Learning from a Master Entrepreneur
A mentor once told R. Donahue Peebles that luck is “where opportunity and preparation merge.” Peebles followed that advice and, at age 19, entered the business world with little more than a burning desire to succeed. Peebles, an African-American from Washington, D.C., started out doing real estate appraisals. Seven years later, he became a multimillionaire. Today, Peebles runs a real estate empire and is worth more than a quarter-billion dollars.
In The Peebles Principles: Tales and Tactics from an Entrepreneur’s Life of Winning Deals, Succeeding in Business, and Creating a Fortune from Scratch, the author recounts his “winning deals,” shares his principles for success and demonstrates how he built a fortune from scratch. From his first deal, Peebles learned that playing politics is an inevitable part of any business, and that “it really does matter whom you know and whom you help — and who helps you — along the way.”
A Lesson for Entrepreneurs
While each of Peebles’ deals offers the lessons and business insight, perhaps the most intriguing story is about the entrepreneur’s acquisition of the Royal Palm Hotel in Miami, Fla. Peebles got to know and like Miami Beach while he and his wife vacationed there. He discovered that the city had a unique program that set aside property for African-American ownership. The Royal Palm Hotel had been purchased by the city for the purpose of this development project, and right next to it was another hotel that was for sale, the Shorecrest.
Peebles was shocked to see that the Shorecrest was rundown, but the property was on the beach, so he wanted to buy it. While other hotel developers made low offers for the Shorecrest, Peebles agreed to pay the owners what they wanted, provided that he could get his money back if he wasn’t chosen for the Royal Palms project. As a result, Peebles basically got the property risk-free — and, as provisional owner of the Shorecrest, he gained valuable leverage in submitting a request for proposal (RFP) for the Royal Palm.
He recognized the value of having the right friends in the right places during the Miami deal. Peebles made important people in the Miami community know that he had a contract to buy the Shorecrest, and that he was bidding on the Royal Palm. His strategy was to assure that influential individuals and organizations knew what he was doing and that he was committed to the Greater Miami area. Peebles also put together a 100 percent African-American team to make his bid stronger and more attractive to the city.
Out of the seven bids on the Royal Palm property, five of them included a plan to develop both the Royal Palm and the Shorecrest, despite the RFP’s stated requirement that the Shorecrest had to be privately acquired. Peebles submitted his RFP response with letters of commitment from two banks; no other bidder had submitted any loan commitments.
Although he was the logical choice to win the project, Peebles still faced political opposition. The selection committee actually voted against his bid, but in an unprecedented move, the city commission overturned the decision and awarded the Royal Palms project to Peebles’ development group. With the Royal Palms win, Peebles got media exposure locally and nationally, resulting in access to ideas and contacts. One of those contacts led Peebles to an opportunity to purchase a hotel property in San Francisco, Calif. While the deal fell through because of politics, it offered Peebles another valuable lesson: “Never overestimate your position of strength when it comes to political relationships.”
Why We Like This Book
The Peebles Principles provides a first-person account of an entrepreneur’s rise to fortune, with a behind-the-scenes look at the commercial real estate business. R. Donahue Peebles offers the reader useful “Ground Rules” and a pertinent “Peebles Principle” at the end of each chapter, as well as “epilogues” that accompany each chapter. These elements are invaluable for the reader to gain insight into an entrepreneur’s thought process and see how, with each transaction, Peebles became a more accomplished and successful business professional.