A Q&A with Ed Schmelz
The attire of Ed Schmelz, a man who owns millions of dollars’ worth of Franklin and Warren County properties: a hoodie and jeans.
The ELS Properties owner and developer was dressed for a day of work at his newest site, Shoe Factory Lofts in Washington, where he typically works from 6 a.m. until 4 p.m. He leaned casually against a 5-foot-tall cardboard box, which stored a stove, as he paused his preparations for the April 1 opening.
After starting ELS Properties at age 24, this is not nearly his first property venture, but he said it is one of his favorites.
Now 40, Schmelz took a moment to tell The Missourian about his journey from a Union kid to a businessman.
This interview has been edited for length and clarity.
What was your first property?
My first property is actually one my dad sold me, and he gave me a pretty good deal on it. That was a four-family in Union, and then I took that and leveraged it and bought two other properties.
How many properties do you have now, about two decades later?
It will be over 1,000 rental units that we own and manage.
Really, 90 percent of those have happened in the last 10 years because I’ve actually sold almost everything I owned that I bought prior to 2011 and recycled a little bit, got rid of the old and invested in the new.
You own Shoe Factory Lofts, and in January, you proposed a 55-acre, $22 million senior living development in Pacific that wasn’t approved. Can you run through the properties you’re in charge of?
We’re mainly in multifamily units. It’s probably half and half where it’s an all-ages subdivision, like this one and 100 West in Washington on Bluff Road. The other half is senior complexes. We have a lot of complexes that are 55 and up. We have those in Union; Linn, Missouri, actually; and we’re looking at adding one here in Washington on Country Club Road.
When would that happen?
We just got it under contract, so there’s a long way to go. Hopefully, we’d start in six, eight months, and it would probably take two years after that.
Multifamily homes and senior living facilities are completely different markets. What made you decide to go down those two tracks?
I don’t know, honestly. I’ve always liked the rental property aspect of it. My grandpa sold and developed rental properties. My dad did a little bit. They were kind of more commercial oriented, and I didn’t like the commercial aspect of it. So I leaned more toward residential and started buying smaller things and just kind of graduated more to the bigger projects.
I think these two towns together — Washington and Union — are growing exponentially, and I feel like they’ve got a really glaring need for some multifamily development that hasn’t happened here in 40 years, probably.
How did the Shoe Factory project come about?
I looked and found out who the owners were, and it was the Eckelkamp family here that owns the Bank of Washington, and so I called them, and then they called back, and we worked out a deal.
It just looked like something that was a huge eyesore. It had 6-foot fences with barbed wire around the whole thing and just windows broken out everywhere — and I thought, man, that looks like it could be really neat.
How did you decide on the building design we’re seeing now?
We tried to keep and save as much as we could that was in here. With all the windows, we didn’t want to board anything up or make it look different from the outside. So we tried to save as much as we possibly could, but we had to sandblast every square inch of this brick in the whole building. It was all painted. Green.
What bank do you primarily work with?
Well, a handful of them. I do a lot of work with United Bank of Union, First State Community Bank, Citizens Bank, Sullivan Bank, Heritage Community Bank. Those are the primary ones around here.
What lessons have you learned from your experience in the business?
Trying to cut corners, not necessarily always getting things right, it always just comes back to bite you. When you’re rehabbing something, just do it right the first time, and it’ll pay off in the long run.
What properties has that happened with?
I used to own a lot of mobile home parks. I had 10 mobile home parks at one time, and that was until about 2011. Then I walked into one home one day, and it was just wiped out, and it was like a switch flipped. It was like, nope, I’m done with this stuff. I’m going to build new stuff, get nicer properties, get better quality tenants. And it’s worked great since then. So I’ve sold all but three of those.
The Shoe Factory will be my baby. I’ve got probably four or five big projects going on, and over the last 10 years, I’ve never spent so much time on one property as I have on this one.