Newcomer No More
Realtor Tom Krause knows about failing and starting over.
After a tough divorce and moving north to Traverse City to be closer to his son, his new life was met with a bumpy beginning.
“I had been doing real estate in the Flint area and took a real bad hit in ’06,” said Krause. “I had backed a guy in some restaurants and lost everything. I was starting over with no reserves.”
Krause parked his camper – his new home – at Timber Ridge Campground and helped around the campground on weekends to help pay his rent.
That winter he ran out of heat – and money – and moved into a generous new friend’s basement.
Meanwhile he began spending his days at Brew, a downtown Traverse City coffee shop, meeting and chatting with everyone he could. He attended every TCBN Recess event in effort to network with professionals.
He soon did some work with RE/MAX Bayshore Properties and eventually went out on his own.
“I just decided I’d handle whatever comes in the door, and I started to hear from people I’d meet, ‘I’m looking for a house.’ So I started helping them,” he recalled.
“I don’t want to start over ever again. Ever,” he said.
Based on the past few years, he likely won’t have to.
From Zero To 60
Krause Realty Solutions might still be the newest player in a crowded, competitive northern Michigan real estate market, but it’s no longer the very smallest. A few high profile commercial projects – including the new TBA Credit Union building on West Grandview Parkway and the former Lear Manufacturing building on South Airport Road – have catapulted Krause’s name and numbers into the top ten commercial real estate brokerages. And now he has his sights set on the residential market.
“Commercial and industrial is just what came in first,” he said. “Downstate I handled residential really only for friends and family and did mostly commercial there. But up here you have to be more diversified. You can’t really make a living year round with just commercial. So now I’m about 50/50.”
Krause got his first taste of real estate at 16, when he and his brothers urged his father to buy a house that they could fix up.
“Our neighbor’s house was in foreclosure, and [brother] Steve and I told our dad we would do all work if he put up the money,” he said. “We cleaned it up, painted it, did the drywall, and eventually sold it. It paid for my first car.”
Krause had worked for his father’s small manufacturing business for years as a driver, janitor, or whatever minimum wage position was available. He assumed he and his three younger brothers would someday take the company over, but when his father died suddenly when Tom was 20, the company was left without a real succession plan.
Krause’s mother tried hiring new management and making a go of it, but the operation quickly foundered. But it did present Krause – who had recently moved home from Michigan State – another crack at real estate.
“My mom had a four-acre lot in downtown Howell, and the nearby landlocked neighbor offered my mom $20,000 for it. It was worth $60,000,” he recalled. “So I told her to hold off and give me a chance. I went and bought a chainsaw, lawnmower and stakes and cleaned it up and marked it like it was going to be divided into lots. The neighbor came out and asked what was going on, and eventually agreed to pay full price.”
It was another early lesson about getting creative to get results.
Highs And Lows
By the late 1980s, a friend invited him to a seminar in Texas about developing mini storage centers, a new trend at the time. Krause attended, and in the ensuing years teamed up with his brothers to build nine such centers around Fenton, Howell, Heartland and Brighton.
Real estate and development began to accelerate. Krause and his brothers purchased a house on a downstate lake. They bought an apartment complex in Fenton. They built a condo complex. They partnered with a Fenton developer to purchase a business park called Silver Lake Village. Krause helped Kmart locate a parcel for a store in Fenton. Times were high.
But then, inevitably, the market and risk caught up. An investment in a car wash cost Krause tens of thousands. And then, with an eye toward a big opportunity, Krause purchased Mt. Mariah Ski Resort in Alpena. Having worked part-time for several winters as a teen at Mt. Brighton downstate, he felt he knew the business. But just a few short months after the purchase, Wurtsmith Air Force Base in nearby Oscooda closed, taking with it the largest user base.
“The base used to pre-purchase hundreds of passes every year,” he said. “I was on my way to pick up the check when the base commander called and said, ‘We’re closing.'”
It was time to start over again. Eventually Krause got back on his feet and began selling commercial real estate again with Cooper Commercial in Genessee County.
Out Of Box, Under The Radar
Through it all – the big gains and public defeats – Krause said his optimism and creativity are what drive him personally and professionally.
“I think outside the box in everything I do,” Krause said of his approach. “All those things I’ve done and my failures in my past have come to help me here and now. My clients benefit from that.”
He points to examples like the downtown building owner who didn’t want to sell but was convinced by years of persistence, or the client who struggled to sell his commercial building but has seen success based on Krause’s recommendation to demolish it and build affordable townhouses, which are in high demand.
TBA Credit Union CEO Karen Browne said she first met Krause at a Rotary meeting “and we were immediately impressed with his enthusiasm.”
She echoed Krause’s “out of the box” comment, noting he goes out of his way to accommodate his client’s needs…and offers suggestions and solutions that may not have been thought of before.”
Though many of his peers applaud the company’s rapid growth, other real estate professionals wonder why Krause himself isn’t more active within the real estate community.
“I don’t hang out or go to realtor functions,” he responded. “I go where they aren’t. I go where clients are. I like them, but I just enjoy being under the radar and doing my thing.”
He said he knows his place in the market: A small, niche player. “I want the deals everyone overlooks. I don’t compete with the big guys because I can’t.”
And at this point he’s not competing with the “big guys.” Krause Realty Solutions has four active sales agents and 70-80 home listings, as compared to the thousands listed by the likes of market leader Coldwell Banker Schmidt.
Krause marvels at the current red-hot real estate market where prices are high and homes sell quickly. “It’s nice,” he said. “Unlike those days in Flint when nobody wanted to be there, everybody wants to be here now!”
But even if he someday has to start over yet again, Krause says he’s ready for whatever comes his way.
“I just don’t quit. I get down, sure. But I work through it and hopefully there’s a better plan for me. Every day you start unemployed, you know? You get up and go to work. Something always happens and it all works out.”