The good news for Isquierdo is that he’s got his job back, and a contract extension.The five-member Sunnyside school board*** voted in June to renew his contract by two more years, past his previous June 2014 contract expiration.
However, the Sunnyside Board may be the most dysfunctional school board in the entire country
The bad news, however, is that his bosses, the Sunnyside Board, are having a hard time, as described by the Huffington Post and local Arizona journalists.
A Quentin Tarantino-esque standoff between board members
In July, a citizens group calling itself Sunnyside Recall 2013 launched a campaign to recall and remove from office two of the five members of the board, apparently for supporting Isquierdo’s contract renewal, targeting Board President Louie Gonzales, and board member Bobby Garcia.
Hernandez Jr in particular is featured in the Huffington Post article, following ham-handed flyers in support of his recall, claiming Hernandez’ LGBT status and lack of support for guns make him unfit to serve as a Sunnyside school board member.
The article points out that board President Gonzales’ campaign manager, Marcos Castro, is running the recall effort against Hernandez, confirming that this is a case of Tarantino-esque schoool board fratricide.
Because of both the LGBT and the recall angle, the dysfunction of the Sunnyside Unified School District rhymes interestingly with San Antonio City Council politics lately.It’s also a reminder of the kind of drama Isquierdo could have generated as Superintendent of the San Antonio Independent School District.
Isquierdo bankruptcy
Because I make a habit of searching public financials records, I thought it worth following up on Isquierdo’s financial journey since April as well.It should come as a surprise to nobody that he has not comported himself entirely according to the rules.This is a guy for whom rules do not apply.
Isquierdo declared Chapter 7 bankruptcy in May 2013, presumably in an attempt to stop his house foreclosure, and under considerable uncertainty about his future employment.
In June, the main mortgage holders on his golf community house filed a motion to dismiss the bankruptcy because of inconsistencies in his financial declaration under oath.The mortgage holders essentially accused him of perjury.
In July, the US Department of Justice’s representative in bankruptcy cases, known as the US Trustees Office, filed a motion that supported the mortgage holders, declaring a ‘presumption of abuse’ of the bankruptcy system in Isquierdo’s filing.
In August, the mortgage holders asked the court to sanction and hold Isquierdo in contempt for, among other things, stripping the house of $14,000 in cabinets and countertops, a microwave oven worth $580[3], a dishwasher worth $1200, and removing or destroying a built-in Television, built-in wood shelves, and the security system
This week the US Trustee’s office (again, a representative of the US Department of Justice) agreed that Isquierdo’s bankruptcy should be dismissed because among other things:
1. He makes $327,222 per year, approximately $266,299 more than the median household in the area.You’re supposed to be below the median income to qualify for Chapter 7 bankruptcy, except in extraordinary circumstances.
2. He listed $1,000/month for dependent child care, but lists no dependent children.
3. He listed $8,700/month for mortgage expenses, but hasn’t paid his mortgage since before he declared bankruptcy.Also, he and his wife moved out of the house months ago, so they clearly have no intention of ever paying $8,700/month.
Isquierdo’s bankruptcy will likely be dismissed, which appears from his own filings to be his preference as well.It would not be surprising, based on the filings I reviewed, if he faced penalties or additional damages from the US Trustee’s Office or the Bankruptcy Trustee handling his case.
***As noted in the comments section below: only 3 of the 5 board members voted for the extension. Crouch and Hernandez Jr. voted against the contract extension for Isquierdo. Hence the recall effort against them.
[1] That’s a great name, by the way.I would totally douse myself in wolf urine and take up big game hunting if I could go shooting with a guy named Buck Crouch.
[2] Hernandez Jr initially came to public attention when, during his first week as an intern for Arizona Congresswoman Gabby Giffords, he jumped to her side and held her hand all the way to the hospital, shortly after she was shot by Jared Lee Loughner.
[3] I feel it necessary to point out that one can get a decent microwave for $25 at Walmart these days, but I digress.
I then used the opportunity to ask him about his other business interests.
In particular, I asked him about Zane Garway Consulting Group LLC, which he has in the past represented as an urban planning business with business in San Antonio, Fort Worth, and even Israel.
I also asked about Garza’s history of subcontract work with VIA.
Garza and I agreed that it is important that Garza’s involvement as subcontractor for VIA, for example, be kept in the public eye.
