in the deal. When I came back with a cash flow model, it was somewhere around $3-4 million. The guy had a stroke. He was not happy. I couldn't figure out who the right buyer was and then it dawned on me. I picked up the phone, called the city manager, and said “I'd like to sell you the garage right next to your beautiful convention center. I'll even wait for you to raise a bond.” Then we sold it to him for around $6-6.5 million and got out.
Why real estate? The reason I got into real estate to begin with was because it's recession proof. It doesn't go away. I'm thinking to myself when I'm 20 years old, “what can I get into that's never going to go away?”
With the recessions, the people in the real estate world were crushed, but they still had to manage. They still have to market. They still have to buy and sell. So, I thought “I'm going to get into real estate.” That's how I got started.
How did you join SVN | SRD? I was going to try and do brokerage. However, I was fortunate enough to get a few listings early on. It's worked to my advantage over the years and it's been a great place to work. I haven't worked in a nicer office than this one.
Presently, I'm going to refocus back to multifamily and mobile home parks throughout Central Florida.
Why mobile home parks? They're crazy good investments if you know how to run them properly. We've sold five parks in the last three years. You'll typically get a handful of offers the first day.
People are coming from wealthy areas to invest. They're coming from California, they're coming from New York, and they look at Florida real estate prices, and they go, “that's not bad.”
Have you worked on any land deals? Land deals are the hardest because they take forever. There's so many variables that come into play. Brokerage wise, if you're selling cash flow, somebody's going to buy that. With a piece of vacant land, they're going to have to visualize it and they're not going to get a return on it for a while.
What's the biggest transaction that you've done? It was a $98,000,000, five-deal apartment portfolio. After they've accepted the offer, we go down to meet with them for the first time face-to-face. There was some friction in the room and the decision-maker got up and walked away from the table. I looked around the room and said, “Everybody put $1 on the table. For five bucks, I'm going to put this deal back together.” They all coughed up their dollars, I walked back, and said, “Sir, I'm really sorry that happened. I apologize. I understand why you're upset.” He wanted me to negotiate a certain number for him. I said, “I can't do that. Do we have a deal?” He goes, “Yeah, you have a deal.” Sometimes it pays to be nice.
Listen and subscribe to In Our Expert Opinion