Why This $82 Million Startup Hires Really, Really Slowly
Born in 2014, the Garrett Companies is already one of the fastest-growing private companies in America. The real estate startup’s business model and unique hiring practices might explain why. This story originally appeared on Inc.com.
Eric Garrett vividly remembers his first apartment. He was 5 years old, living close to the poverty line in Evansville, Indiana, and his single mother had finally saved enough money to afford a security deposit and first month’s rent. As they stood in a room devoid of furniture, with their few boxes of belongings, Garrett felt an acute sense of pride: They had a home that was only theirs.
Now 41, he develops, builds, and manages apartment complexes for other families across the United States–successfully, if you judge by revenue from his four-year-old startup The Garrett Companies. In 2014, the company made $550,000. Last year, it pulled in more than $82 million, and this 14,822 percent growth rate earned it the No. 10 spot on this year’s Inc. 5000 list of America’s fastest-growing private companies. According to Garrett, the 47-employee company is projected to make over $238 million in 2018 revenue. (He says the company is profitable, but declined to give specific figures.)
The multifamily apartment business has been a particularly hot niche in the real estate industry since the end of the Great Recession, when people’s ability to buy houses cratered across the country. Even now, multifamily construction is more than double its historical average since 1991, according to Rick Palacios Jr., director of research at John Burns Real Estate Consulting.
Garrett’s timing was good, but not perfect. He left Indiana State University six credit hours short of graduating in 1999–he’d earn his degree a few years later from Indiana University–and fell into real estate during a stint at a regional bank’s credit department. Tasked with working on the bank’s financing of a real estate transaction, he was shocked to find the broker making four times his salary on the deal.
In 2008, after a few industry jobs, he decided to start his own firm–but a lack of business due to the recession forced him to partner with a local development and construction company instead. The partnership lasted more than five years, with Garrett leaving because of what he describes as managerial and personal differences.
The Garrett Companies was born a day later. Garrett was the lone employee, his office a card table and a laptop in his Greenwood, Indiana, barn. Within a week, he’d made his first hire. A month after that, he’d personally funded a move into a proper office space.
TO CONTINUE READING, PLEASE VISIT INC.COM: https://www.inc.com/cameron-albert-deitch/2018-inc5000-garrett-companies.html