Autobiography - The Galindo Group

Ram Galindo THE MAKING OF AN AMERICAN Page 124
even today, still receiving royalties from oil and gas exploitation from under our former
lands. We were pleased not only with the results we created for ourselves but also with
the opportunities we created for so many other people who benefited from our risk
taking. Once again, the practice of letting my immediate associates share in the benefits
of my work proved very practical and gave the shareholders an exit strategy.
Ultimately, Galco Engineering bought not only the Albritton tract but also all of Bill
Adkins’ syndications within the MUD. In all cases, Galco transferred the properties to
Braver who subdivided them and retailed the lots. After the sale of Braver, I purchased
another 338 acres contiguous to the former BCMUD1. And together with Lee Lowery
and Boris Zorotovic, we bought 123 acres more. Thus, by 1983 I had completed control
of nearly 1,000 acres of prime development land on the west side of TAMU’s property.
The last two purchases were to be reserves for future growth but prevailing macroeconomic
conditions in the mid 1980s caused me to lose 298 acres of my personal
reserve.
While I was negotiating the sale of Braver, a well-known local architect/developer
named JW Wood visited me with a proposal to develop a project in College Station. It
was located slightly over a mile from the east side of the University’s campus. I
accepted the idea although interest rates at the time were more than 20 % p.a. The
economics were alluring enough to justify the risk and there was a bank willing to
advance the money if I entered in the deal. With my agreement to participate in hand,
the bank extended the commitment letter. Following the sale of Braver Corp., one of the
auxiliary companies I had formed to build houses and assist BCMUD1 in delivering its
utility services ended its useful life cycle. I decided to use this corporate shell as the
home for the new company I was about to start. On April 16, 1981, we changed its
name to Galindo Wood, Inc., paid in a capital of $200,000 and signed a bank note for
$4,088,376. We bought 124.53 acres from a testamentary will with more than 20 heirs.
This was my first exposure to multiple and diverging interests among the sellers. We
found out that the unifying factor was to walk in their meeting with a $2,000,000
cashiers check in hand. We obtained unanimity and were able to close a transaction
that was proving otherwise impossible. In addition, later we bought an adjacent 8.35acre
tract that gave us an important corner frontage. I subscribed 53 % of the stock,
including 2 % that were for my brother Chris. The partnership retained R.A. Galindo,
Inc., as the managing agent for the development.
It was obvious that at lofty interest rates above 20 % p.a. we couldn’t warehouse the
land for very long. Thus our plan was extremely time sensitive. We moved with alacrity.
By mid-1982, we had already realized more than a third of the profits the company was
capable of producing, which allowed us to sell its stock as a capital asset, rather than
the subdivided lots as inventory. Taking advantage of this favorable tax treatment, we
closed the sale of the company on October 30, 1982, for the net sum of $2,104,000 free
of any debt. On March 11, 1985, I received my last payment. In less than four years we
had multiplied our money by a factor of 10.5, not counting interim distributions.
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