The path to success is far from easy, which is a lesson Quattro Development’s founders, Rob Walters and Mike Liyeos, know all too well. After founding their real estate development firm during the Great Recession in 2008, the duo received a crash course in perseverance.
Today, Quattro Development is a small-shop developer for chain brands across the United States. However, Quattro Development experienced many challenges in its early days.
Instead of looking at their failures as setbacks, Walters and Liyeos credit their present success to their ability to bounce back from challenges. The duo recall their most profound failures as co-founders, as well as the steps they took to overcome misfortune and become a premier national developer.
Overcoming Lost Accounts Through the Power of Networking
During their first year of business, Rob Walters and Mike Liyeos toured the United States to deepen their understanding of the market. “The first year we really spent just trying to be cheap and learn real estate around the country. Then we signed a couple of leases with a dental group out of upstate New York,” Walters says.
The pair experienced the thrill of signing their first account, but it wasn’t meant to be. “Unfortunately, they ended up going bankrupt in the financial crisis and we were back to square one,” Walters says.
Undeterred, Walters and Liyeos pushed forward to compensate for the lost account. “We had, by that point, made quite a few connections in the industry,” Walters says. “We put together a deal with Chipotle, and a deal with Vitamin Shoppe, and a project with Aspen Dental. That got us through a really tough economic time.”
Avoiding Poor-Quality Work Through Referrals
Rob Walters and Mike Liyeos credit Quattro Development’s success to their small but scrappy team of eight employees. But in the early days of their business, Walters and Liyeos had to learn what it took to build an effective, trustworthy team.
They found it difficult to vet local contractors, so the two relied heavily on their personal relationships to find trustworthy connections across the United States. “Ideally, we use somebody we’ve already worked with in the past, so we have a level of confidence. But if we haven’t, then it’s just doing research on what other projects they’ve done. Maybe getting some references,” Walters says.
The co-founders experienced initial hiccups in their internal hiring processes, too. “We’ve had mixed bags with hiring people that were somewhat related to us, friends or family,” Walters adds.
Instead of bringing on fresh team members based solely on their expertise, Walters and Liyeos believe in hiring for culture fit first. “When we’ve been potentially hiring new people, we have them come in and meet with everybody in the company just to get a feel if anybody wants to say, ‘Hey, that guy didn’t feel right to me,’” Rob Walters says.
While Quattro Development initially experienced some setbacks with outsourcing and hiring, it’s the secret to the company’s success today. Thanks to hiring both contractors and employees based on old-fashioned referrals and networking, Quattro Development now has a solid crew. “I think we’ve been pretty good at finding the right people,” Mike Liyeos concludes.
Persevering To Find Financing During the Great Recession
Rob Walters and Mike Liyeos founded Quattro Development during the Great Recession. At first, funding seemed like a nonissue. “When we started our company, we had an equity partner that was going to be our money. Mike and I did not have any money from our families and we hadn’t raised any. That was really what had us go out on our own and feel comfortable with it,” Walters says.
However, the recession hit, and Quattro Development found itself without funding. “[The equity partner] ended up going bankrupt. We had this business planned and then we didn’t have any money,” Walters explains.
This financial failure could have quashed the co-founders’ vision, but they persevered to find backup funding. “We went and just talked to anybody we could about getting equity for ground-up real estate projects, but it was the middle of the great financial crisis. Finally, a guy gave us five names and we met with four of them, and none of the four were interested. The fifth one ended up becoming interested and did 40 projects with us on the equity side,” Mike Liyeos says.
Continuing To Look for Accounts, Even When Major Deals Are Imminent
As they grew the company, Rob Walters and Mike Liyeos worked to achieve bigger deals for Quattro Development. They secured a contract with the grocery store Lidl for projects on the East Coast. “They were going to pay $4 million for a property that we had purchased at a much lower price. It was going to be a very profitable project. We had about 18 months of working with the city on it,” Walters explains.
But again, the project wasn’t meant to be. “They bailed on it literally the last day of our diligence. We’ve had to struggle and find backup options,” Walters says.
Losing Lidl as a tenant in the project taught Walters and Liyeos an important lesson: Never make assumptions. “Don’t count your chickens till they hatch because even when things look like they’re 99% going to work out, they don’t always,” Rob Walters cautions.
Perseverance Pays Off: Quattro Development’s Bright Future
Mistakes and failures are bound to happen over the course of any business, and Quattro Development is no exception. What matters is how business leaders navigate these failures and create a stronger company on the other side of adversity.
The co-founders overcame lost accounts and financing woes to build their small but mighty development firm. Quattro Development’s tenacity has paid off. To date, Walters and Liyeos’ company has completed over 150 projects across 31 states, with many more projects in the works.
