Dennis DeGrazia is the President of Community Energy Services, a managing partner in D & M Boca Development, Boca Raton, Florida, 1201 Neely’s Bend Road, LLC (Nashville TN) redeveloping 33 acres on existing industrial land outside of Nashville, as well as being involved with other LLC’s in real estate development marketplace.
With Community Energy Services Dennis DeGrazia performs a cost benefit analysis for energy upgrades in large multi-family buildings and affordable housing facilities, throughout Massachusetts. Having both the knowledge on the subject and a passion for the work, CES is a leader in the LEAN Program, Low-Income Energy Affordability Network. Since its inception, CES has completed over 30,000 units for both Boston Community Development, ABCD, and Action Energy.
Being a seasoned builder and developer, this Dartmouth graduate and father of five, Dennis DeGrazia was the CEO of a contracting firm that worked on projects including schools, libraries, public safety complexes, medical and universities facilities, as well as large residential gated communities.
How did you get started in real estate development and what inspired you to do so?
I began as a builder working on state, federal and municipal projects in the Massachusetts area. The company grew and moved into working on FAA projects throughout the country. Wanting to get into the real estate market we met with a local developer, who was looking for partners. My partner and I were the builders and I became a co-manager member of the development team for that gated community. This was an existing gated community and we finished developing the phases and turned it into a large condominium project. I learned a lot about the development side of the equation and cut my teeth on this project.
How do you make money in real estate?
I’m involved with a couple of different LLCs at the moment. One is in Florida, D & M Boca Development. We build luxury homes on intracoastal waterway areas, all are considered high end luxury waterfront properties. We buy existing homes, demolish those and build new. We handle all of the architecture, infrastructure, and interior design work with the team we have assembled.
The other LLC is in Nashville. Currently, we’re working on 33 acres of an old industrial site with an existing office building and homes along Neely’s Bend Road. Over the next three to four years this will be built out as 130 single family homes. Again, we’re the developer so we’ll oversee the infrastructure and developing the lots to be sold to large publicly traded builders, who will take down phases and buildout the pad sites over this time period.
From the time you started in real estate development how long did it take for you to become profitable?
Each project has its own process and challenges that must be faced, and it’s not always the same people involved. I would say though, despite some hurdles and unforeseen issues, in the end, we were able to make a profit on the first project.
When you were first starting out was there a time that you doubted this was going to work? If so, how’d you handle it?
There’s always a concern when you’re dealing with real estate. Again, there is a process with each project. Part of that is fully understanding the financial risks, you must be able to develop and understand financial pro-forma that needs to be developed first. All indirect costs, and direct costs, must be thoroughly established and understood. The cost of engineering, architectural, permit requirements, and things such as any hazardous waste or a lot of rock blasting that may need to be removed, must be assigned a budget number. It all must be figured out on paper first, to see if it’s viable to continue. Once your confident and sure the project is financially feasible, then you look to solidify your development team and hire the necessary experts.
What is one marketing strategy, beyond referrals, that you’re using that’s working really well to generate new business?
Well, for example in Florida, we work with a local brokerage firm(s) and they market our products. They’ll have open houses, or advertise online, posting pictures on MLS listing sites. We may partner with them to stage a home with furniture to give it more a home feel and not just and large empty house.
What is the toughest decision you’ve had to make in the last few months?
Probably deciding which opportunities to pass on and which ones to act on. I have opportunities constantly being presented to me. Just knowing which one is the right one is a process of evaluation.
What do you think makes you successful?
I always create opportunities for myself or my businesses. I look for niche opportunities and try and capitalize on them when possible. I’ve always worked hard and been able to focus on what I want to achieve. Being driven to succeed is a good trait.
What has been your most satisfying moment in business?
I think it’s a really good thing when a project goes smoothly. When everyone and everything just clicks, and the project is completed from start to finish with little to no problems. And at the end of the day, the Return on Investment (ROI) is realized by the partners.
What does the future hold for and what are you most excited about?
The future of the real estate development business is directly tied to the economy and real estate market. If the economy is favorable, I’ll continue to invest in real estate opportunities. If the economy starts to slump, I would have to slow it down as I did in the last down turn. I try to stay conservative so I don’t have a lot of outstanding debt, and that is one thing I would have to watch if the market slowed. Additionally, I have diversified into other industries unrelated to real estate development. Diversification helps offset the high and lows in one industry or another.
What business books have inspired you?
I’ve read a few and I listen to audio books. I liked The Art of the Deal. I know not everyone is a fan of Donald Trump, but I really enjoy those kinds of books, books about the economy, trends and where some experts I follow see things going are all interesting to me.
What is a recent purchase that you’ve made to help with?
I guess it would have to be the land acquisitions in Florida and Tennessee, those are our focus points. We also have several hotel opportunities we are working in Rhode Island. Those are boutique hotels with 36 to 45 units. They are intimate in scale, creating a more personal experience rather than just another hotel room.