CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Ed Baumgartner, left, and his brother John talk with Briget Rischawy and son, Jack. Their real estate firm's focus on military families has proven to be timely.
On the home front
Two brothers in arms find real estate a good way to give back to the military
STORY SUMMARY »
The military has been good to the Baumgartner brothers, and they've been good to the military.
Ed Baumgartner and his brother John, both recently retired army master sergeants, have capitalized on home buying demand from the military sector to build Tropic Lightning Real Estate. The company, which Ed Baumgartner founded in 2005 and named for the Schofield unit that served as his last assignment, caters almost exclusively to military buyers and their families.
It's been a timely focus. While sales in Oahu's overall home market have slowed, the number of transactions by military buyers here is booming.
New laws, a healthy economy and continued low interest rates have armed military buyers with more buying power than they've had in the past two decades. And their base housing allowances are generous enough to give them some real choices in Hawaii residential real estate market.
Since opening, Tropic Lightning Real Estate has expanded to 10 agents and launched a property management division. By next year, the company expects to bring in $15 to $16 million in sales revenue.
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CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Ed Baumgartner, right, and his brother John sell real estate together as Tropic Lightning Real Estate. They now specialize in helping military families find homes, which they see as a way to pay back the military for helping them establish themselves.
At a time when a softening Hawaii real estate has caused some firms to throttle back, Ed Baumgartner's two-year-old real estate brokerage Tropic Lightning Real Estate is thriving.
Given that Baumgartner and his brother John were U.S. Army sergeant majors who went to war and survived multiple overseas deployments before retiring and entering what the Army calls the "real world," it's not entirely surprising that the duo is bucking the odds. By catering to a military niche market, the brothers are doing what they've always done -- taking care of soldiers and their families.
"We have more than 55 years of experience taking care of military soldiers and their families," said Ed Baumgartner, who opened the business on Sept. 5, 2005 after realizing that there was enough demand to support a brokerage that catered almost exclusively to the military market.
"I'd say 99 percent of our business is military," Baumgartner said.
While Oahu's overall residential market has slowed in terms of sales, transactions from military buyers are booming.
New laws, a healthy economy and continued low interest rates have armed military buyers with more buying power than they've had in the past two decades. And their base housing allowances are generous enough to give them some choices in Hawaii residential real estate market.
Demand is so strong in the military market that the Baumgartners have been able to expand the business to include 10 agents. Tropic Lightning Real Estate closed 13 transactions in 2006, 24 transactions so far in 2007 and expects to close out another 30 to 40 in 2008, said Ed Baumgartner.
"We had $10.5 million in revenue last year and we'll close this year with another $15 to $16 million," he said.
Tropic Lightning Real Estate is a successful business based on the simple law of reciprocity. The Army was good to the brothers and now they've found a way to repay the men and women that serve.
"John and I say all the time that if it hadn't been for the Army that we would never have gotten that first pair of shoes and we probably would have married cousins," said Baumgartner, who grew up poor in Chattanooga, Tenn.
The eldest of seven children, Ed Baumgartner dropped out of high school to join the Army. While serving in a variety of commands, Baumgartner earned a college bachelor's degree and a master's of business administration. After 30 years in the Army, Baumgartner retired as a sergeant major from Tropic Lightning, the 25th infantry division at Schofield Barracks. His command later served as the inspiration for the name of his new business.
"If you'd have told me a year before I retired that I was going to do real estate, I never would have believed you," Baumgartner said. "I was going to retire to Georgia or Tennessee and teach."
When Baumgartner began nearing his military retirement, he decided to get his real estate license so that he could avoid paying commission on the sale of his Hawaii property.
"It wasn't my intention to get into real estate," he said. "I was just trying to save money. I saved $42,000 by having my license."
However, between January and his October military retirement, Baumgartner sold seven houses. He joined Century 21 for a time before deciding to venture out on his own. He later recruited his younger brother John to run the office and the company's property management division.
"The military gives the service members a housing allowance that they can use to buy a house, rent or live on base," he said. "I'm kind of like an evangelist. I'll do whatever it takes to get them into a house because most of them are so much better off than they would be if they rented or lived on base."
And, if the clients that come to the Baumgartners won't be better off for buying a house, the brothers won't encourage them to buy one.
"We don't work with subprime loans because we don't want anyone to get in over their head," Baumgartner said.
The brothers also have advised service members with big families who can't afford to buy large homes that they would be better off in military housing. And, they've encouraged those with bad credit to clean up their situations before taking on a mortgage.
The Baumgartners run the firm a little differently than other real estate offices because it's personal for them. Raised poor, the brothers know the importance of owning a home.
"My dad worked construction and it was really tight," Ed Baumgartner said. "I went to 12 schools in 12 years and we lived mostly in sharecroppers' quarters or trailers."
The military gave both brothers a better foundation and a fresh start, said John Baumgartner.
"They say if it doesn't break you it builds you up," he said. "The military built us up."
And, though the brothers are retired from the Army, the influence of their extended military ohana is still affecting positive changes in their lives.
"Our clients become our friends," John Baumgartner said. "We get invited to birthday parties and weddings and most of our business is from referrals."
As a result of their experiences, it's not always about the bottom line for the Baumgartners.
For a small fee, the brothers offer rental finder services for military members. And, they list houses free for any Purple Heart recipient.
"It's the least we can do to give back," said John Baumgartner.
And, for him, that policy is also personal. He is a member of the Order of the Military Purple Heart for an injury he received while during a convoy operation in Iraq in 2003.