David Lake, president of Capital Wealth Advisors Ltd., a West Bend firm, routinely works with clients on asset management, financial, business succession, estate planning and alternative investment analysis.
Lake’s firm has about $65 million under management, and he has fewer than 200 clients. Most of his clients are at least 50 years old and have at least $500,000 in assets that need managing.
Half of Lake’s work week is spent advising clients on asset allocation, wealth management strategies and business succession.
However, the other half is spent on Lake’s other career in real estate development.
“It’s definitely a passion – it’s a priority to my life,” Lake said. “It’s right up there with client management. (I take it) very seriously.”
Lake’s investment in real estate is personal. None of his clients’ assets are tied to it in any way.
Lake’s mother, Pat Lake, who sold real estate in Menomonee Falls and Germantown until about two years ago, helped spark his interest in developing land and buildings.
“With her influence in the early 1990s, I started taking an interest in ways to look at asset classes for myself,” Lake said.
The first piece of property he invested in was a three-acre parcel on Bark Lake, purchased from tax court for $7,500. The property was covered in garbage and debris, but Lake and several family members cleared it and sold it for $35,000 about six months later.
Lake now does most of his real estate investing with a group of friends and colleagues.
Instead of formulating specific plans of what they’d like to develop within a given city or area, the group generally waits until specific opportunities present themselves.
“Through the network of people I work with, they come up to me and say, ‘Did you hear about this? Or what about that?'” he said. “It’s an opportunistic play that I tend to get into.”
Lake and his investors have dealt with a wide variety of real estate transactions over the years. They have been involved in land deals in Salt Lake City, Utah. They’re also now working to develop lake vacation rental properties in Tennessee and are looking at an industrial park in Rochelle, Ill.
The most recent development project Lake and his investors have undertaken is a Hampton Inn & Suites at the southeast corner of South 18th Avenue and West Paradise Drive in West Bend. The hotel is set to open in about two weeks.
“It will be the nicest hotel in West Bend for the business traveler, and it will be complimentary to the expansion of West Bend Mutual Insurance,” Lake said. “And it will be a nice compliment to the city.”
West Bend Mutual Insurance is nearing completion of a $57 million expansion next door to the hotel site. Gehl Co. is working on a $20 million expansion in West Bend as well.
The hotel will serve business travelers for both companies, Lake said.
The three acre site also contains a 24,000-square-foot office building that was completed in January. Waukesha-based R&R Insurance Services Inc. recently moved into about 30 percent of the building, Lake said.
Madison-based Care Wisconsin recently signed a lease for 3,000 square feet inside the building and is scheduled to move in May. The remainder of the building will likely fill up quickly, Lake said.
“Our building, this year, will be the only one in West Bend that has Class A space available,” he said. “Another building is popping up that Commerce State Bank is doing, but that probably will open in early 2009.”
The hotel and office project is a partnership between Lake and his investors, West Bend-based American Design & Build and Iowa-based Kinseth Hospitality Companies. Kinseth Hospitality is a minority partner and will be the hotel’s operator, while American Design & Build will manage the property.
Lake’s business specializes in helping clients maximize their personal investments, and his involvement in real estate is ultimately doing the same thing for his personal finances.
“Eighty percent of the wealth is held in real estate worldwide,” he said. “Why not take the same fervor into our own paths? We all share (real estate) in common, and it’s a tangible asset that has held value forever. Stocks go up and down, and real estate does in certain times, but it’s one of the best standing assets you can hold.”
