Wednesday, January 23, 2013

Chapter 91 Playing Monopoly

The next project was something that was brand new.  Around 1968, Bob Hudgins and I built the very first Mini Warehouse. We had tenants coming to us wanting to store stuff in any vacant apts. We decided to build a series of single garages-all attached-and bought some land out on Kirby street in Garland to do this. We were having a problem trying to decide on a name. AAA1 Rent and Store, Your Garage, The Attic were some of the suggestions.

One night Charlotte and I were driving back from San Antonio, and we were discussing this. She said how did I decide what to charge since this was the first storage facility ever built with this design. I said that I had gone down to Bekins Storage and they had sectioned off little bins in their warehouse that they leased to people. I doubled their charge and that was the way I set the first rental charges. That was the time girls started wearing mini-skirts. Charlotte said how about Mini Warehouse. Oh, wow, that is it! What a great name. So, the first Mini Warehouse came into existence.

However, Bob and I could not get any financing for our project. The banker’s questions were; What if your idea doesn't work? What are we going to do with all those vacant buildings? I told the banker, “You could own the world's largest car wash”. He did not laugh. We finally borrowed the money on a 60-day signature loan. We finished it in December in the rain, snow, and bad weather. We went all January-no tenants. We began to wonder how we were going to pay off that note. In February we got our first tenant and by the middle of April we were leased up with a waiting list. The next five years we very seldom had a vacancy.

Charlotte and I had acquired a 14-unit Apartment complex on Oram Street.  Bob and I next acquired four twelve-unit apartments on Cole Street and McKinney Street in Dallas. Bob and I opened an office together on Lemon Ave.  Soon after this we took over a defaulted mortgage on a 100-unit apartment on Simpson Street, called the Commodore, with a third partner, Charlie Pittman. Charlie was President of a Savings and Loan, and I was doing the appraising of the Real Estate for them. I saw an opportunity to furnish the insurance for the houses that they were loaning mortgages on. This was fully legal at that time. I took the exam, and got my Property and Casualty insurance salesman license. I would sell the insurance during the day, and that night Charlotte would type up the policies. The Addison General Insurance Agency came into existence.

We had a man working for us at the Commodore named Pete. When we acquired the apartment, the previous owner was six months behind in his payments and had been practicing deferred maintenance for years. Many of the apartments had been robbed of their disposals, sinks and even commodes. The swimming pool was full of furniture and the parking lot had several abandoned cars on it. We took over the mortgage with no cash down, but we had to furnish the money to renovate the entire building. The lender agreed for us to pay the monthly mortgage payment based on occupancy. It was 50 % at first so we owed only 50% of the payment amount. As occupancy increased, the payment did the same.

Pete was amazing. He could start work in the morning in an apt and repair the furniture, put in new carpet and replace the missing plumbing. By quitting time-in one day-he would finish renovating an apartment. He would do an apt a day and soon we had plenty to lease. They were all one bedroom furnished apts. The building was 50% occupied when we took over. We had to evict most of the tenants and, I hired the wife of a Dallas Seminary student for manager and a nurse in training at Baylor for Asst manager. In six months we were about 80% occupied, and it got slowly better after that. The lender, Liberty Mutual Life then tried to cover us up with delinquent properties. We did accept a few, a 150 unit on Cedar Springs and a 120 unit in Richardson. 

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