Texas Investors Title: A David vs. Goliath Success Story
Everyone loves a David versus Goliath story. In business, it's when the little guy takes on an industry giant and wins.
We see thousands of examples of this every day. Remember when Apple, operating out of a small garage, took on IBM and software behemoth Microsoft? Or, in the '70s when Southwest Airlines' Herb Kelleher battled several major airlines trying to prevent his planes from taking to the skies? There are hundreds of entrepreneurial Davids taking on industry goliaths and winning. We have our own David here in Boerne: Texas Investors Title at 116 West Blanco, Suite 101, in Boerne, led by co-owner, President and Escrow Officer Steve Vallone.
"We're a nine-person title company from a small town with a name most folks can't pronounce, yet we're successfully competing against some of the state's largest title companies out of Dallas, Houston, and Austin," Vallone declares.
"In fact, last year we did over $500 million in transactions on properties all over the U.S. We're living proof that you don't have to be in Houston or Dallas to complete at the highest levels in our industry."
In nearly 40 years of closing experience, Vallone has closed some of the largest and most complex deals in Texas. In 1991, he closed the Houston Center transaction, a group of five office buildings, a mall, hotel, and vacant land in downtown Houston, valued at $510 million, which up to that time was the largest single transaction ever done in Texas. In 2003, he closed the $1.2 billion sale of Shell Chemical-Deer Park refinery to a PEMEX-Shell joint venture. And, in 2013, he closed the sale of the Houston Astros baseball team to Crane Capital with the sales price of $650 million, with a $250 million loan from Bank of America that placed a Deed of Trust against the Astros leasehold estate of Minute Maid Park.
Early Struggles to Success
In 1979, Vallone became a partner in a title company started by former University of Texas football players Chris Gilbert and Corby Robertson. Their company, with an ownership group comprised of some of the most prominent real estate names in the Houston area, experienced tremendous success in handling large real estate transactions.
When the company was sold to Stewart Title in 2006, part of the contract required Vallone to run one of their divisions for three years. When the three years were almost up, he decided to move to the Hill Country.
"I saw a billboard on 1-10 showing this beautiful green with a waterfall at Cordillera. When I checked it out, I knew this was the place to be. It offered a terrific golf course community, acreage with white-tailed and axis deer, wild turkeys, and 25-mile views. That's how I ended up in Boerne," he relates.
After a short-lived retirement, Vallone opened Texas Investors Title in 2010. Despite the fact the real estate industry was going through a recession then, it proved to be a good time to open his new company.
"The best time to start a new company is when your industry is down. That's when capitalization costs are never cheaper," he says.
During the first year he assembled a great team of employees and got all the kinks worked out of his programs so that when the recovery started, he was well positioned to take advantage of it.
Nonetheless, Texas Investors Title struggled its first year because of tough competition. It went up against a couple of good, well-established Boerne title companies run by people who were well liked in the area.
Vallone decided that in order to survive he had to change his business model. He went back to doing what he was best equipped to do and what nobody else in town was doing - handle large commercial deals throughout Texas. Today, 75% of their revenue comes from outside of Kendall County.
To generate business, he assembled a group of partners engaged in real estate - developers, attorneys, investors, and a couple of privately funded REITs (real estate investment trusts). As stockholders in his company, they continually send Texas Investors Title considerable business involving complex, multi-million-dollar commercial real estate deals - both in Texas and out of state.
Most transactions done by Texas Investors Title are in Texas. They are part of the most sophisticated computerized title plant (real property data base) system in Texas, with access to 33 of the largest counties in Texas.
Problem Solver
Besides having an excellent track record and experienced closers such as Vallone and Becky Edmiston, the company's vice president and escrow officer, Texas Investors Title has built a solid reputation as a problem solver. Problems often occur and some deals, Vallone intimates, hang by a thread until they find a solution.
"Once you get a reputation of saving deals rather than threatening them, you get a lot of repeat business," he states.
For instance, the purchase of land in Houston for a Walgreens store was jeopardized when the company's attorneys discovered a 1934 deed restriction that limited the acreage to only residential use.
Despite the deed restriction, Vallone drove to the site to personally check things out and discovered other retail stores on the same street. It was apparent that the restrictions contained in the 1934 Deed had been ignored and were no longer enforceable. He then informed the Walgreens' attorneys that the restrictions were unenforceable and provided express coverage of this issue to the policy. This satisfied all of the parties and the deal closed.
"Little things like that often will work to save a transaction. It usually makes people very loyal because you found a way to save their deal.
"The title insurance fees we charge are exactly the same as every other title company in Texas. So nobody competes on pricing. You compete based on performance," he declares.
There are many title companies in Texas that are good at researching a property, but when it comes to resolving problems some put that burden on the seller before they will close on the property. Texas Investors Title takes an opposite approach.
"We could let the seller hire an attorney at $400 an hour to resolve problems, but we often resolve them ourselves at no cost. Becky Edmiston has become one of the top closers in the state and the two of us work very hard to provide the kind of service that people notice and appreciate. We can save them attorneys' fees, resolve conflicts with other parties to the transaction, and make their overall experience a positive one," Vallone says.
Competing with the Goliaths
Vallone believes that traditionally people in Houston or Dallas have looked down their noses at small companies in rural areas, such as his.
"They assume that all we know how to do is close farm and ranch deals and small houses, and that we can't compete in the arena of downtown office buildings or refineries or the Houston Astros. I believe we've proven them wrong," he says.
"As long as we get the job done, deliver great customer service, and successfully resolve problems, we can compete against anybody in Houston, Dallas, or anywhere else. And the best part is-we get to live in Boerne and they don't!"
This article was originally published in the Boerne Business Monthly in February 2017
