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Building the American Dream
By Jean Gruss | Editor/Lee-Collier
As a young child growing up in, Israel, Roni Elias knew the importance of pleasing each customer. He would set aside a choice cut of meat or special loaf of bread at the small grocery store his parents owned, gaining loyalty from neighborhood customers.
It's a lesson he carried with him when he came to the United States in the late 1980s in search of a better life. From modest beginnings as an assistant painter in Naples, Elias, 40, is now president of a fast-growing regional homebuilding company called Elias Brothers Communities. The Naples-based company, which had revenues of $28 million in 2005, plans to expand its development and homebuilding operations to Hillsborough, DeSoto and Lee counties over the next five years. Elias says he expects revenues to grow 20% annually and reach $200 million by 2010.
The company already has built more than 1,000 condominiums, single-family homes and villas in Collier County. Future developments include a 400-acre community in an undisclosed area of Hillsborough County, a 500-home community on Three Oaks Parkway in Lee County called Tesone, an 800-home community on Kings Highway in DeSoto County and another 220-home development in Collier. Elias Brothers also recently bought about nine acres on Bonita Beach Road in Bonita Springs for $4 million where it plans to build a corporate campus and relocate its headquarters.
Spray man in Naples
Shortly after arriving in the United States in 1989, Elias landed a job with Israeli friends who owned a painting company in Jacksonville. The company sent Elias to Naples, where it had several painting projects. The young Israeli immediately was struck by Naples because it reminded him of his native coastal home of Haifa on the Mediterranean Sea.
He worked as an assistant spray man, learning to spray paint inside and outside new homes. To earn more money with the thought of one day running his own painting company, the enterprising Elias also worked side jobs using borrowed equipment.
That proved to be fortuitous because the real estate downturn of the early 1990s forced his employer to leave Naples. Meanwhile, Roni's brother Mike wanted to move to the United States and the brothers agreed to start their own painting company.
"I had a good feeling about the town," Roni Elias says. Meanwhile, Roni's American-born wife Maria, whom he had met and married in Jacksonville, left college at Florida State University to join them in their venture. She worked as a waitress at the Olive Garden restaurant during the day and went to school at night to earn a license for the business.
On July 13, 1990, the trio started a company that would eventually be renamed Elias Brothers Painting and Waterproofing. "America was a big dream for everybody," says Mike Elias.
With $5,000 in savings, the brothers bought a used van that leaked when it rained and painted houses for $5 an hour. They worked nights too, using the van's headlights to illuminate the houses as they painted outside.
But the Eliases made sure the van and the equipment was spotless. They wanted to set themselves apart from the painter stereotype of messy jobs and chain-smoking employees. What's more, the Eliases never accepted payment until the job was done. This was unusual because most painters and other subcontractors require as much as half of the total payment up front before they start a job.
The brothers targeted homebuilders and general contractors, who appreciated the payment terms and the brothers' cleanliness and reliability. Roni and Mike wrote down everything. One customer told them to come back the following year and, after noting it down on their calendar, they showed up a year later and won the job. They also carefully noted at what point in the building process their services were needed, so they could anticipate their customers' needs and show up promptly.
In the early 1990s, as the residential building slowdown hit the Collier County area, many large out-of-state companies left the area. That gave the Eliases an opening to increase their business with smaller projects. For example, one of the brothers' first projects was painting 17 homes, a job too small for a large painting contractor but just the right size job for Elias Brothers.
Gradually, the brothers won more jobs. Some of them were sizable, such as a three-month project painting a condominium building. Because they didn't accept payment until the job was finished, they had to supplement those large projects with smaller ones to keep the cash coming in to pay suppliers and a growing roster of employees.
The brothers reinvested most of the profits back into the business, buying equipment and top-quality painting supplies. As a result, the house they shared in Naples was sparsely furnished.
"We ate on the floor and slept on the floor. Everything was the business," Mike Elias says.
Roni and Mike Elias recruited brothers and sisters from Israel to come help grow the business. In all there are 10 brothers and five sisters, and seven of them work in the Elias painting and homebuilding businesses today.
