Wednesday, December 2, 2009

Crazy Landlord Story No. 1

I used to work with a real estate broker who was a millionaire. That was the 1980’s, the Reagan years, and wasn’t life just great then? I’ve never forgotten it. We used to drink champagne every Friday after cutting another joint venture deal.

If you believe me, just dial 1-800-$uckers--‘cause Ann T. Has a Deal for You.

Cash Cowan was a self-made millionaire. That’s totally different.

After doing his stint in the military, he came to a new state with about zero and (I believe) a commission in a reserve military outfit. He started as a rental agent for student housing, figured out how to make money at it, and ran a tight checkbook until he could put together his first property deal and his own agency.

He also had, I don’t know, a million kids, and each one of them was trained in some useful occupation related to property management. Like, air conditioning repair. His kids struggled against this--but they obeyed.

He managed 80% of all the Section 8 Housing in our HUD district. We really only worked in one county though, so you have to have perspective. And not all of the properties were Section 8. Some of the houses were pretty nice. We ran the spectrum.

Old Habits Never Die
He had a collection of appliances in his garage, pieces he had picked up for non-payment of rent. When people left, abandoning everything, he also took their clothes, their furniture, and their abandoned cars. You can get legal title to abandoned cars. Then you can fix them up and sell them.

He used to have garage sales of other people’s discarded clothing, tools, and kitchen items. This was all perfectly legal, and he had to recoup those rents somehow. It was just work to wash the clothes and hang them up on bent wire hangers, have the sale and sell the cars and still run all the properties. His second wife did that; his first wife and her husband cleaned apartments and painted them for a living.

One time I was going into the hospital. My supervisor was the landlord’s sister. She offered me a television set for my post-hospital recovery. We should just go over to Cash’s house, and pick one out.
So, I stared at a double garage, filled televisions, stereos, lamps and laundry. Finally I chose a very modest black and white, stacked about five up along a wall full of television sets.

“You should give me fifteen dollars for that,” my boss said. His sister whipped around, furious.
“NO! She gets it for free. She Works For You, Cash.”

He shrugged, "Okay," his eyes twinkled. "But it really is worth fifteen."

What does this story mean?
Bootstrapping costs something enormous in human terms. Mr. Cowan gathered capital to form and maintain a successful business. He raised and employed his entire extended family, plus stray employees. This is an enormous amount of effort. Mr. Cowan did not concern himself with the letter of the law or the appearance of gentility.

He used to make me furious. His entire world view challenged my beliefs, but oh did I learn. Decades later, my road very different from his: I still find myself trying to reconcile phenomena he took as a matter of course. He was a most exceptional man, not just because he still has the power to challenge me.

Mr. Cowan taught me what strength of will and intelligence it takes to move out of poverty and into the middle class. He did that. I wouldn't say alone. But nearly. I think this story also represents a missed opportunity to learn how to bargain properly. I might have really loved that set if I got it for two bucks or five, for myself!


Slamdunk said...

Thought provoking post. I think each of us has had Mr. Cowans in our lives. The question is whether we can see beyond the sunset and recognize immediate opportunities.

Capt. Schmoe said...

Crazy like a fox!!

Ann T. said...

Dear Slamdunk,
Yeah, and there was the man who was all about the immediate opportunity looking right at me!

Dear Captain Schmoe,
He certainly was.

I've got a few more stories about Cash Cowan . . .