Acclaimed for his real estate artistry, Frank McKinney has developed remarkable speculative home projects along the South Florida coastline for over 25 years. One of McKinney’s latest visions generating international buzz is his Micro Mansion, which is set for completion on New Year’s Eve, 2016. We interviewed Frank for his insight into the buyer profile of today’s ultra-wealthy, what distinguishes the Micro Mansion and ultimately, “What is it all for?”
There’s often a lot of publicly perceived risk regarding the projects you undertake. Do you also perceive the projects to be risky or do you consistently have high levels of confidence regarding the success?
Frank McKinney: I’m a firm believer that you have to exercise your risk-tolerance, like a muscle. Eventually it will become stronger and able to withstand greater pressure. This is all I’ve known for the 30 years I’ve been in the business and 25 years I’ve been creating high-end homes on the direct oceanfront on speculation. I have never known when I’m going to get paid. The general perception would be that’s extremely risky. How does he know when he’s going to eat, pay the mortgage and pay the light bill. But for me, because I started risking on much smaller properties — I did hundreds of houses worth less than a hundred grand — after 5 years of doing that, we moved to the oceanfront and by that time, I see these as opportunities, not risks. If I weren’t to pursue them, and if I were to let them be taken away by fear, then that would be an opportunity lost. My biggest risk is in not pursuing these opportunities.
I’m really building to the profile of an individual buyer, I’m not building to or for an individual, but I’ve become acutely aware of the thought-processes of the ultra-wealthy. If you strip it all down, I’m in the business of knowing what the ultra-wealthy want before they know they want it. The ultra-wealthy buyer enjoys a lifestyle that most people only dream of. They stay in premier resorts across the country, they have 5 houses across the world and get there by private jet. My job is to anticipate what they’re going to need before they know they want it, and that’s something that’s been developed over 25 years of providing what I refer to as a lifetime achievement award for the ultra-wealthy — that award being the multi-million dollar home they choose to purchase from me.
Can you tell us a little more about the luxury buyer profile, for example, where the buyers are typically coming from, whether that be domestic or international?
Frank McKinney: Well, there’s the geographic profile and there’s the psychological profile. The geographic profile is statistical, but to me it doesn’t really matter where they’re from. It’s psychologically being able to profile what it is I believe they want tomorrow vs what they wanted 10 years ago, 5 years ago, and it’s undergone a distinct evolution that’s become quite revolutionary.
And how they go about making their decisions… are they shopping more, are they shopping less? In other words are they looking at 2 houses and then making a decision or looking at 10 houses then making a decision? It has a lot to do with the environment in which we’re in today. I call it the “140 Twitter character mentality.” We all have attention-deficit. We don’t have attention-deficit disorder, sure some of us do, but most of us are suffering from attention-deficit, especially the executives, the high-powered, the ultra-wealthy; they’re being pulled in so many directions by the opportunities that are out there, lifestyle opportunities. When I design a house, I have to tap into where I believe those lifestyle opportunities are today and tomorrow. That’s the psychological profile, rapid-fire decision-makers, looking at less properties than they were in the past, and having less time to do so.
Besides providing the ultra-wealthy with what they want before they want it, the other business I’m in is the time business. I’m delivering the one aspect to the ultra-wealthy that they have no control over; time. Sure, they could choose to hire a contractor, buy a piece of land, design a house and go through all the permitting and related challenges that I go through to build a spec. house. Or they could let me execute on the gift God has given me, walk in the door on a Tuesday, love what they see and have their head on the pillow on a Friday. That’s what I’ve done. I’ve cut two years of aggravation out of their life and they are able to enjoy that turnkey piece of three dimensional art that has a car in the garage, linens on the beds, towels in the closets and a gold-plated toothbrush in the bathroom. I mean it’s ready to go. That’s the psychological part.
Now the other part is what geographic location they are coming from and what’s their average age. So, back when I first started out, early to mid-90s the average age of the high-end buyer was well over 60. Now fast forward to today, if the average age of the buyer is 50, that means there are as many 40-year olds as there are 60-year olds buying my houses.
That’s fascinating, and then too, they no longer have two houses. They have four or five in different parts of the world, and they’re staying in them less. You can only stay in one place at one time. And not only are they staying there less, they’re using far less of the house. People will call and tell me, “Frank, I love what you built for me, but do you have anything smaller? I’m not using it that much, nor am I using all I paid for.” I can’t tell you how many times I’ve heard that.
