Part 3: Land Rush
The next two years listing and selling land in Cherokee County were fun and profitable. I managed to close over half the properties I listed. Naturally the more success I had, the more confident (aka “cocky”) I became. Now when I sat down in someone’s living room, I felt like it was another performance of a long running Broadway play. But I was the anti-Willie Loman, the depressed subject of “Death of a Salesman”. I had found something I liked but it was not making money. Although I sure enjoyed going from tuna fish to Tuna. But the thrill of closing the deal was invigorating and intoxicating. It was a successful seduction, a home run, the winning basket.
I also enjoyed meeting and working with some great people. Felix Cochran who passed away in 1996 was one of the top real estate people in Atlanta in the 1970’s and 80’s. He had started with Crow, Pope and Land in the 1960’s as a land broker. He specialized in property along interstates, particularly pin corners, the four corners of the diamond created by an interchange. It is no secret that these are very valuable real estate. But knowing where they are going to be before they were built is a neat trick. Felix was good at being in the know. He became very successful selling and later acquiring prime parcels of real estate along I-85, I-285 and I-575 when it was being constructed through Cherokee County.
He did this by creating honest relationships in the Department of Transportation (DOT) and by doing lots of research. Later when he had his own company, he set the standard for a research department. This was long before people were using computers or had data base access to County Tax records. He had acquired aerial photographs of the entire metro area. He had these pieced together on a giant wall in his office. On the photos he used tape and stencil letters to track every parcel, sale and target property in his acquisition projects. I learned the value of great research in my real estate work.
I managed to sell Felix about five large parcels in Cherokee County. It was a great experience to deal with both him and his younger brother Mac, a Delta pilot who worked with Felix on the side. Felix had a controversial relationship around town. He was tough and shrewd but he always treated me fairly and made sure I was paid all I was due. He was a great guy to me. As real estate has become more institutional a major shortage of characters and fun exist now in this business.
My first year ended with my having more money than I had ever expected whether I was 22 or 42. In fact I had not thought too much about making a lot of money. My main career goal was more about finding something I really enjoyed rather than accumulating wealth. Then I realized that making money was fun, too.
Not everyone however was convinced of my long-term success. I decided that I could afford to get out of the VW in favor of a new sleek and fast Pontiac Firebird. Having gotten advice that I should not pay cash for a depreciating asset, I marched into the First National Bank in Midtown to get an 80% auto loan on this beautiful new car which cost all of $6500. The loan officer looked at my application, which showed one-year employment with incredible income for someone of my age and station. Soon my cocky grin turned to an angry grimace.
“You have a commission only job young man, there is no guarantee you will make any money next year and then can not afford the $185 month payment.” All I remember is storming out of the bank after raging out a few obscenities at this guy. I paid cash for the car.
Barton/Ludwig had become much more corporate after my first year of working there. I could not adjust to the new bureaucratic practices they put into place. I left. Over the next three years I would be with three different companies. Perhaps this was a sign of instability or perhaps it was like a rotating internship where I learned something different while at each shop.
The first of these stations was Adams-Singleton and Associates. A new firm started by two young successful real estate agents, Larry Singleton and Jim Adams. They had gotten their seed money and huge ego by selling their former boss, P. Harvey Lewis an island off the coast of Savannah that became Skidaway Island. A-S had rented beautiful offices in the downtown Candler Building, a turn of the 20th Century classical masterpiece. The building had brass elevators and one of the last buildings in town to have human elevator operators, “floor please?” Or later, “Good Morning Mr. K.” Their suite of offices was filled with lots of clubby paneling and nice desks, along with gorgeous and friendly secretaries. Unfortunately, the office was so nice and the girls so friendly I never wanted to leave the office: not exactly the key to success for a land agent working Cherokee County. Larry and Jim promised much including lots of expensive advertising. Billboards across town and inside covers of Atlanta Magazine displayed large images of the two partners with the caption, “We are Buying”. I am not sure how that slogan ever helped their agents.
As I mentioned I learned something during my rotation from 1973-1975. Here at A-S, I learned the value and the mechanics of creating a great presentation to sell a property. The merchandising generated by a clever and eye-appealing portfolio on a property could only help to make my work seem more credible and professional. Both Jim and Larry were good guys. Larry especially was a great guy and has a keen eye for a good opportunity and great timing for going into an area. A very loyal Ole Miss graduate, Larry purchased Sea Palms in St. Simons a few years ago and now enjoys a great life in the Golden Isles.
A-S sales associates were hired with multi tasking in mind. For instance Don Carter was a pilot originally hired to fly the company plane. They made him a sales associate also. He was a likable fellow from Gainesville (GA). As an agent he concentrated on his native Hall County. In the mid 1970’s he got into developing residential in Hall County. He did great...for a while. I recall running into him at one of the posh private lunch clubs that peer out over the city skyline from atop an A office building. Don was holding court at the head of a table where a slew of business types were the recipients of his largess. He was smoking a big cigar, well dressed and clearly enjoying the moment.
