Ad
A 2019 Wharton School of Business study determined that most successful business founders in the United States are older than expected. When looking at the national averages, they concluded that age created social ties that could allow a business to succeed. Occasionally, however, some have an entrepreneurial mindset at a young age.
Michael Kmetz, a co-founder of DH Capital, got his start at 12, selling Nerf darts on eBay. Now in the business of developing eight-figure properties, he's living proof that these early experiences pay off.
Twelve-year-old Michael's ambition outran whatever fear he may have had of failing. "My parents always encouraged us to learn as much as possible when starting a business," says Kmetz. "So, my brothers and I started our first business in middle school. My goal was to maximize my earnings and save aggressively from a young age. Little did I know, I'd end up learning a lot about basic finances, customer service, and marketing from that very first venture."
Having shaken off most of that fear in middle school, his transition from working and quitting his corporate job to acquiring and divesting oil-rich land and owning a commercial real estate company came naturally.
In 2018, Kmetz became involved with the Texas Business Hall of Fame, having been previously awarded their Future Business Legend Award at 21 years old two years prior.
Michael went through the usual route of finishing college and landing a job, but his entrepreneurial spirit never rested. Along with his post-college roommate Jake Swaney, Michael constantly daydreamed about starting his own business and escaping the 9-5 grind.
This eventually led to Michael and Jake partnering to buy and sell oil-rich land in west Texas, where he worked. "Using our savings from our first jobs out of college, my business partner and I were able to buy distressed assets that were often overlooked, and we ended up surviving the oil crash," he says. "We held things together long enough to divest our company holdings for an eight-figure package, and we instinctively knew we weren't done yet."
Michael and Jake continued their partnership, this time with commercial real estate, through DH Capital.
"We were looking for something less volatile than oil and gas, and we ended up in the commercial real estate," shares Kmetz. "After a year, I was, sitting atop another multi-million-dollar company for the second time in three years."
At DH Capital, Michael and Jake engage in eight-figure development projects. Each project starts the same way: they find properties that need value-added work done, complete that work, and then sell the properties for great returns.
In under a year, they hit numbers far exceeding the minimum criteria set by private equity investors. "From my research, I learned that all interested private equity investors have two questions in mind: Can you close a real estate project, generate 15-18% annual yields, return investor's capital, and can you do it quickly?"
DH Capital's deals aim to provide strong returns with a minimum 15% internal rate of return (IRR) and a 2-3X equity multiple as project benchmarks. Michael Kmetz has helped ensure that the company ticks off all the boxes required to attract private equity.
There are trends, however, that have followed Kmetz through all his business endeavors. "The biggest skill, I would say, is being open-minded and having courage. Anything is possible, but the problem with many young, aspiring entrepreneurs is that they can't seriously commit to one business idea for a time unless they can see a 30-year vision," he says.
Kmetz has met many people who can't overcome that initial inertia. For his part, however, it's always been about having a three- or five-year vision and the courage to leverage that into something new, if needed.
"Oftentimes, with startups, the worst thing you can do is psych yourself out, waiting for the perfect time because you're too afraid to fail," he says. "Sometimes, you just have to put your head down and work for a year, and you'll likely learn so much just from attempting something that it will be well worth it."
Ever looking forward, Kmetz says he is excited about the myriad speaking engagements lined up for him and his colleagues in 2023.
He believes great things are in store for DH Capital as they scale their brand and widen their client base. He vows to continue carrying the lessons he learned from entering the business world as a wide-eyed 12-year-old, uncertain of what was to come but brave enough to leap, anyway.