William “Bill” Shaddock’s childhood on the Gulf Coast shaped many of his ideas about business, his career, and the way he built three companies rooted in the often-turbulent world of Texas real estate.

Discussing his business philosophy and one of its dominant themes—how to go head-to-head with much larger concerns—the 60-year-old partner in Shaddock Development Co. and owner and CEO of Capital Title of Texas and Willow Bend Mortgage Co. returns time and again to his formative years in Orange, a small Texas town on the Sabine River in the southeast corner of the state.

“My dad was a doctor, and the phone would be ringing off the wall at all hours,” Shaddock recalls. “My friends’ dads were engineers, and they carpooled to the office and got back from work at 3:30 in the afternoon.

“My friends’ dads did fine, but somehow a career as an assistant valve engineer for some big oil company didn’t seem to be me to be that interesting. My dad would be delivering babies and saving lives and working for himself, and that struck me as more significant.

“One of the big things that happened that shaped my thinking came when one of my friends was crying at school,” Shaddock goes on. “When I asked what was wrong, she told me her parents were moving to Saudi Arabia and she was going to have to go. I decided right there I didn’t want anyone moving me to Saudi Arabia. They took my friend, so I started not to like big business.”

Bigger businesses, with their greater access to capital and market dominance, can hardly be avoided as competitors, Shaddock realizes. “They’re in the businesses you want to be in. You’re going to run into Mr. Big. But, how do you go into the appliance business against a Best Buy, or into the department-store business against Dillard’s?”

Or, in Shaddock’s case: How do you take on major financial institutions in the mortgage business, or national insurance companies in the title insurance business?

“People think real estate is a money business, but it isn’t,” says Shaddock, referring to his development, title, and mortgage companies, which together employ about 350. “It’s a relationship business. People do business with people, not with Worldwide Title Co.”

Despite turbulence in the capital markets over the last three years, and with real estate in a historic funk, Shaddock’s Capital Title has continued to expand and is now the largest independent title company in Texas. Shaddock Development, where Shaddock has overseen the residential development and land-investment division, has put up some of the highest-quality custom-residential communities in North

And, from 2002 to 2007, Shaddock’s mortgage company was among the 100 fastest-growing private concerns in the Dallas area, and honored as such by Southern Methodist University’s Caruth Institute for Entrepreneurship. It sidestepped the fate of many competitors by avoiding the subprime market, which imploded in 2008, and was tenacious enough to survive the ensuing capital crisis that shuttered three out of every five Texas mortgage lenders.

“We use our relationship skills and try to make people more comfortable with us than larger concerns,” says Shaddock, who can get so animated that he pops up from his desk chair to make a point. “That’s how we compete with Fortune 500 companies that would like nothing more than to put us out of business.”

After a couple of semesters in pre-med math and science classes at Texas Christian University, it became clear that his “good but not excellent” grades made following in his father’s footsteps as a doctor unlikely, Shaddock remembers. Business attracted him as an alternative.

After graduating from TCU with a degree in finance, “I went to SMU and met C. Jackson Grayson, who was then the dean of the business school, and he talked about learning to make deals,” Shaddock says. “That’s what I wanted to do. SMU was one of the few schools in those days that was training people to become real estate or oil and gas entrepreneurs.”

Facing few job prospects when he graduated with an MBA in the middle of the 1973-1975 recession, Shaddock decided to stay in school and get a law degree from Baylor University. After graduation he went to see Mack Strother, a partner in what was then Strother, Davis and Hill, a 15-lawyer firm in Dallas.

“I told him I didn’t have a job for him,” Strother recalls. “He came back with the same pitch two weeks later and I said, ‘Okay, I’ll hire you.’ I figured I’d be seeing him every two weeks if I didn’t.”

After a few years in the practice, Shaddock made some basic work-reward calculations about all the late nights he was putting in, and how big some of his former SMU classmates were getting in real estate development as Dallas heated up in the early 1980s.

“These guys were going places, making a ton of money, while I was thinking, `Here comes another ten years of grinding it out,” Shaddock says.