Transparency in financial dealings of public officials is of the utmost importance, as even the appearance of quid pro quo contracting can hurt the public mission of an organization such as SAISD.
A) On Zane Garway Consulting Group LLC
I mentioned – somewhat in passing in my prior post – that two Garza entities Urban One 30 Group LLC and Zane Garway Consulting Group LLC had lost their registration as businesses in Texas due to the resignation of their registered agent, and a subsequent ‘involuntary dissolution’ filed by the Texas Secretary of State.
Garza clarified that he has never done business as Zane Garway Consulting Group LLC, despite using a Zane Garway email, setting up a Zane Garway website, applying for business as Zane Garway LLC[1], and listing clients on the website.
This portion of the interview:
Michael: Thank you for spending all this time and I really appreciate it. I had another question which is beyond what I had written about but I understand you and your real-estate partner do Zane Garway Consulting Group?
Ed: Yeah, we formed that group but we’ve never used that group.
Michael: You haven’t?
Ed: Correct.
Michael: You have a website that has clients and prospective clients.
Ed: We set it all up and we had the — the work that’s on there is work that I had worked on previously with firms I’ve been employed with. I didn’t even know it was still up but it’s good to know.
Michael: Yeah, zanegarway.com.
Ed: I used the email because we set it up at the time and everything started coming in on that email. It’s just a hassle of changing an email, but we’ve never used that entity in any business transactions. When I started doing independent consulting, it was easier on my own to do independent contracts rather than utilizing the entity since it was just me doing the work.
And then after the last house on North, basically the business partnership between Mr. Wayne and I has stopped. We’ve not done business since that time. You were correct on your assessment on we had to reinstate Urban One 30 in order to sell the property. [He’s referring to 139 North Street]
Michael: Buyers’ attorneys always say “show me you’re in good standing with the state.”
Ed: That came out during the closing. The title company called and said you’re going to have to reinstate this in order to close this property. We had no intention of selling it at that time. We figured the litigation would have to get resolved and didn’t know the timing on that, so there was no need to reinstate an unused business, in our opinion, and we decided to let it expire.
Michael: You never got contracts for Zane Garway?
Ed: Correct.
Michael: Or you’ve never done business as Zane Garway Consulting Group?
Ed: Correct.
Michael: But it looks like on the site you have contracts or have done work for Ft. Worth.
Ed: That was all through EDAW, I worked with TCB and then they were bought out by AECOM and then shortly thereafter is when I left. Those were all with companies I was employed with, in my urban-planning role with those companies.
Michael: Although on the report for Ft. Worth Planning Commission, you’re listed as Ed Garza of Zane Garway.
Ed: Yeah, I think initially it was, from what I recall and also I think I did a job in Arlington, I was selected as Zane Garway, but when we actually entered into the contract which I was a sub, it was as an independent consultant. At the time when we applied for those projects it was the partners. After that, when we went our separate ways, it was really the work that I would be doing personally and there was no need to bring an entity involved, that the other partners were not going to be performing any of the services.
Michael: Never did business.
Ed: Correct.
Michael: Some of your information online lists Sam Wayne and another gentleman, Kevin McConnell. Was that the full extent of the partnership?
Ed: Correct, the three of us, and Kevin’s the one that set up the website and was the Trinity student at the time. He was leaving the company before we even started the North project. He was going back to school out of the country so he withdrew from the partnership, even though he’d set up everything in the partnership in terms of the name, the entity, the website. Mr. McConnell did most of that work.
When he left the country it was just Sam Wayne and I, and when I would be pursuing contracts out of San Antonio, again it was “I’m going to be doing the work” so it was inefficient to utilize the company where Mr. Wayne was involved when he wasn’t going to be performing any of the services. By that time, he went off on his own. I think he went into looking at getting his broker’s license. I can’t confirm that. I’ve never had any business transactions with Zane Garway.
B) Contracts with VIA
I also asked Garza about his contracts with San Antonio public transportation company VIA. The board chairman of VIA is Henry Munoz, who’s firm won the $12.5 million contract to manage SAISD’s bond deal.
Michael: One of the contracts that shows up there on the Zane Garway site is a VIA contract and so that’s interesting because people look at business relationships and think “VIA, that’s Henry Muñoz,” and at the very least from a timing perspective, the way that gets looked at is with a jaundiced eye.
Ed: I understand.
Michael: Can you tell me about what you did for VIA?