Not long thereafter interest rates rose north of 20%. Prospective homeowners could not afford the mortgage payments and overextended developers and builders could not afford to make the giant interest payments that confronted them. New projects under development or recently opened subdivisions began to look like ghost towns. I saw Don again several years after running into him at the lunch club. He was working in a gas station on Roswell Road near I-285. He was nice, gracious and honest about his rise and fall. But it was sad to see the juxtaposition of the man once in tailored clothes now wearing overalls.
Another much less likable associate at Adams-Singleton was Richard Jowers, not to be confused with Richard Bowers, a West Point grad and very successful office broker still very much in business in Atlanta. The A-S partners had bragged about the Jowers hire in the sales meetings. Jowers had come over from his job in the zoning department of Fulton County. It was assumed because of his connections to the department and the Fulton Board of Commissioners that proposed A-S developments would zoom through the County zoning process without a hitch.
My one and only one on one with Mr. Jowers happened when he asked me to lunch one day. We dined at Herrens, once an Atlanta institution. I recall being very uncomfortable from the start of the lunch session. Long, heavy lunches drained my energy besides delaying me from my rounds in Cherokee County where I still made my living. I sat across from him while he devoured one after another of the famous cinnamon rolls for which Herrens was famous. My mind wondered away from whatever he was pontificating to focusing on his belly expanding over his belt. Big lunches and afternoon martinis had become his idea of moving beyond the zoning department into the lap of capitalism.
When I did focus on his words, he was extolling his can’t miss future because of all the contacts he had established with the titans of Atlanta real estate during his service in the public sector. Unfortunately now that he could not do any more for them in zoning, they no longer needed him either. He did not come close to consummating any business in the eight months I was with the firm. Nor have I ever heard his name again.
I managed to close three or four nice deals while I was at A-S. But the offices were much too comfortable, secretaries much too pretty and the drive to Canton from the Candler Building much too far for me to keep my attention on maintaining high intensity to continue to obtain exclusive listings and closed sales. My first year in business had been great but I felt I needed to do even better in the second year lest I would lose momentum. Careers last a long time.
Another associate at A-S, John McDonald was to become one of the top industrial developers in Atlanta. John began speaking to me about a change he was making to Bick Realty Company. Bick would be located in a brand new office park on I-285 north at Powers Ferry Road and the Chattahoochee River. This was a perfect location from my residence and very accessible to Cherokee.
I had known Les Bick for several years. In fact I had interviewed with him when I first considered a real estate job. Les was a spectacled, scholarly type who as I recall had been an engineer before becoming a real estate land syndicator in the 1960’s. He wanted to expand his packaging of land deals to numerous small investors by becoming a residential developer and builder. At his new location he had hired a land acquisition specialist, a homebuilder and a finance person.
He was filling the balance of his new well-appointed offices with experienced land salesmen. The idea was for the company’s cut of our commissions to fund the overhead, and supply Les with a source of cash flow as an additional profit center.
I was at Bick Realty for about one year. It was to be some of the most fun I have had in business. I had a great time, made good money and the chemistry was effusive between the associates in the office. It was also to be the end of the land bonanza in the Atlanta real estate market.
The building at 6666 Powers Ferry was one of seven or eight mid rise office buildings in a new, very attractive office park overlooking the Chattahoochee River. The buildings had lots of glass so the spaces could offer tenants many offices with windows. Of course Les and his development group had the biggest offices with most of the windows while we agents were on the windowless side of the space. In the middle was Ginger, the lovely secretary, also the target of every guy in the office and all those who visited.
While I barely knew the aforementioned John McDonald, I did not previously know any of the other people in the office. But it did not take long before we were all wheeling and dealing with each other.
There was Bill Bowles from the Bowles family of North Carolina. He was related to Skipper Bowles, who served as President Clinton’s last chief of staff and is now President of the University of North Carolina. Bill was a short, stocky fellow who spoke with an aristocratic southern accent. He was only around 30 years at the time but his voice had already been cured by bourbon and cigarettes. He had that genteel southern air of an heir. Tennessee Williams could have created him. Bill even had the Mississippi debutante wife, Miss Anne as he called her.
Bill did not quite have the energy to get out of the office to find deals. Instead he had let it be known that through his North Carolina contacts, including other Bowleses and Belks, if he was brought a deal he could find the money for it.
A few offices down from me was a fellow about the same age as I named Lee Krinsky. Lee was a native Atlantan, college dropout whose father and uncle had started the original Moe and Joe’s. Their names of course were Joe and Moe. Lee was “specializing” in Paulding County. Paulding was heating up big time because of rumors that Tom Cousins was selling a huge tract of land consisting of thousands of acres to the City of Atlanta for a second airport.