So, in 1983, he decided to go to work for his brother, Peter Shaddock, a homebuilder who wanted to ramp up the development side of the business. Peter offered Bill twice the salary he was earning at the law office.

“At the time, real estate development was a glamorous business,” Shaddock recalls. “Texas Monthly called it the most glamorous occupation in Texas. People were building wealth. You had people like Roger Staubach, who was a broker, showing you stuff and inviting you over to the house to hang out with the Cowboys. I was like, `Cool. I’ll invite my girlfriend.’”

But what everyone would learn by the end of the decade was that Texas real estate was inflating into a bubble, made possible by loose lending and an upward price spiral that, as Shaddock recalls, “just heated and heated and heated.”

“I was just in it six months when I flipped a piece of property and made half a million dollars,” he says.

The end came painfully, with federal regulators shuttering savings-and-loans and banks and liquidating property for dimes on the dollar.

“You looked up and guess what? Everybody is dead,” Shaddock says. “The banks are all dead. The real estate people are dead. I’d been
through it but I didn’t get killed. I had no skin in the game. So there I was, a clean borrower who had learned the business.

“People were still moving to town, getting jobs, buying houses. What had been a hugely congested field with a lot of high-toned, illustrious people just went away. The bust gave me the opportunity to build my career.”

Shaddock Development, which remains a family partnership, eventually developed communities in Willow Bend, the Villages of Stonelake, Shaddock Creek Estates, and the Stonebriar Country Club area. “It was just the general trend to work up Preston Road, from Legacy Business Park to Stonebriar,” says Shaddock, describing areas in West Plano and Frisco. “There was opportunity and we figured it out.”

Jimmy Jackson, president of Jackson Clayborn Inc., a real estate consulting and appraisal company, says Shaddock made bold moves and developed attractive communities such as Willow Bend, where Shaddock lives today.“It takes a lot of smarts to do what he’s done, and some guts, too,” says Jackson. “These were very large developments. It’s hard to drive around West Plano and not see his footprint somewhere.”

Ted Wilson, a principal with Residential Strategies Inc., agrees. Shaddock Development “has been one of the top developers throughout Plano,” he says. “They have a reputation of doing high-quality developments, and they’ve been able to recruit the best builders in the market to come to their neighborhoods. I would consider [the Shaddocks] to be one of the founding families of the Plano area. Certainly their reputation precedes them in the market.”

shaddock_02 Shaddock has developed subdivisions around Stonebriar Country Club. photography courtesy of ClubCorp

At the same time that Bill Shaddock was sizing up and succeeding with development deals, he began doing title work as a fee attorney, as a sideline business. He answered his own phone and waited a year to hire his first part-time employee. When she asked to go full-time, he reluctantly said no. “Hiring my first employee felt like the biggest decision I’d ever made in my life,” Shaddock says. “You’re happy you only have to go through that once. Anyway, it started working a little bit and we were making money.”

Shaddock’s mortgage company, which eventually would encounter higher seas than he ever imagined, started in a similar fashion.

“I never have wanted to go out and buy something,” he says during an interview at the title-company headquarters. “I want to start it myself and figure it out. No loans. No capital. No venture money.” He wasn’t thinking big when he opened a mortgage brokerage serving the North Dallas/West Plano area, “just to do it,” in 1993.

In the early 2000s the company transitioned from a mortgage-brokerage platform, arranging loans from other providers, to a mortgage-banking platform, where it originates the loans and eventually sells them to secondary lenders such as Fannie Mae.

Operating against a backdrop of falling interest rates, which fuel refinancings, and a Texas residential real estate market characterized by steady growth, Shaddock compared the business through many of those years to “being in the roofing business after a hailstorm.”

Then came the capital-crisis tornado of 2008.

Willow Bend, which had grown to nine offices in Texas’ largest cities, had been using a line of credit from its so-called warehouse lender. That is the bank—in Willow Bend’s case, Alabama-based Regions Financial Corp.—that extends credit for loans that typically last from the time of origination to when the loans are sold either to a secondary lender or to Wall Street, where they’re packaged into securities.