Ed: Actually going back to EDAW and TCB. I was already working on projects with VIA with the Bus Rapid Transit —
Michael: I don’t know what EDAW or TCB is.
Ed: EDAW was an urban-planning firm based out of San Francisco and TCB was an engineering firm based in Texas. Both firms eventually were bought out by AECOM which is based out of Los Angeles, I believe. During the years that I worked for one of those three companies, because they kept changing ownership, and this is a global company, I worked on a number of projects.
Locally one of the projects I took the lead on for the company was VIA’s Bus Rapid Transit project. That probably began for me in 2006-2007. My role was public engagement, the public meetings we had along Fredericksburg Road, as well, as the site planning for stations for Bus Rapid Transit. I did participate with them, before I’m on the school board, well before I thought about running. I had already developed a relationship with VIA. The second contract I had with VIA was through HNTB who was awarded the contract to be program manager for the streetcar project.
Ed: HNTB is another engineering company, I think they’re national or international. The gentleman that was heading HNTB I knew when he worked with TCB prior to him joining HNTB. He already knew of my work with VIA, so when he got his team he asked if I would become part of that effort, team effort, which I did. And again I introduced it as Zane Garway when we first submitted, but by the time we were selected, Zane Garway was no longer being used. I became an independent contractor to HNTB.
Those have been the two contracts that I have been involved with VIA. One was prior to me being on the school board and the other came up during my first or second year. The Express News wrote about the piece, the same questions you’d asked. When I was really clarifying the fact that my relationship with VIA had started before that, and really it was the work I was doing with the staff, and not at the board level, that proved to be where my value was to the projects. Having grown up in the neighborhood, I was very familiar with Fredericksburg Road, the Deco District revitalization. They saw that as a value to the project.
Michael: Is that what you did for the HNTB, the Deco District revitalization?
Ed: HNTB, my role was specific to site planning for the streetcar, not the BRT, but it dealt with the urban planning, land-use issues, and the public engagement/public involvement. The two that I’ve been involved with to date have been the urban planning and land-use assessment. I haven’t done any work on that project probably for over a year. That had been written about, talked about, and disclosed.
Michael: That’s one of those things that between public officials and prominent public entities, there’s a higher level of scrutiny that people want to see and a higher level of disclosure and higher level of public interest.
Garza was kind enough to respond last week, and I appreciate that he took the time.
He corrected a significant error I made on the price at which he sold one of his properties, although the outcome of a lawsuit with respect to a fire at the property, and his sale, should still remain in the public eye.
My goal with Bankers Anonymous is to make finance and financial transactions more accessible to the public.This matters particularly when it comes to evaluating public officials’ actions in the public and private business sphere.
Garza reached out to me last week shortly after I posted a review of his real estate transactions.
Most importantly, he corrected a sale price I reported for 139 North Street, which burned in the Spring of 2011.Based on a public records search, I reported a sale price of $156,250, an implausibly high sale price for a burned structure.
Garza has since showed me a ‘Settlement Statement’ on the sale to Nuvista LLC, which shows a more reasonable $43,000 purchase price.Since an unusual feature of the 139 North Street situation – in addition to the unusual fire, the unusual buyer, and the unusual loan – was the sale price this is an important correction.
The buyer, Nuvista LLC – newly formed in November 2012 by a recently bankrupt gentleman from Arizona – did obtain a $125,000 loan from private individuals in Allen, TX at the time of the purchase.
Ed Garza also responded to other aspects of my real estate review, and I have included commentary and portions of our interview below.
We covered a range of topics, including
A) The fire at 139 North Street
B) The sale price of 1919 Magnolia
C) The appraisal of 2006 Magnolia
In a subsequent post, I’ve included a portion of the interview in which we discussed his other business dealings, including contracting with VIA.
I noted in my piece that a fire in the empty property seemed unusual, and I was curious what the fire inspection showed.Garza responded that
1. The Fire department’s report was ‘inconclusive,’
2. The bank’s insurance company initiated litigation against the contractors on the issue 1.5 years ago,
3. Garza’s firm joined the litigation alongside the insurance company, and
4. Depositions have not yet begun as of June 2013.
The portion of the interview about the fire is below.[I have edited out a few comments tangential to the discussion of the fire at 139 North Street.]
Michael: I’m interested in the story that was reported in the Express News about 139 North Street, and that there’d been a fire there. Can you tell me what happened? I can only see what I can see from that story, but what happened?
