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Plenty of mentors and a job he hated helped Paul Silverman go from working retail in high school and college to founding and managing a commercial real estate enterprise in New Mexico.
Silverman, the founder and CEO of Geltmore LLC, was the guest on this week's edition of the Business Outlook podcast, which focused on real estate. The podcast is part one of two episodes. Silverman's sons, Adam and David Silerverman, will be the guests on next week's podcast.
A native of Texas, Silverman worked at a RadioShack warehouse in Fort Worth, Texas, while he was in high school. Charles Tandy, a businessman who had acquired RadioShack, would come into the business at 10 a.m. on weekends and work alongside Silverman and other high school students.
"I got to see the retail business through the eyes of somebody who was very, very successful," Silverman said.
In college, he worked for a retail business owned by one of Silverman's fraternity brothers. His first job out after graduating from college was at a national department store.
"Hated it. Literally hated it," Silverman said. "I literally got fired from my first job."
Here's a preview of the rest of Silverman's story into real estate, which has been edited for clarity.
Business Outlook podcasts come out on Monday afternoons and are available on Spotify, Apple Podcasts, SoundCloud and YouTube.
How did you get into real estate?
"While I was at (my first job) I knew I wasn't going to stay there, and I made the decision that I should get some additional education. So I took three courses at the University of Houston and became licensed in real estate in Texas.
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I left Houston and moved to Dallas and moved in with my older brother. I took a job in 1972 as a real estate officer with what is now CBRE. I worked for two guys from California and they taught me the commercial real estate business — retail sites, location leases and so forth. The regional manager ended up being the chairman of the board 20 years later for CBRE.
In Christmas of 1974, a friend of mine's father owned a tugboat filling station on the Texas Gulf on the intercontinental waterway right outside of Freeport, Texas, and we lived in a wood house with a galvanized roof under the Surfside bridge, and on the other side of that bridge was the second-largest chemical company in the free world, Dow Chemical, and most of its product came in and out by boat. So that was the basis for us buying the tugboat filling station.
So we were able to triple our business at a time when everybody else was locked in.
Two years later, the guy we bought the business from came back. And he says, 'You know that non-compete agreement you got? Well I bought a mid-steamer who is competing with you.' We ended up selling the business back to him for twice what we paid for it two years earlier.
When we did that, I realized that you don't have to live in a big city and compete with Jonesses to be able to make a lot of money. I got married to Adam and David's mother, who is from Hobbs, and we moved to Hobbs April 13, 1977."
I would imagine you would have more opportunities in Dallas and Houston than Hobbs?
"In the real estate business, most people think money is the first thing you need. Well, actually, that's not right. Money is the last thing you need. What you need in order to do a successful real estate project is you need users, and you need opportunities, and you need to find the right site, and you need to get whatever entitlements are needed to be able to create that. And at Geltmore, we have a really, really, really simple way of analyzing that, and it's basically four rules, and it really only applies to New Mexico.
No. 1 is never, ever get in a hurry, because in New Mexico, if you're in a hurry, you're going to end up making a mistake. Second thing is sell it before you buy it. That does not necessarily literally mean what that is, but really what it means is you've got to find the user. You've got to figure out where is the money going to come from to pay for the building that you're going to build.
Rule No. 3 is, prove it on paper before you spend a bunch of money. What that means is that you've got your top line, which is the income. What are your expenses? How much money are you going to spend? What exactly is it? When does that have to be done? If you've got the income, if you've got the expenses, then you know what the net income will be, and that tells you what you need to finance and how you need to finance it, which takes you to the fourth rule of how we do business. If it's a good deal, the money will find it, and if it's a bad deal, you couldn't chase down a $10 bill with track shoes on. So you only want to focus on doing good deals, because the money literally will find you."
It seems like if you follow those rules that Geltmore established, you've kind of taking risk out of it?
"We're not risk-takers. We're not risk-takers at all. There's no need to do so. If you're taking risk, that means that you haven't done your homework. Because the whole point of doing the homework is to eliminate the risk."
When did you move to Albuquerque?
"July 3, 1985."
What was it like to see an undeveloped Albuquerque and have an eye to see future users and apply that formula?
"The fellow that I mentioned that ended up being the chairman of CBRE, when he was the regional manager over Texas he interviewed me. He said, 'Do you know what the job of a good real estate guy is?' Really had no idea, and so I gave whatever came out my mouth, which was obviously not the right answer. And he said, 'No, it's none of that.' He said, 'Your job is to look at a vacant piece of property and understand what needs to be on that piece of property. If you can do that, you'll be very successful in the business.
And so that was one of the things that really stayed with me and caused me to analyze every city I've ever been in, and I've been in a lot of cities in a lot of countries, but they all work the same way. It's all about where do people live, where do they have to go, and how do they get there? That involves every facet of the real estate industry, and that education was incredibly invaluable in the real estate business."
Next week, Adam and David Silverman will talk about recent and future projects the family has spearheaded.
