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Saturday, May 16, 2020

Pandemic Sales

When the virus lockdowns began, or as the restrictions trickled in, my main concerns were 2 fold.  How to plan for the future, and how to finish the 5 homes we had under construction that were more than 80% done?  What 'more than 80% done' means to my business model is that I'm fully invested, cash in the game, debt levels elevated, etc..., and the ultimate sale rectifies that.

Now, compared to many people who do what I do - though to be honest, it's no one local since the organizational and banking wherewithal exceeds what is out there and available - I keep pretty conservative debt levels, for the risky business I'm in.  My bank lends based on progress, and it barely lends enough to cover the cost of the home (not complaining) meaning the thousand other costs are being paid for by sales and cash flow.  I have a lot of my own money in the game as well as a somewhat safe investment with a decent return - I charge Catskill Farms a little more than the bank, but what's a few hundred basis points among friends.

Anyways, regardless of whose money it is, it would not have been fun to be sitting on $3.6m of nearly completed real estate.  That would lead to intemperate outbursts and short fuses and a general 'sky is falling' overreaction to any day to day issues we have every day.

We also had 4 homes $425k+ on our lazy meadows real estate side go into contract, or sell during this time.

Long story short, with the closing of Barn 35 yesterday, mission accomplished.  No easy feat navigating this brave new world with $3m+ and 12 employees and 14 clients and dozens of subcontractors chirping at the nest for feed, but navigate it we did.  Navigated the building departments (4 of them), the health departments (2 of them), the banks, appraisers, home inspectors, radon installers, spring mud/rain.  Literally dozens of players, each impacted and interpreting the evolving state rules being handed down each day.

So, really, a gigantic shoutout to all these folks for finding a way to help us tip toe along to the finish line.  I know the reason we got it done is because I'm a very forward-looking person, don't tend to get caught on my heels, tend to think many eventualities out with a clear view of probability of each, and have awesome employees and banking and vendor and municipal relationships that count for everything when shit hits the fan.  Everyone thinks they have a good team until put to the real test, which is not when the economy is perfect and people are begging for product.  It's when shit gets real messed up, and you need to have targeted action and you need it done how you want it done, when you want it done so you can inch along, like a blind person with his stick, or how you use your feet to survey the ground in front of you when walking in the dark.

I like challenging times.  It continually proves who we are as a company.  I could've have done without the pandemic, though, and would have settled for a good old fashioned credit crunch stock market correction that knocked all my over-leveraged competitors on their ass, but hey, you can't always get what you want.

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