Ed:It was a home that was being restored. Probably 80% into the project, the fire occurred. When it’s 80% of the project, that’s after putting in, and investing into a renovation budget of probably close to $100,000 over a period of at least a year, and trying to bring that house, which had been vacant to a number of years prior to the purchase. It was devastating to have something that you spent not just obviously money to invest, but also the time and effort and sweat equity to bring something back to life, in a neighborhood that I’ve lived in all my life was quite devastating. It was the last house that we renovated either individually or as an entity just because of the financial hit we took because of the fire.
Michael:Who was the contractor?
Ed:The contractor was a local contractor that we used, Fieldgate Remodeling was the name of the firm. We used them in the house prior on some work. They were not a general contractor but they had performed services in some of the renovation on the house prior. I was impressed with their work. I was quite busy at the time and my business partner at the time was also busy.
With this next house that we had in inventory, we wanted to get somebody to do the day-to-day, which we’d never done before. We asked them if they would be the general contractor for the project to oversee the day-to-day work.
Michael:Fieldgate Remodeling was the general contractor?
Ed:Correct.
Michael:What happened? Did they have insurance?
Ed:They have insurance. After the fire, the city did their inspection and it was — I guess the best way to say it was there wasn’t a conclusion, it was kind of undetermined.
Michael:When you say the city, who does the inspection for the city?
Ed:The fire department.
Michael:The fire department did an inspection?
Ed:Correct.
Michael:You described that as an inconclusive report?
Ed:Right. They said the property was secure, there was no forced entry into the property. But that they asked what had been done the night before, and what we were told by the contractor, the night before they were sanding the floors. Again this is getting into the final stages of the renovation. The arson investigator that the bank – or the insurance company for the bank – concluded for their report that they believe the fire was started through the combustion of the wood particles the night before, of the sanding of the floors with chemicals from — on a rag from what was used in the kitchen on the tile work.
The chemical and dust particle started the fire in a bucket near the front, literally in the front window of the house. If you’re standing there from the street, you would be able to see somebody. That’s where the bucket had been left, and that’s where the fire started. It burnt through the floor, went under the floor, through the walls, up to the attic and that’s what collapsed in the house was a big attic.
Michael:Do you know who the fire department person was who did the inspection?
Ed:Not offhand, I’m sure I can find his card.
Michael:Do you remember who the insurance company was?
Ed:That’s the same thing, I can get you that information. Are you talking about the insurance company for them or for the bank?
Michael:For the bank.
Ed:I can get you that information. It was also devastating the day of the fire that I learned my business partner allowed the insurance on the property to lapse. That was a shock. Fortunately, I found out through that week that the bank of course by law has to have the house insured, so they had a forced insurance on the property. But was not one that we carried as the property owners.
Since that time, the insurance company filed suit against Fieldgate. We joined that suit. I forgot the legal term that’s used, but we joined that suit for damages caused by that fire. We haven’t been deposed yet.
Michael:Your business partner let the insurance lapse?
Ed:Correct, for the entity. I’m not going to just blame him, but yeah, the business entity did not renew the fire-insurance policy on the house.
Michael:You were personally uninsured but the bank was insured. Do you remember the insurance company’s name?
Ed:No.
Michael:Did the bank’s insurance pay the bank off for the mortgage?
Ed:Yes.
Michael:When did they pay?
Ed:It was probably a few months after the fire.
Michael:At that time, the bank had insurance; you didn’t.
Ed:Correct.
Michael:Then the bank’s mortgage —
Ed:We weren’t going to collect on anything from the insurance but the bank, because of the forced insurance policy, was covered.
Michael:You’re understanding is the insurance did pay out to the bank?
Ed:Yes, so the note was paid later that year, the note was paid off. We held the property free and clear, but of course it’s a fire-damaged property.[1]
Michael:Sure.
Ed:We were out of the investment made for the renovation. No real way to recoup that, and renovating it was going to be — we did get an estimate to rebuild as-is, in terms of same materials, same quality the house was built. It was a little over $200,000.
Michael:It would have cost you $200,000 to rebuild.
Ed:Right, to rebuild as-is, same materials, same quality lumber, every detail was estimated and it was going to be quite an investment.
Michael:The timeline for the mortgage being satisfied by insurance on North Street is really the end of 2011?
Ed:Correct.
Michael:You’ve not been on the hook for that one since the end of 2011.
