Crazy deal swept away mountains while filling a chasm – Press Telegram
When you shop as much as I do, you see bullshit. Today I thought it would be fun to share one of these offers with you.
First of all, there is a little background.
There used to be a savings and loan association or lending institution commonly known as S&L. These savings and loan associations were a major source of mortgage lending prior to the 1990s. However, in the early 1980s , interest rates shot up to double digits causing problems as they weren’t ready to respond to the surge.
Many S&L have gone bankrupt. As a solution, deregulation has allowed these institutions to invest in high-risk real estate assets to improve returns. Good in theory, but bad in practice.
Groups such as Far West Savings, American Savings & Loan and Cal-Fed have become a source of funding for investors and commercial real estate developers. Of course, many great projects have taken place, but there have also been many shipwrecks. We were in the process of marketing such a wreck.
A Tennessee group acquired a portfolio of questionable assets in California from American Savings & Loan. Most were mortgage houses, but one was a multi-tenant industrial park. Understand: Most wholesale purchases included dozens of buildings in many cities. This is similar to the “Forrest Gump” line. “I don’t know what to buy, like a box of chocolates.”
Limited due diligence took place prior to closing. How can you do that? The seller (S&L) needed cash, had a large number of loans on the books, and speed of transactions was paramount. As a result, people who bought discounted prices to offset the risk pinched their noses and jumped into the abyss.
At the same time, in mid-1986, we became aware of the problem. New to my career, I went door to door looking for someone who needed to move.
In one particular project in Orange County North, the vacancies were rampant, weeds were higher than Fesk, and there were two scrapped cars in front of one of the units. Danger, Will Rogers! Our instinct was right: the case was ongoing. I needed to identify the owner of the project.
You can now access title owner information on your mobile device. In 1986, I called First American, Ticor or Chicago or I looked for a microfiche bank. This amounts to checking the architectural plan of the city. Yes, the city hasn’t progressed much since the mid-1980s, but I digress.
As mentioned earlier, we contacted buyers from Tennessee. Good news! A gentleman has been placed in SoCal to handle the sale of all the houses and the like. Great guys and we touched him.
With the newly signed agency agreement, we started to market a building for sale. Selling lists in the ’80s included making brochures (no desktop publishing), setting up a disconnect facade (not allowed to fool the few remaining residents), making contact with neighbors ( easy), which was whether the investor had bought. Similar offers (reviews of paper spreadsheets) and discussions with other brokers.
As a reminder, there were not multiple listing services at the time, so the properties available were paginated and mailed to the brokerage firm. Snail email, oh horror!
Buyers were quickly identified through brokers, terms of purchase were negotiated, and a boom and escrow was underway.
By the way, this was in October 1986. A major change in tax law took place on January 1, 1987. The date could not be later than December 31.
it’s simple. 3 months ago. Things are going as usual, …
The buyer called me in mid-December. I was planning to close the store in a week, so I wanted to discuss the details. Fault! I will never forget his words. “Allen, I am involved in the project. There is a huge chasm in front of the rear structure, which is getting bigger and bigger!
At first I thought it was a joke. There is no such chance. Twenty minutes later, I attended the scene from the movie “Great Earthquake”. You could have buried Volkswagen in the hole!
We discovered for two days that the leak was the cause and that the city was responsible and had to fix the flood. Eh. But wait, it was December 22. There is also what is called the holiday season. Getting someone to react quickly at this time of year is like moving an elephant with a pallet truck.
The rest of 1986 is slowly moving away and we are intimately dependent on urban workers. We relied on unconventional tactics. Several In-N-Out lunches for the crew, Miller Light’s case (who was working overtime) and many prayers ended successfully on December 30.
Our client was very excited about our performance and attended my 30th birthday party 11 days later. Yeah, that’s another story.
Allen C. Buchanan of SIOR is a director of Orange Lee & Associates Commercial Real Estate Services. He can join to [email protected] Or 714.564.7104.
Crazy deal swept away mountains while filling a chasm – Press Telegram Source link Crazy deal swept away mountains while filling a chasm – Press Telegram