Extraordinary Vision – How Hispanic Business Woman Diana Torruella Gaines is changing Inner City Real Estate
The Maryland Hispanic Chamber of Commerce and Tu Casa Development group is holding a terrific event regarding The State of Real Estate in Baltimore City on April 18, 2013. At the event Mayor Stephanie Rawlings-Blake is going to be headlining an informative program that will feature an informative discussion on the opportunities and programs in the Baltimore City Real Estate & Housing Market including the Vacant-to-Value Program. To learn more about the event and to register click here, space is very limited.
MyCity4Her Media, a sponsor of the Maryland Hispanic Chamber of Commerce and supporter of the revitalization of Baltimore City recently caught up with visionary developer and business woman Diana Torruella Gaines . MyCity4Her wanted to learn more about what gave this phenomenal female entrepreneur the impetus to start her cutting edge real estate development company and why she believes affordable housing should be extraordinary see below…
What is Tu Casa Development?
Tu Casa Development Group is a minority, woman- owned developer that aims to fight blight and provide affordable luxury housing options in Baltimore City. My tag line is “Turning Properties from Ordinary to Extraordinary”.
What was your vision with the project and why did you choose to develop in Baltimore City?
My vision for the project was to be able to make a noticeable difference in the efforts to fight blight in Baltimore City via a cluster development. I wanted to find a quiet street with a manageable number of vacant properties and basically turn it around in its entirety. The 200 Block of North Madeira Street is strategically located approximately 4 blocks from Johns Hopkins Hospital, is a quiet one way street, and is located ½ block away from Butcher’s Hill, which is a fully developed and stable area. I started with 6 units and have expanded corporate holdings to 9 via private purchases and receivership auctions.
Do you consider real estate development a male dominated field?
Yes indeed. I do consider real estate development a male dominated field. I try to keep a low profile and mind my own business. I wear my blue jeans and hoodie to “work” like everyone else. I believe that the transformation of the street has been extraordinary and that the work and progress speaks for itself.
You have a back ground in the banking industry – what did your time in that industry teach you to prepare you for this venture?
The totality of my banking experience has helped me tremendously in my efforts with Tu Casa because it gave me the knowledge and the confidence to be a developer. After graduating from Duke University, I came to Baltimore to work at Equitable Bank, in their Management Training Program. The Program was fantastic and I learned what back then were considered the 4 C’s of Credit: Cash flow, Collateral, Character and Capital. After my credit training, I became a lender specializing in Healthcare. Within healthcare I sub-specialized in the long term care industry, primarily lending money to nursing homes and many of the loans were new construction. The average loan was $12 million dollars. I solidified my knowledge regarding construction budgets, construction funding and post-construction operating cash flow during my nursing home lending years. I was also very fortunate to have a solid mentor.
When did you get the idea to found Tu Casa Development Group?
I got the idea to develop affordable housing because I became aware of the growing number of individuals, primarily Hispanics, that were living in Baltimore and were renting very small units, sometimes even rooms, at extraordinary costs. I wanted to raise the bar on the quality of the development of affordable units located in the developing neighborhoods in the City. After my years in Banking, I took 12 years off to raise my three sons, Charlie, Corey and Bennett. So two years ago I was a homemaker looking for a venture to complement my stay at home status. The Vacants to Value (V2V) Program implemented by Mayor Stephanie Rawlings-Blake in 2010/2011 was the answer to my search because. I was able to leverage off my past business experiences. V2V fulfilled my desire to do real estate development, provided a straightforward application process, gave me a reasonable path that I could follow, and the staff members managing the program were exceptional.
What need does it meet that is unique versus other competing developments?
I believe that Tu Casa exceeds the standard of affordable luxury. By luxury I mean three completely finished levels, a basement with a ceramic tile floor, hardwood floors through-out the main and second floors, a modern kitchen with granite counter tops and stainless steel appliances, a deck for outdoor enjoyment, bathrooms with surround tile and a cement parking pad located in the rear of the units. I then add extras like trey ceilings, a built-in brick flower pot on the outside of the unit, and an i-vision system that allows you to see an image of the person at your door. Through my participation in Baltimore City’s Vacants to Value Program, my buyer can access $10,000 in down payment and closing costs assistance. The asking prices of the properties range from $149,000 to $169,000, depending on square footage. My buyers can generally become homeowners with only $2,000 down out of their own personal resources and a monthly payment of $1,100. It is simply beautiful!
What motivated you to do so?
My motivation to develop in the City was largely based on what I viewed as favorable economics and an opportunity to give back to a City that was my first home after College. I am a firm believer that our country’s economic resurgence will begin in our inner cities, so why not begin by investing in my own City of Baltimore?