Lee and I got to be good friends. He had the first SUV I had ever ridden in; it was a first generation Chevy Blazer. We would take it out to Paulding County where he tried to show me many parcels that he was sure was adjacent to the airport land. I cannot remember how many times we got that Blazer stuck in the mud and spent lots of time getting it out. Then he would assure me that the piece we were going to see was his next or first exclusive listing. He had not quite received it in the mail but he was sure the landowner had signed and sent it. Krinsky was his name but I called him Trotsky after Lenin’s early cohort in the Soviet Revolution. Most afternoons around 5:30 or 6, the office would head to the restaurant/bar that was also part of the office park. It was called The Moorings. The building remains a restaurant but today it is Ray’s on the River. Ginger and another clerical gal from the office would be surrounded by 5 or 6 guys making suggestive comments and downing too many drinks.
In fact the land acquisition guy, Ed, might get there around 4 for a few drinks before we got there. Within a few months he was getting there at three. After a while he would go there for lunch and never leave. One day Ginger got a call about two in the afternoon that someone needed to come get him off the floor.
Ed not withstanding or standing at all for that matter was not going to ruin everybody else’s good time. Soon we began recruiting other women who worked in the building to join us for our afternoon cocktail hour. This was the beginning of the famous sexual revolution of the 70’s. Unfortunately for me, I was married at the time. I always went home at a respectable hour. I can’t say it always my own home. But I always went home.
Despite all the partying and the distractions, we did a lot of business. Trotsky finally came up with a real property in Paulding. This was to become known as the famous Mr. McMichael deal. After months of promising me that he had Mr. McMichael’s property listed (and heaven only knows what he told this fellow to get the listing). Trotsky walked into my office with this fellow’s signature on the listing agreement. This was great. I was moving beyond just brokering deals to “buying” them. I was putting them under contract with a minimum of earnest money, say $500. Then I would try to find a buyer to close at higher price than the contract stated. It’s called flipping contracts.
I put this property under contract. I had a buyer. It was Kim King, the former Georgia Tech quarterback who was now following in the footsteps of other local Tech players who had emerged as real estate barons. A huge profit was in my crosshairs.
Unfortunately Krinsky had made only one small mistake. The property that he thought McMichael owned and what he did own were two different properties. They were proximate to each other but one was landlocked and one was beautifully located in the growth pattern of the new airport property. Guess which one I had under contract? Guess which one I had represented to Kim that I had under contract? Trotsky!
OK. This required some late night strategy sessions and several trips to Paulding. I told Krinsky I could not look like a fool to Kim so we just had to go out to get the property under contract that we thought we had under contract. Providence was with us on this one because I was able to secure that property and sell it to King. The profit was nowhere near the amount we could have made on Krinsky’s listing but at least we made something and lived to talk about it.
The King deal was dramatic and comical at the same time but it was no near as fun as some of the deals I did with Bill Bowles. Bill had a friend, an insurance agent, either married to or engaged to an airline flight attendant. In those days they still called “stewardesses.”
Bowles had this great idea for his friend’s girl to act as an intermediary to get a group of stewardesses to form limited partnerships to buy land deals. Land deals that I would find and sell to them. We did several of these limited partnerships. Maybe five girls would put up about $5,000 each that would provide the down payment on smaller tracts of land. The balance of the purchase price would be in the form of a purchase money note or mortgage back to the seller.
The commissions I earned from these deals were not the largest checks I had received since beginning my career but the evening presentations in the company conference room followed by cocktail hours made it worth it.
Unfortunately as 1974 rolled towards midyear, the Arab Oil Cartel decided to drastically cut the supply of the US gas supply by placing an embargo on the sale of petrol to the US. The results were devastating to the US economy. Gas prices went from 25 cents per gallon to the unheard amount of 85 cents if you could get gas at all. There were long lines at the pump. Rationing gas based on the first letter of ones last name on certain days was one of the ways the country dealt with this problem.
But it also changed the way people thought about buying land. Now that gas prices had tripled and may go even higher, people began to think they could not afford to live in neighborhoods that required long commutes to and from their jobs. This thinking caused what had become a very large bubble in the land market to bust wide open. Within a year many of the land deals purchased on installment contracts were in default. The land then went back to the farmers or original owners.
Investors lost confidence and began to think that to continue to make payments on these notes was to throw good money away on a bad deal. Consequently many land agents were suddenly without Buyers and had lost credibility with Sellers. No commissions earned from commission only jobs will cause sudden career changes. I don’t know what happened to Bill Bowles and Miss Anne but the land owned by the girls all went back to their sellers. Lee Krinsky became a plumber. Les Bick headed to Colorado and soon the office was closed.
I decided I needed to learn the dynamics of income producing properties.