Kip Lewis has been a Texas real estate entrepreneur and business leader for the last twenty-eight years. During this time, he launched and built one of the region’s most prosperous real estate investment and development enterprises, Lewis Investments, based in Round Rock. In a recent magazine interview, Lewis revealed the essentials of business success.
Developing Multiple Income Sources
The top-notch Austin-based business leader said that most businesses fail or reach a point where it is hard to recover when they come across a crisis. The primary reason for this is that they rely on one source of income, and any mishap that affects their income source is usually crippling. Lewis said that an essential for a business that wants to succeed and stay successful is having multiple sources of income. Therefore, if a crisis affects one of its income sources, it still has several others to rely on as it strategizes.
This Austin-based business leader said one of the things the pandemic has made very clear is that no matter how successful an enterprise is, there is always a big enough crisis around the corner that can bring it down. Thus, another essential for business prosperity is planning ahead – to expect a crisis may emerge at anytime. The Lewis Investments founder pointed out that a venture hoping to maintain its success should always have strategies to get through the most challenging crisis that it can face.
About Kip Lewis
Lewis’ journey to entrepreneurial success in the real estate sector is quite remarkable. Before launching his real estate firm in 1992, he was enrolled at Texas State University and the iconic University of Texas, pursuing business degrees. His first property purchase was an MV/RH community that sat on thirty-five acres of land. Lewis’ most memorable achievement is the numerous real estate deals in the historic downtown Round Rock area.
It is during times of economic decline that Terranova Corporation is able to develop and sell lower-quality land and generate steady cash flow from value-added activities like lease-up of residential properties. During the height of the real estate bubble, Stephen Bittel and his son, Chris Bittel, went from $2.5 million to $20 million in cash from real estate by selling parking spaces, retail stores, and undeveloped land His other son, Steven Bittel, bought $13 million in mortgage-backed securities in a concentrated amount.
These techniques are unique to Terranova. Stephen Bittel explained in an article that they don’t just go out and buy land, but that they are flexible in what they buy. When there are changes in the market, they can purchase land or equity.
This is called liquidity. Terranova Corporation, led by Stephen Bittel has significant equity positions in many of the troubled and assets it has purchased. If you’re well vast with commercial real estate investor and have not done a deep dive into distressed asset acquisitions and their importance to a company’s success, then you are missing out on some great opportunities.
Every company must have such an opportunity as part of their strategic plan. That has paid off and certainly was the case for Terranova as well, which has grown its portfolio of assets to $350 million in commercial real estate, a portfolio that is mostly located in Florida. The same precepts apply to Terranova’s position in the most recent real estate downturn, which began in 2008. Stephen Bittel stated that the way to navigate down-business cycles is to look at the “bottom of the top,” which is his term for the part of the cycle that is in deep distress. They see these distressed assets as investment opportunities.
Another strategy that Stephen Bittel likes to employ when things get tough is to get a close-up look at the area’s current leaders. He and his colleagues typically use a company structure called the “deal-tree” to find opportunities for companies that have a solid balance sheet but could use additional investment capital. This sort of approach allows them to avoid some of the potential pitfalls that will often derail other investors.
Stephen Bittel, born in Miami, Florida, is an entrepreneur who began investing in commercial real estate back in 1969 when he was working in advertising and graphic design. See this page for related information.
Additional information about Bittel can be found on https://www.e-architect.com/miami/stephen-bittels-terranova-coral-gables-miracle-mile