For those who do not follow real estate closely, Jorge Perez is the southern half of The Related Companies. (The northern half is his partner, Stephen Ross, who developed the highly successful Time Warner Center on Columbus Circle in New York City and who has just inked a deal with the Metropolitan Transportation Authority to create 12 million square feet of commercial space and residential towers above Manhattan’s West Side Rail Yards.)
Perez has been the premier developer of quality condos in Miami and Miami Beach and, most importantly, is still solvent and doing quite well, thank you, in spite of the bursting of the real estate bubble. Perez and The Related Companies have a well-deserved reputation for upscale excellence that has served him in good stead.
How did he do it? Get rich and not go broke like many of his overextended competitors? What is his secret? Well, it is a bit like the secret to losing weight: eat less and exercise more. Perez is a tireless advocate of financial discipline, hard work, and SMART work. He knows his territory, he studies his customers, he knows his product, he knows his banks, he knows his subcontractors….
Even though he is well on to his second billion, Perez still runs scared, still acts and invests as if he could lose it all. In other words, he is aware of his downside on every deal and works hard to keep it minimal.
Perez strives to know not only his job, but also the jobs of everyone around him. He advises readers to continually pick the brains of all their advisors, to find out WHY they give the advice they do, to learn as much as possible from them. In effect, make them your tutors.
He evidently is committed to being a life-long learner and instructs potential investors to “read, read, read, read.” That’s right, he says it 4 times.
While far from a how-to manual (Perez sends his readers elsewhere to get an understanding of IRR), he does give a lot of practical advice, tells a lot of stories that give the reader a good flavor for real estate and help to make the book flow well.
– Five Guiding Principles
Passion is when working hard inspires you to work harder.
Don’t let challenges stop you.
Worry about real problems that you can prevent.
Your first loss is your best loss. Learn from it.
The only real defeat is not trying.
– Four Keys to Successful Investing
– Ten Commandments of Negotiation
– Five Rules for Securing Financing
– Selling It: From Buzz to Frenzy in Five Steps
– Eight Rules for Building Profits
– Four Keys for Managing and Growing
– Three Principles of Change
A lot of common sense, but would that common sense were common practice. Perez writes in an easy-to-read manner, tells stories that make his points easy to remember, and covers the same topic from different angles, which I believe is important to drive a point home and to make sure the reader remembers and uses the information at critical decision points. To know and not do is to not know!
In the interest of full disclosure, I own a condo in one of Perez’s first developments, the Portofino, in Miami Beach. I almost bought it directly from Related when the building was under construction, and I briefly met Perez at that time. Instead I bought in Manhattan. Years later I bought the same unit from the second owner and paid about two and half times what I would have paid Related. Also, we are both members of YPO/WPO and I have heard Perez address a meeting in that context.
If you want a more technical approach to real estate investing, check out my textbook, “Construction Funding: The Process of Real Estate Development, Appraisal, and Finance”