I believe that the reason there are few women, Hispanic developers is because access to capital remains extremely tight and limited. I have been very fortunate to be able to fund all of my projects with cash. However, I can candidly disclose that I have recently approached 5 financial institutions in the past 2 weeks because I want to rent one of my properties. In order to continue with my development efforts I want to free up the capital I have tied up in that particular unit. Despite my successful track-record, a 60% loan to value and more than sufficient cash flow coverage of the debt, I have been unable to find a bank that will mortgage my property. It is very discouraging.
Do you feel you’re breaking the proverbial “glass ceiling” in your industry, what are the top four things you did that you can directly attribute to your doing so?
I believe that women have broken the proverbial “glass ceiling” in the real estate industry when it comes to making the decision to buy or sell a house because of the increasing number of single, working, women-lead households, so why not also break that ceiling on the development side? I believe that working for myself was paramount to the success I have achieved thus far. It is nice to be the decision maker. I believe that establishing myself as a supporter of the community early on was also critical. In addition, I have been very open about sharing my knowledge with fellow developers and have presented myself as an ally as opposed to a competitor.
What do you enjoy most about being a business owner?
My favorite part about being a business owner is the people I meet though my work in the City. My general contractor is a young African American that has provided honest, amazing guidance and an extraordinary product along the way. I documented every step of the development of my units through photos and he patiently explained the scope of the work done in great detail. It is like taking a Real Estate 101 Course! Additionally, my street falls under a community association organization called C.A.R.E. and I continue to be humbled by the efforts of the individuals that run the association. They love City living and strive to make our neighborhood safe and blight-free. I also thoroughly enjoy meeting my buyers. I recently had the pleasure of selling a unit to newlyweds.
What if you knew THEN what you know NOW – would you (if anything) do differently?
Honestly, my only regret is that I did not start developing earlier!
What do you believe, are the biggest challenges continuing to face women in business today?
Although significant strides have been made since my early Banking days, the main challenges facing women today continue to be gender related. There is a lot of pressure on women to be “everything”- wife, mother, professional, and do it well. There is a significant amount of stress stemming from an effort to balance professional and personal lives. Longer working hours are leading to what I consider to be higher burnout levels among women. Additionally, women continue to be left out of Leadership roles and, if able to secure those leadership roles, they continue to be paid less than their male counterparts.
What is the best business advice you’ve ever been given and why?
The best business advice I ever gave anyone was to start their own business. I am a firm believer that if you have a talent you are passionate about or a skill you are particularly good at, you should develop it to its fullest. There is nothing better than being your own boss. I encourage people to not be afraid to be entrepreneurs…you only live once!
Do you ever get discouraged? If so, what do you do to stay enthused about what you do and stay motivated?
I get discouraged about once every two weeks! There are so many things that can happen when you are working on a real estate project. We’ve had a supplier burn to the ground, a workman’s compensation claim, a $5,000 water bill for a property that had no water service, a squatter inside a finished property…the list is endless! I look at these occurrences as stepping stones, the proverbial “necessary evil” that must be overcome in the effort to achieve greatness. I stay motivated because I learn. Every day you learn something new is a very good day.
What do you like to do when you’re not working?
When I am not working I enjoy sitting next to my husband and watching any of my three sons play baseball. They play in College, High School and Middle School. My favorite sign that hangs in the kitchen reads “We Interrupt This Family for Baseball Season”.
What are some of the best resources, tools, organizations you’ve found that have helped you grow your business?
The best resources that have helped me grow my business have been local in nature. Word of mouth has been invaluable. The Vacants to Value Staff at the City has also been a solid resource. The Maryland Hispanic Chamber of Commerce has given me the unique opportunity to introduce my product and my efforts to the Hispanic Community in Maryland, and I consider that a real blessing.
About Diana Torruella Gaines
Ms. Gaines was born and raised in Puerto Rico. She received an Undergraduate degree in Economics and Spanish from Duke University. Ms. Gaines has over 20 years of banking experience and in a broad range of advisory services including senior financings, private placements of debt and equity, and corporate strategic and board advice. Ms. Gaines began her career as a commercial lender, including serving as the Head of the Long Term Care Unit of First National Bank of Maryland. Ms. Gaines was hired by GE Capital Corporation to start their Health Care Lending Group. She later formed Healthcare Care Strategy Advisors (HCSA), and completed over $250 million in transactions for private and mid-market companies. After a busy career at HCSA, Ms. Gaines was a homemaker for 12 years. Most recently, Ms. Gaines founded Tu Casa Development Group LLC, a real estate development firm focusing efforts on reducing blight and providing affordable luxury housing in Baltimore City.