Ed:Correct, not on the hook in terms of the mortgage, but still in the litigation of the property.
Michael:Is that ongoing still?
Ed:Correct, we’ve not even been deposed yet. We joined that suit with the insurance company that sued the contractor, based on their investigation.
Michael:Are you claiming damages as well?
Ed:Yes.
Michael:As the entity that owned 139 North Street, trying to get reimbursed.
It’s not terribly relevant to the review of Garza’s real estate transactions, but he wanted me to note that in fact he purchased 1919 Magnolia at a better (ie. lower) price than I had obtained from my public records search.I had reported, based on records available to me, that he acquired the property for $114,220.40, which he 7 months later flipped for $250K.He clarifies that he purchased it for $90,400, and sold it for $234,000.
I expressed surprise in my review of this transaction that the buyer could obtain a 1% down-payment mortgage, at a price significantly above nearby comparables, in the tough real estate and lending environment of 2010.
Garza responded, in essence, that
1. The buyer must have had good credit [I think this is necessary, but not sufficient.]
2. The Austin-based bank appraiser must have seen something in the renovation that allowed him to use higher-end Monte Vista comparables rather than the dozens of Monticello Park comparables to come up with an appraisal.
[I have edited this section to take out non-germane comments]
Michael:That reminds me of this other property we haven’t talked about, the 2006 West Magnolia. What’s interesting about that for me is that this buyer was able to get such an attractive financing package. Did you know this buyer?
Ed:I did meet the buyer. They had a realtor.
Michael:Did you list it with somebody?
Ed:Yeah, the same lady that listed 1919 [Magnolia] listed 2006 [Magnolia] with Keller Williams.
Michael:Josette Gonzales?
Ed:Correct. I think that one took — that was already in the bust of the real-estate market and she was more cautious again because the values had gone down, appraisers were even more unpredictable in terms of how they would look at properties. But she still came back and said we can sell this one for $234,000. Keep in mind every house that we did set a new per-square-foot record in Monticello Park. I only focused in Monticello Park. That’s my neighborhood.
I wasn’t interested in buying properties to flip or just doing any house. Being employed at the time with a big company, I didn’t have the time to be doing this as a flipper would. This was more about bringing value back into the neighborhood that I’ve invested in, my wife’s invested in. It really became a passion.
So 2006, again being parishioners at St. Anne’s and the man was a deacon at the church. He passed away and his siblings, his daughter approached me about purchasing that house. We bought it for $120,000. Every house that I bought from Magnolia, both Magnolias, to the Mistletoe, to Fir, I always tracked the BCAD [Bexar County Appraisal District Online Property Search] and I would never offer anything more than the BCAD. That was just a general rule.
This one was right at the BCAD price when we purchased it, and probably sat on it for at least six to eight months before we started the project.
Michael:Just on the 2006 Magnolia, you got an amazing sale off, and what I thought was interesting and highlighted is the buyer — you said you knew the buyer somewhat?
Ed:No. The buyer was represented by a broker, and the buyer is the owner of Candlelight Coffeehouse. They’re the actual owners, what was represented to us, and they were not going to have a problem with applying for the note.
Michael:The note is extraordinary, a 1% down mortgage.
Ed:Right. It must be because of their credit. I would imagine that’s how they were able to get those terms, especially at that period of time. That house we probably had on the market for a month but for us that was a long time.Magnolia was a bit longer, being in 2010, and the market the way it was, but we were still able to sell it within that first couple of weeks.
Michael:I’ve been doing property for a long time and I find just getting a 20% down payment mortgage takes about two months itself, never mind a 1% down payment mortgage within a month, and never mind at a price that really these are outliers if you compare to other tax-assessed value or Zillow value in your neighborhood. They’re really big.
Ed:Even the appraisers, the one for 2006 Magnolia was an Austin appraiser, and every house was a different appraiser. You never know which way they’re going to lean, but the one from Austin came in and said this is an impressive house, every detail of this house has been renovated from the minute you walk up the sidewalk, to the new lawn, new driveway, every little detail of the house.
He said, “You don’t see these kinds of renovations. Usually we see flips, which mainly are in the interior, they may be more cosmetic. They don’t get to foundation or rewiring, and definitely don’t get to the landscaping.” Even an Austin appraiser didn’t know anything about the neighborhood, and they came with that Austin perspective. He appraised it a bit above what we were under contract for. They were using a lot of comps because many of these appraisers couldn’t find comps in Monticello, but they were using comps from Monte Vista.