When I first started on the oceanfront in the 90’s, 6 out of 10 buyers were from the United States, vs 4 out of 10 being from another country. That number, at least for us has increased. The number from the United States is now close to 7.5/10.
Okay, so now that you’ve provided the psychological profile of a lot of today’s ultra-wealthy buyers, can you tell us about what distinguishes the Micro Mansion and how it’s ideally designed with that buyer profile in mind?
Frank McKinney: You have people paying $3,000 per square foot and up for high-end condos in Miami, even a few spec homes in Dade County are fetching the same price. The condo story tells me something. The difference between the condo and single-family homes at the high-end is the superior level of finishes, and in the case of the condos, the amenities. My micro-mansion is 4,087 square feet, and when you drop from say a 10,000 square foot home to 4,000, builders often cut corners on quality and budget to get their projects done quicker. The class of buyer for that size home is conditioned to accept that, whereas my class of buyer wouldn’t step foot in a house like that.
Listen, I’ve built bedrooms bigger than my Micro Mansion. The big risk for us is I’m putting in the ultra high-end finishes, like extremely rare illuminated sea-glass kitchen counter tops. The dining room table is crafted from a single piece of driftwood. I’m putting in a living reef aquarium wall. I’m putting in a glass shower on the second floor with trees actually growing in from the outside. A sun deck floating between two smaller pools. The engineering that had to take place to make all this happen is beyond comprehension.
So the primary difference is yes, size, but it’d be like building a yacht. Every square inch in a yacht is planned. Or like building a watch versus building a clock. A watch is so much more intricate. Every square inch of my Micro Mansion has my thumbprint on it, whereas with the mega mansions, it was every square foot. I would be remiss if I didn’t thank Dale Construction for building such a masterpiece.
Have you received much buying interest so far?
Frank McKinney: The first micro mansion is kind of like the first Tesla automobile to roll off the assembly line or the first iPhone to come off the production line. It is a prototype. I have not built one of these before. I’m believing in the quality and square inch attention to detail. Part of a prototype is about feedback. We’re asking 3.9 Million dollars. I’ve turned down a mid-3 Million dollar offer, primarily for two reasons. One, like Van Gogh, Renoit or Monet, I like to paint my painting as I perceive it to be created. Finish the artwork and not have somebody over my shoulder telling me what paintbrush or paint color to use. The second reason is I want feedback. I want feedback from the brokerage community, from the buying community, those who choose not to buy it. We’re already under contract for a very nice oceanfront parcel for Micro Mansion 2, and I want to be able to implement what I learned on 1 so that 2 is more evolved than 1; and 3 at a different level than 2; and so forth.
Regarding the Caring House Project that you founded, which consists of building self-sufficient villages in Haiti, is there something that inspired you to undertake that initiative?
Frank McKinney: We all have a spiritual highest calling, as well as a professional highest calling. We can become very unfulfilled if our only pursuit is professional in nature. Happiness is fleeting, but joy lasts. We can land on joy and stay there when we find and tap into our spiritual highest calling.
My spiritual highest calling was relatively easy to tap into, although it didn’t happen until I was in my mid-thirties. I provide houses to the world’s most wealthy. Shouldn’t I also be providing housing and the opportunity for a self-sustaining existence to the world’s most desperately poor and homeless who don’t have it and who do need it but can’t afford it?
We started our Caring House Project in 1998 by buying homes in the bad part of town, and instead of selling them, I was renting them to elderly homeless people for $1 a month. When I realized there’s a social service net for catching many of the indigent in the U.S., we started over in Haiti. In the last 13 years, we have developed 23 self-sufficient villages in Haiti. This is all non-profit. We’re building the villages and donating them to 4-500 people per village.
There’s a passage in the bible, Luke 12:48, that goes; “To whom much is entrusted, much is expected.” I was entrusted with much more than I ever could’ve imagined. These blessings were meant to be shared with those less fortunate.
Ultimately, we use the proceeds from the bigger houses, as well as many donors to www.chpf.org, to provide a lot of little ones in Haiti. Once we tap into our spiritual highest calling, it helps us stay connected to our professional highest calling and after all of these years, I still love what I do for a living. Had I not found my spiritual highest calling, I don’t know if that would be the case. One doesn’t happen without the other. I don’t start an oceanfront project without thinking after we sell this, how many more villages can we build in Haiti. They go hand in hand.