Autobiography - The Galindo Group

Ram Galindo THE MAKING OF AN AMERICAN Page 125
The only way we were able to generate such an attractive rate of return so quickly was
by being very lucky. But we also zeroed in with surgical accuracy on what was the
highest and best use for the land and concentrated on executing the game plan as
efficiently as we could. We counted on providing off-campus housing for students in a
non-apartment setting, such as fourplexes and duplexes, and on developing the main
street frontage for commercial uses. We called our subdivision University Park. The
cornerstone of our commercial plan was two twin medium-rise towers. One was a full
service hotel, which at the time was direly needed in the area, and the other an office
building.
Events proved that the demand for all these facilities was there. In fact, we sold the
hotel and office-building tracts based on our feasibility studies, even before we had
completed final plans to start constructing them. Galindo Wood Inc.’s buyer was a pair
of end-of-stream developers who had previously bought some lots from us in the same
subdivision. Mack Randolph and Burl McAllister were commercial developers from
Abilene, Texas. We had established a relationship that allowed them to see that I did
business guided by two hallmarks. They synthesize my business life. One is to always
do what I say I am going to do. The other is to leave enough profit on the table for both
parties to be happy. To me this was further proof that mutual respect and dependability
in contractual relationships are mandatory for successful long-term value creation.
Prior to the sale of Braver Corp., on February 24, 1978, I had chartered R. A. Galindo,
Inc. I capitalized it on July 27, 1981. It became my wholly owned new operating
company. Later the Galindo Interests (GIL) limited partnership purchased all the
common stock for 90 % of the ownership and mine became the preferred voting stock
for 10 % of the ownership, with a total paid capital of $140,000. GIL was a limited
partnership between me and three trusts I had created, one for each of my children.
R.A. Galindo Inc. acquired several lots from Galindo Wood, Inc. and I began to establish
single asset limited partnerships to purchase the fourplexes I was building for student
housing. The process moved fairly successfully until the federal government decided to
change the rules of the game.
Keeping in mind that I am describing my personal experience as a study of the effect of
public policies in the lives of individuals, all along this book I make commentaries on the
history of how these policies came about, and how they affected my business life. To
get a sense of the full impact of changes made by government on the macro-economic
business plans of full industries, that is to say on the legal rules of the game, it is
necessary to quickly review some examples. In my case, the industry is real estate and
the changes government made, to correct its prior errors, cost all taxpayers vast
amounts of money but it devastated many innocent citizens.
During the Franklin Roosevelt administration, the government decided to insure up to
$40,000 of deposits in any account at a U.S. bank or savings and loan that subscribed
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