Autobiography - The Galindo Group

Ram Galindo THE MAKING OF AN AMERICAN Page 148
manager and the site-work subcontractor. We broke ground in December 1996 and had
the first units ready for occupancy in December 1997. The entire project was not
finished until August 1998. With 200 living units, it was almost double the size of West
University Gardens. We called this beautiful complex Middle Brook Gardens 1 (MBG1),
to reflect the fact that a stream crosses right through the middle and to honor the owner
from whom we bought the land, F. E. Middlebrook.
Following the July 7, 1998, like-asset tax-free exchange mentioned above, I traded an
apartment complex that over the last five years I had managed to piece together in
College Station called Spring Heights Fourplexes for other properties, including the land
left from the Middlebrook purchase after MBG1. This trade allowed me to fully cancel
the seller’s note and pay my investors a handsome profit for their risk in buying raw land
and, at the same time, provide one of my family partnerships with good, paid-for, prime
land. With the occupancy goals finally met, in mid 1999, just before Russia defaulted on
its debt and sent the bond market to the bottom, I was able to refinance the construction
debt with an excellent mortgage loan. This allowed me to refund a substantial part of the
equity my investors had advanced for the construction of the project. It was the same
formula I had used on the WUG project and I would use again in future projects. MBG1
became the flagship of the new multifamily-housing business unit I was beginning to put
together under the name of “Garden Properties.”
As I mentioned in Healthy Mind in Healthy Body in relation to the like-asset exchange I
had done, the other replacement property in lieu of the Spring Heights Fourplexes was
Aerofit Royal Oaks, Bryan. The tax deferral gained from the exchange left us with the
cash required to pay all the outstanding debt to its seller and refund the equity we had
invested, leaving only a debt to Cid and me for our work in that project. My information
revealed that in the Bryan-College Station community there was still unsatisfied demand
for non-student apartment housing. However, the margins were thin and there were
rumors of other projects in the planning stage. Whatever project we chose had to be
done with great alacrity. Cid and I bought the option for the flood plain land from our
own family partnership that now owned it and lunged into the development of an upperend
apartment community. We designed it as a campus-like layout with Aerofit Royal
Oaks, saving as many of the truly magnificent trees as possible.
On October 5, 1999, I put together another single asset limited partnership with Kay
Dobelman and Hank DeShazer as core investors. Hank brought in his son Mike and I
brought other investors to complete the ownership roster. We secured a bank
construction loan and broke ground October 15, 1999. I had replatted the land and the
partnership bought two lots on which the project was built. The first units were ready for
occupancy in May 2000 and the whole project was completed by September of the
same year. Royal Oaks Gardens (ROG), at 168 dwelling units, was our newest and
largest project in Bryan. We were not as lucky as in the previous projects with the
leasing ramp-up or with the refinancing of the mortgage loan, but the project is still set
to provide a good return for the investors.
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