The year 2007 was the most difficult year of my life and spilled over to became the most difficult year of my bride’s life and the lives of many others. My heart, the very essence of my being was broken. Body and soul teetered on collapse. One in authority commented it was men at my age, in my situation, that many times experienced a physical heart attack or suicide. Kenneth Lay of Enron could testify to this fact if he were alive.
At 54, this was to be my last run for the gold. I was attempting to build a company fast, strong and big enough to take public. I felt like this was my turn. As it turns out, it will be my last run for the gold. God took this incredibly bad experience in business and life to create in me a new person. He established a man in me He would use to perfect His will and purpose in my life and the life of my bride.
“And we know that all things work together for good to them that love God, to them who are the called according to his purpose”. Romans 8:28
The real estate industry was HOT! I had just moved from Arlington and left a great paying engineering sales job. My father had passed away in San Antonio. My mother needed help getting through this period of her life and my son, daughter-in-law and grandchildren lived in San Antonio. It was time to move and enjoy the family. We arrived in San Antonio healthy and ready to take on the world.
I had been studying to get my real estate license when I discovered the ‘ugly house’ industry. It centered around the concept of finding an ugly house, buying it, fixing it up and then reselling it. I discovered there were hundreds of people like myself in San Antonio and thousands in the US that liked real estate investing and were aggressively pursuing the opportunities. I thought investors at the local level could band together and each contribute their individual talents for the success of the group. Then, everyone could benefit from the relationship and meet their individual investment goals.
Having successfully launched a business earlier that I was honored to present to a Wall Street investment banking company, I believed a new company could have what it would take to launch an IPO. The economic timing seemed right. The industry was aggressively growing. There was plenty of inventory in distressed homes. There was international interest in US real estate and the numbers were big enough to attract Wall Street.
This company quickly grew profitable. It was organized to allow individuals to invest in houses and share in the profits. Participation in the deals was based on the premise that everyone had a certain set of talents and resources they could contribute toward the success of the company. They individually shared in the profits. It was a great time. Many houses were bought and sold. Profitability was eagerly consumed by the investors.
A business model was developed for the purchase of ugly houses that provided plenty of room for what was considered worse case scenerios and still create reasonable profit. Investors would find opportunities in ugly houses and bring them to the company for others to invest in. We rapidly grew and word of our organization spread nationally. Then, we discovered Alamo Heights.
Alamo Heights had plenty of small ugly houses that could be purchased at less than $120 /sf and remodeled to include adding 1,000 sf or more. The increased size produced houses that would appraise upwards of $240 / sf. Everyone was excited to see the profits that could be produced. Investors brought many Alamo Heights homes to the company and pushed to have them purchased. Millions of dollars were invested in these homes at the request of the companies’ investors and stock holders. What we didn’t know was that Alamo Heights was considering how to stop what they called, ‘the mansionizing of Alamo Heights’.
We had just bought a group of Alamo Heights ugly houses when the city council stopped work on all remodeling while it figured out what to do with companies buying small, building big and selling these investment homes. The companies’ remodeling efforts were totally shut down. The rules for building permits seemed to change daily. One person at city hall said one thing and the next person said something else. While all this is going on, the company was servicing a debt of over $50,000 / mo.. It doesn’t take a business scholar to appreciate time was limited.
Ultimately, we filed chapter 11 bankruptcy to protect the company and investors. We wanted to buy the time to get houses remodeled, placed on the market and sold. Unfortunately, in chapter 11 we were unable to borrow money to finish the remodeling of permited houses and completed houses did not sell. The real estate market had begun a downward trend that is even more evident today. This precipitated the collapse of a dream, a company and many investor dollars. You can only imagine the displeasure experienced and expressed by the companies’ investors.
As accusations of impropriety fly….
“Not only that—count yourselves blessed every time people put you down or throw you out or speak lies about you to discredit me. What it means is that the truth is too close for comfort and they are uncomfortable. You can be glad when that happens—give a cheer, even!—for though they don’t like it, I do! And all heaven applauds”. Matt 5:11-12
Mysteries of the faith. Has God taken failure as defined by man and produced fruit in your life?