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Business, Entrepreneurship, Leadership

I want to create long-term wealth that will last multiple generations and that produces cash; among the different options to invest, real estate is a very, very clear option.

Our featured trailblazer is Tawan Davis.

Tawan Davis is the Chief Executive Officer and Managing Partner of The Steinbridge Group, which has structured, executed and invested nearly $1 billion in commercial and residential real estate. Under Mr. Davis’ leadership—which includes managing the investment program and overseeing the day-to-day operations and transaction pipeline—Steinbridge is now investing more than $425 million in the urban single-family home market.

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KEY POINTS FROM TAWAN:

  • I am, and so many of us are, really a product of our collective context. 
  • In my family’s tree, I am the first person that I know with a four-year college degree. There are people who have started and stopped, but I was the first person to go and stick it out.
  • The conservative, religious context in which my mother raised me has a lot to do with that [my accomplishments]. On the one hand my mom was just a stickler for good behavior and ethical behavior, and so I didn’t get involved with a lot of things that other people got involved in.  
  • I grew up with several cousins who are like brothers to me to this day.  There were five of us, and my great-grandmother would have to take care of all of us while our parents worked.
  • I’m the only guy that finished high school in 4 years and not even to mention having gone on to have the opportunity to get a higher education.  So, it was my mother’s unique focus on personal and ethical discipline.  That, plus the fact that I became very involved in my community and in the church very early, gave me a reason to want to go to school, gave me a reason to want to improve myself, it gave me a reason to want to do more and affirm myself.
  • Because I was involved in my church, I was involved in the youth programs, that led me to be involved in the NAACP at a state and national level.  I was a member of the youth and college committee, the national NAACP.  I served as an interim chairman for half a term.  So all of those things exposed me to a whole new world that growing up in Portland, Oregon would not have exposed me to
  • Growing up there, there was not a lot of exposure to very well educated, very accomplished African-American people, and so there were one or two glimpses of that — one was in the church being surrounded by people who had at least some accomplishment, some aspirations, ministers that were forward looking and the NAACP where I met a guy name Lucius Hicks who was chairman of the Oregon State NAACP, and who was the chairman of the Portland School Board, and who was a pusher of education that let me travel with him to the state, regional and national events of the NAACP where I met Merley Evers at the time who was chairman of the board of the NAACP and all of these remarkably accomplished historic leaders in the African American community and that transformed my vision of what was possible as a young man. 
  • My approach to real estate, broadly, is that real estate is a long-term, intergenerational asset class.
  • Let’s start with where you put your money.  Most of us only have so much money, so you’ve got to make a few, kind of broad decisions:  Do you put it in the bank or do you invest it? Do you spend it? That’s decision #1.
  • Decision #2:  If you’re going to invest it, what do you invest in? Do you buy stocks, bonds, options, private equity or real estate?
  • For me, the answer was that I want to create long-term wealth that will last multiple generations and that produces cash; then, among the different options to invest, real estate is a very, very clear option. Then you have to decide, do you invest in the US or Latin America, United Kingdom or Europe or elsewhere?
  • The United States remains the most lucrative, stable, risk-adjusted investment market in the world.  More money comes here than anywhere else in the world, and the United States still produces better returns over longer period of time, because they're stable returns.  You might make more money investing in Latin America one year, but you could also lose more money in the next year.
  • Over long periods of time, the United States, for the developed economy is the strongest investment profile.
  • My mantra is to build long-term, intergenerational, cash flowing assets. So, the goal, over time is to acquire real estate and then augment or increase the cash flow over time. 
  • In the United States there is a perennial demand, a long-term perpetual demand for good housing and for residences, and so it became clear to me that the opportunity in real estate, for my generation, over the next 10-, 20-, 30- years was really in the housing sector, providing good quality housing for American people. 
  • Most good businesses, in fact, all good businesses identify and strategically solve a particular problem.  Solving a problem is the opportunity.
  • There is a huge housing crisis, and how most investors and real estate developers respond to that housing crisis early on was by building really high-end, really fancy buildings.
  • If you are the average person in the United States, if you are a teacher, or a nurse, or a police officer,  or a firefighter, you cannot afford what the real estate development community delivered as a response to the housing crisis. … It’s the wrong solution for the average American family.
  • There is a humungous housing crisis in every major city in the United States for working people, and we all know that because we all feel rents rising; we all feel and observe the displacement of communities like the one I grew up in, where people have been there for generations but can no longer afford the taxes that are associated with those neighborhoods.
  • The solution is not to build yet another glass tower and charge people 4 or $5,000  for rent. The solution here is to invest in the very same neighborhood where  these people, want to live, these nice neighborhoods, these transitioning neighborhoods, these improving neighborhoods, and provide a product that is affordable.
  • I understand how jarring it is, as an African American person, to experience gentrification, but the most gentrification is actually not even ethnic and racial, it is economic.
  • The most challenging part of our business is the people, and I will admit to you that that is an iterative process.  Any entrepreneur, it they are honest, will tell you they never get the people right the first time.  It is either their problem because they don’t know themselves well enough to attract and retain complements to themselves or they have attracted the wrong people.  But I don’t know a single entrepreneur that has done it right the first time. And that's been our experience.  It has been iterative.  I have gone out built teams and then over time, little by little, you better understand what you need and you have to make adjustments. You add people; you take people away.  And so being okay at the centre of this kind of perpetual dynamic and constant change, as a company grows and matures, is a very important part of being an entrepreneur; being at the centre of the changing landscape of people as the company strengthens and matures is very important. So that’s mindset #1.
  • Mindset #2, I think for me, was to identify and strengthen your core.  So once I was able to really clarify what the company needed and attract those people, I have been able to really strengthen and solidify.  I know who the core of our company is.
  • Lesson #3 … it’s so important to be values.  People have to connect with your values.  I always tell people that come to work with us and for us, “I don’t want you to do what I want you to do .  I want you to do what you want you to do.  I want you to achieve your goals.  I don’t want you to achieve Steinbridge’s goals.  But if it so happens that Steinbridge’s goals overlaps with your goals, then we should work together for awhile, and you should join our team.  And, if on the other hand, Steinbridge’s aspirations, goals, values and ethics don’t overlap with your aspirations, goals, values and ethics, then let’s agree to be friends, but we shouldn’t work together.”  
  • I don’t run a manufacturing plant per se, where I just have to attract people just to play a role.  I actually have to attract people to make a contribution. 
  • I am a man in process.  I am a man on a walk.
  • For an entrepreneurial CEO, which is a very specific skillset — the most important skillset for an entrepreneurial CEO is to consider himself an evangelist. I preach the gospel of Steinbridge. I preach the gospel of development, the gospel of empowerment, the gospel of economic opportunity.  I have to be a constant champion for the cause, and that requires a certain amount of passion, it requires a certain amount of clarity.  It requires irrational conviction. 
  • My path has been to beat down the doors of poverty and economic opportunity by building a company, by building a big business, by building a company that employs people. 
  • So, I am passionate. I am an evangelist for my particular calling and that is the calling of economic development and economic opportunity with Steinbridge as a vehicle for that impact.

 

ONE ACTION

  • Write it down! If you don’t write it down, it doesn’t exist.
  • We have limited time on the earth, and we have limited time to engage in a particular pursuit; and so anything we must do, we must put it on a schedule. It has to be a realistic schedule; it has to be an accomplishable schedule.  But it still needs to be on a schedule because if it’s not on a schedule, it won’t get done.

 

THIS EPISODE WAS SPONSORED BY:

The Campaign for Black Male Achievement. Join, support and invest in this movement to help improve the life outcomes of our black men and boys.

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