Michael:I got a mortgage in 2010 and my bank came in about 15% less than what I was paying. I’m amazed that in 2010 you could get a 1% down mortgage and a bank to come in at really 30% higher than anything else in the neighborhood. It’s impressive.
Ed:We did a house on Fir also, 222 Fir, and that one set a per-square-foot record. That was the first one I did with Mr. Wayne. That was a 2-bedroom/1-bath and I think we had it sold for 211,000. The price per square foot it was $180-190 range, which again was unheard of in Monticello Park.
I hear recurring criticism of the current SAISD Board; that it focuses on real estate contracts and business opportunities – via new construction, bond deals, acquisition of property, and sub-contracting – rather than on the real business of the school district, educating children.
I’ve heard so much about Ed Garza’s interest in real estate that I decided to do some independent research on his real estate track record. Say what you like about his term as mayor, or his term as SAISD Board President, Ed Garza has clearly succeeded with real estate.
Through my investment business I’ve bought and sold a few dozen properties in the past decade, so I have experience looking at real estate transactions, and a few tools for doing a dive into his results.
I have to say, his track record on a number of real estate deals is incredible.
By that I’m using the literal meaning of the word: Not credible.
In the following posts I review some of the details that I find incredible, or at best highly unlikely.
I believe the results would need ‘help,’ possibly via political patronage or influence peddling.
I describe the transactions in detail so others can decide for themselves.
Two other thoughts, by way of preamble
a) I did not find an illegal real estate deal. I can only point to a pattern which, as an experienced real estate investor, I don’t think could be reproduced by others. If any reader can use this information to find a ‘smoking gun,’ I’m happy to serve as a nexus of crowd-sourced information.
b) I don’t know Ed Garza. I’ve never met him. Garza has a right to earn a living in real estate investing. Many people I’ve spoken with in recent years, however, share the uneasy feeling that real estate and business deals drive his leadership of the SAISD Board.
What’s at stake with the SAISD? Why do I care?
My oldest child is subject to the leadership of the school district every day, as she attends a public school in SAISD. Decisions of the school board affect my child’s life, and therefore my life, in a deep, visceral way. When the board focuses on the wrong things, then I, as a parent, feel a threat to my child’s future.
For the City of San Antonio the stakes are even higher.
The leadership of the SAISD knows that their success rate – as defined by graduating seniors considered “College Ready” via a minimal standardized test score – is 7%. That deserves restating: 7% of the kids in the SAISD system are ready to go to college by the time they graduate from the SAISD system. At the present rate, just 3,780 of the 54,000 children in SAISD can expect to go on to succeed in college.
This is horrible news.
That 7% success rate mirrors another statistic almost the inverse of the 7% college readiness. 93% of children attending schools in the SAISD come from disadvantaged backgrounds. 50,220 of the 54,000 kids in SAISD are economically disadvantaged.
We know that attending college – and most importantly, graduating from college – provides the key to getting ahead economically.
Putting those two statistics side-by-side, therefore, we can extrapolate the following: If we don’t change the 7% college-readiness statistic at SAISD, right now, today, we lock in the next generation of poverty for San Antonio.
We’re playing for high stakes.
College-readiness, as a way to address inter-generational poverty, needs the laser-like focus of the SAISD Board. Garza appears to lead the board with a focus on business and real-estate opportunities.
Real Estate Deal – #1 – 139 North Street, San Antonio 78201
Ed Garza and real estate partner Sam Wayne purchased – via their real estate joint venture known as Urban One 30 Group LLC – a property at 139 North Street, a 3 Bed 2 Bath 1,976 square foot stone construction house built in 1930. The property is in the neighborhood of Monticello Park, adjacent to and just North of Garza’s own neighborhood. Monticello Park features attractive single-story and 1.5 story houses built in the 1920s and 1930s.
Urban One 30 LLC obtained a Deed of Trust[1] through Sterling Bank for $125,800, interest only, that matured nine months later, in December 2008. They probably intended to ‘flip’ the property quickly, hence the nine-month loan and interest-only provision.
Here’s how the property looked at acquisition:
Unfortunately, March 2008 was a tough time to acquire real estate for flipping – as a nation we’d be in full-on financial crisis mode by the Summer of 2008 – so Garza and Wayne refinanced the loan when it matured in December 2008.