As their reputation spread, the Eliases started turning some jobs down to focus on providing higher quality work. The strategy paid off: In 1994, Elias Brothers Painting won a prized job painting the Ritz Carlton in Naples. They initially were awarded half the job, but when the other painting contractor couldn't finish its part the Eliases took over the whole project. The Ritz Carlton job cemented their reputation, and by 1995 the company's annual revenues hit $4 million.
Moving into homebuilding
As the brothers were building their paint business, they learned all they could about the homebuilding process. For example, they learned the order in which various subcontractors showed up to do their tasks and which ones were reliable. They decided that homebuilding was a natural expansion for their company.
After gaining experience building a couple of small condominium projects in Naples, the brothers bought 60 residential lots at Crowne Point off Davis Boulevard in east Naples for $300,000 in 1997. For the first time, the brothers used bank financing from SouthTrust instead of relying solely on their own cash.
The Eliases never attempted to get financing before, knowing they probably wouldn't get it without a good track record. Now, with their successful paint business, getting financing was much easier.
They sold the first homes at Crowne Pointe for $99,900, a far cry from today's prices. Today, the median-priced home in Collier reaches $500,000. But the project was profitable then, and it launched Elias Brothers Communities.
Emboldened, the brothers bought another 10 acres at Crowne Pointe, but this time the land did not have utilities and other infrastructure in place. So the brothers learned on the spot about land development. Fortunately, brother Danny Elias was a mechanical engineer and oversaw their first development project. Meanwhile, Roni watched and learned as power and telephone companies installed their lines. By 1998, the homes at Crowne Pointe were selling for $110,000 to $130,000 each and the company was easily making its profit targets.
The brothers quickly realized that controlling both the land development and homebuilding process was the key to being able to price the homes with more certainty of profits.
As the housing boom was starting, they realized too that national homebuilders would be converging on the area with the same strategy and Elias Brothers wanted to be ready for the increased competition.
The brothers became more ambitious, buying raw land and going through the rigorous process of rezoning it and obtaining permits from regulatory agencies such as the Southwest Florida Water Management District.
The extra time and effort paid off. When Elias Bros. started building the 416-home Ibis Cove development on 86 acres off Immokalee Road in 2000, the company built it out 18 months ahead of schedule. Homes that started selling at $200,000 reached $400,000 near the end of the development.
Subsequent developments met with similar success, boosted by demand from a surging population growth. The company's latest project, 294-home Tuscany Cove near Immokalee Road in Collier County, sold out by June 2005, less than a year after going to the market.
Building for the future
As Elias Brothers Communities grew, the brothers realized they had to secure much more land for future development. "The availability of land is north and you have to follow that," says Mike Elias.
As a result, Elias Brothers has secured a total of nearly 1,000 acres in Hillsborough, DeSoto, Lee and Collier counties to build more than 2,000 homes and achieve 20% annual revenue growth in the next five years. Elias Brothers also is looking at other sites up and down the Gulf Coast, though the brothers decline to be specific.
The company recently received financing for the construction of a new corporate campus in Bonita Springs. The three-building campus will total 134,000 square feet and will include offices, day-care facilities, a dining hall and fitness center. Construction is scheduled to start in March and the company will move its headquarters from Naples when the first 50,000-square-foot building is completed later this year.
The new headquarters serves two functions. First, as growth moves northward, the Bonita Springs location will be more centrally located than Naples. Second, and more important, the Elias brothers hope the new facility with its amenities will help them recruit and retain good employees to sustain future growth.
"Loyalty," says Mike Elias, "is very important to us."
TIPS FOR SUCCESS
Coming to America
The Elias family built a successful homebuilding business in Naples after emigrating to the United States from Israel. Here's how:
1. Don't take payment for a job until it's done.
2. Focus on quality, rather than quantity.
3. Learn all you can from your customers and suppliers so you can do a better job. Put yourself in their shoes.
4. Always pay your vendors and suppliers on time.
5. Reward loyalty.
6. Treat employees like you do your family.
7. Share your vision often with your employees. You can't do it all by yourself.
8. Keep a clean worksite.
9. Write down and keep appointments. When a prospective customer says to come back next year, do it.
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