Gold Star Mortgage seeks new headquarters as it looks to add 100 new jobs in Ann Arbor
Gold Star Mortgage founder and CEO Dan Milstein’s current problem is serious, but it’s one many other executives would love to have. Gold Star has grown so quickly that it no longer fits into its offices on Packard Street, and has even outgrown a second office in the Avis Farms office park in Pittsfield Township.
“This summer we signed a two-year lease there, and we have already added about 85 jobs. We’re looking to add 100 additional jobs in Ann Arbor in the next 15 months or so. We’re looking at spaces right now to combine both offices and add even more seats.”
While Milstein said he has looked at numerous rental and purchase opportunities around the Ann Arbor area, he is most intrigued by the old Border’s headquarters on Pheonix Drive in Ann Arbor. The building is currently being managed by McKinley, Inc., which was appointed property and asset manager of the property after the previous owner defaulted on a loan for the property. It is now being listed by Jim Chaconas for Colliers International for $6.9 million.
Milstein toured the facilities recently and said that there was about an 80 percent chance that his company would move into the space.
“I know that at this point in time we are in desperate need of space,” he said.
“I don’t want to add a third campus in this area, it doesn’t make sense. I’d like to unite my centers into one campus. We have over 200 employees in Ann Arbor right now.”
According to the company's website Gold Star's revenues have increased by more than 750 percent since 2005 and they are closing over $1 billion in loans every year. According to data from the Mortgage Bankers Association, both commercial and residential loans dropped sharply across the country in 2007 and 2008 but have been recovering slowly thanks to historically low benchmark interest rates set by the Federal Reserve.
Major factors in the downturn included the economic recession and the bursting of the sub-prime mortgage lending bubble that brought down major investment banks that gambled heavily on what turned out to be "toxic" mortgages that were never paid off.
In 2011, $1,262 billion was loaned to families across America, and due to low interest rates, 68 percent of those loans were refinancing older loans. The MBA forecasts that as the economy continues to recover, interest rates will rise causing a dip in refinancing but a return to new lending as families are able to afford to buy houses. The forecast calls for $1,466 billion in loans to be made in 2012, and $1,043 in 2013. However, it calls for home purchase loans to be flat between 2011 and 2012, but grow by over 50 percent to $631 billion in 2013.
In the past, Milstein has attributed his company’s success both during and after the mortgage crisis to a decision not to deal in sub-prime mortgages and a focus on making sound and realistic loans. Because they were able to grow during the downturn, Gold Star benefited from the closing of other mortgage companies both in acquiring new clients and snapping up brokers and executives from failing firms.
The company’s rapid and continued growth has led to expansion and the hiring patters involve a combination of sales jobs that are spread across the country in both new and established markets and operations jobs that are mostly in Ann Arbor. Gold Star has also opened an operations center in Dallas recruit former MetLife employees, especially those with underwriting expertise and experience. Milstein said at one point there were discussions at Gold Star about moving out of state and setting up further operations centers in other markets.
“But now that there is not a Michigan business tax anymore, Michigan has become a more appealing area for us to stay,” he said.
As of September 27, Gold Star employed 525 people at 45 branches in 23 states. However, those numbers might be inaccurate today as the company is growing at a rate of approximately 30 new employees per month.
He said he’d like to be hiring people at an even faster rate right now, but the competition for top talent in the industry is extremely fierce.
“The very few companies that are left in the business, we’re all fighting for the same people right now,” he said.
“We have little to no turnover, but we constantly need to hire because our business has been growing every year by at least twofold.”
One source of new talent for Gold Star has been college graduates. The company has hired 70 recent grads this year and put them into a training program that can last anywhere from three months to two years depending on what the employees job will be upon completion of the program.
“We train them here in Ann Arbor, and then transfer them to wherever an opening is that needs to be filled,” Milstein said.
“We found that training within in many cases is better than hiring someone with experience. Not for all jobs, but when you bring people in you still have to spend a lot of time training them in our systems. We found that college grads nowadays are willing to learn and work hard.”
Milstein does not get to broker many deals himself these days. He said most of his time is spent with employee retention, long term strategy, and “dealing with regulators.” He is also writing “book two” and “book three” as he calls them, which will be released late this year and early in 2013. His first book, The ABC of Sales, sold 10,000 copies in March and was the No. 1 sales book on Amazon.com earlier in the year.
Being an executive and removed from the direct sales where he started his career has been bittersweet for Milstein.
“I love what I do,” he said. “Even if I don’t have quite as much fun as I used to.”