Regions, like many other banks, abruptly exited the business, informing Shaddock that it would fund his loans only for another week and half, and that his entire line of credit needed to be cleared in 30 days.

In place of his $40 million line with Regions, Shaddock says, Willow Bend cobbled together smaller lines from a variety of local lenders totaling “$8, $10, $15 million. We were having to turn the money with the velocity of Lucy at the chocolate factory,” he says. “We were
working until three in the morning to turn our loans and keep the business going.”

Even today, “it’s not back to normal,” Shaddock says. “We’re still experiencing a credit crisis in real estate.”

Craig Schrank, Willow Bend’s executive vice president, says the credit crunch hit all of Shaddocks’ businesses to some degree. “It was all coming down at one time,” Schrank says. Shaddock “had to roll his sleeves up and he took a financial hit to sustain the mortgage company’s operations and reorganize it. The fact that he’s still here says a lot.”

The mere act of staying open in an industry where so many competitors have vanished indeed has been the upside, Schrank says. Willow Bend Mortgage continues to operate nine offices in Texas—from Dallas to McAllen—plus one in Arkansas. “We’ve been able to acquire some good people from all the fallout,” Schrank says. “We’ve had a decent year to 18 months of growth because of it.”

People and relationships, Shaddock believes, are the keys to business success. He says his title company may be his best example, given that fees for title insurance are set by the state, so competition hinges not on pricing but on service, contacts, associations, and salesmanship. As Shaddock sees it, people skills allow him to stand up to much larger national companies that compete with advertising and, sometimes, crushing force.

Capital Title, which currently operates 45 offices, is a title insurance agency that sells policies from a variety of national underwriters, some of which also compete at the agency level. One of Shaddock’s underwriters recently told him that it would cease underwriting title policies over $25 million, he says.

“They’re thinking, `We don’t underwrite their big policies; they’re out of that business,’” Shaddock says. “That’s the way it’s always been.

“When I was growing up in Orange, there was a dairy there,” he remembers. “The larger dairy in Beaumont put them out of business. People ran jewelry stores and things like that until Wal-Mart came to town, put them out of business, and hired them to run their jewelry counter at $5 an hour. When you’re a less-than-well-financed independent, you have issues with bigger, better-financed companies and, if you don’t fight back, they will kick your behind.”

His counter-punch was to move forcefully into one of his competitor’s markets, Austin, and hire some of its top talent, Shaddock says. He ended up with enough of the rival’s people for five offices, and valuable business relationships came with them. How did he do it?

“I tell them about our company’s values and ideals, and I ask certain questions, like, `Do you know the CEO of your company?’ Typically they don’t know him. I ask them if they called him, would he take your call? Would he care if you were ill?”

“Then I ask what Worldwide Title Co. is doing to help them build their business,” Shaddock goes on. ”I then tell them how I’m going to help them build business. I tell them, `I’m going to be your biggest supporter, and I’ll give you the freedom to accomplish your goals.’ I give them my cell number. You get the opportunity to be a significant person in this organization.”

It’s been called servant leadership, Shaddock says, and it comes by valuing people and leading by example. “We’re a business family as well as a family business,” he says. With Kim, his wife of 29 years, he has three children, two who now work in the business as well.

On a recent Friday afternoon, in fact, as the clock ticked toward 6 p.m., everyone still working at the Capital Title headquarters offices was named Shaddock: Bill and sons William and Andrew.

“When you’re gone playing golf, people know it,” Shaddock says. “When I’m working on Friday afternoon maybe the rest of our people don’t feel so bad about working Friday afternoon either.”

Of course, he learned everything he needed to learn about the work ethic in Orange, where it was a big deal to be an outdoorsman who caught a lot of fish.

“One guy I knew, Mark White, had a reputation of being a very expert fisherman, so I went fishing with him to find out what his technique was,” Shaddock says. “It turned out that while we were taking a break or eating lunch, he was fishing with one hand and eating his sandwich with the other. He was throwing twice as much bait as we were.

“So, persistence counts. You have to throw the bait out there.”