They refinanced and extended the loan – then for $125,785 – for an additional five years to December 2013, interest-only for the first 6 months, followed by a 4.5-year amortization schedule.
Here’s where it gets weird
And then the first suspicious thing happened.
Two years after they extended the loan, and around the time they unsuccessfully listed it for sale for $145,000 in 2011, first with realty company Vflyer and next with Keller Williams, a massive fire gutted the property.
Hmm. Ok. Was the contractor using explosives? Because this isn’t the work of a casual cigarette butt tossed next to an open aerosol can. I’ve looked at the property up close and it’s a catastrophe.
And here it is from the front, in which you can see the burned roof.
then there’s the side angle:
139 North Street, San Antonio TX 78201, from the side
another side angle:
And an interior shot:
139 North Street, San Antonio TX 78201, interior photo May 2013
Now, in the real estate world, let’s just say there’s a weird correlation between unsold buildings with mortgages and insurance that tend to catch fire in economic downturns.[2]
I know the property had insurance because there was a mortgage from Sterling Bank, and all mortgage lenders insist on insurance, including for fires.
Why do properties in economic downturns mysteriously catch fire, and inevitably the fire is large and catastrophic rather than contained? A fire insurance payout for the whole property can be a way for a financially distressed developer to collect insurance proceeds. That money then allows the developer to stay current on the mortgage, or to rehab the building. I’ve even seen situations in which the insurance proceeds can be offered to a new buyer, as an incentive to purchase a burned property, lowering the cost of acquisition.
Among the curious aspects of the 139 North Street situation is that, following the fire, the property never got rebuilt.
Does that mean the insurance company refused to pay because the fire appeared too suspicious? That in itself would be very interesting information, and would explain why the property lay burned and unimproved for so long.
I don’t know what caused the fire 139 North Street, but I’d really love to read the fire inspector’s report, or the insurance company’s investigation. I’d also be curious about the result of litigation Garza said he pursued against the contractor.
So then what happened?
Ok, let’s jump to the Spring of 2013. The Express-News’ Brian Chasnoff features this Monticello Park eyesore in a column. Chasnoff interviewed Neighborhood Association President Rob Sipes, who admits his Association is afraid to complain to the City about Garza’s burned out hulk because it may compromise ongoing neighborhood discussions about lighting and fencing at Jefferson High School.[3]
It seems reasonable from Chasnoff’s article to assume that the City and neighborhood treatment of Garza and his eyesore reflect his political clout.
Meanwhile, the Bexar County tax assessed value dropped from $131,900 to $57,660 in 2013, as makes sense for an empty, burned-out husk of a house.[4]
Another odd detail of Ed Garza’s real estate businesses
Two of Garza’s seemingly primary real estate businesses were ‘involuntarily terminated’ by the Texas Secretary of State in August 2011.
Ed Garza and partner Sam Wayne formed Urban One 30 Group LLC in November 2007, and they later formed Zane Garway Consulting LLC in October 2009. A few years later, In March 2011, the ‘Registered Agent’ for both LLCs[5] filed a notification of ‘resignation,’ sending them a certified letter to let them know. The certified letter was to ensure Garza and Wayne couldn’t claim later to have not been notified, because of a letter lost in the mail, for example, or an incorrect address.
As you can see from the document, no reason is given in the resignation, although the most obvious reason would be for non-payment, most likely of just a few hundred dollars.
What happens next is that in August 2011, the Texas Secretary of State ‘involuntarily terminates’ Urban One 30 Group LLC and Zane Garway Consulting LLC – essentially making it improper for them to do any business in the State of Texas. The termination is for not keeping a registered agent. The effect is that nether entity then maintains required state filings, such as an annual ownership registration, an affiliated-entity registrations, or annual franchise tax registration. From my perspective, this may either be a result of neglect, a financial choice, or it may be a strategic choice.
There’s nothing necessarily shocking about the registered agent resignation and the subsequent termination. It does not mean necessarily they found something improper. It does mean, however, that Garza and Wayne a) Through neglect or for strategic reasons, failed to pay for a basic requirement of doing business and b) Through neglect or for strategic reasons, allowed their businesses to go ‘dark’ in the state of Texas from the perspective of reporting contact information, ownership information, or filing franchise tax information.
I do think there’s something unusual about a real estate investor and self-designated professional urban planner who lets his businesses, in this case two active legal entities, Urban One 30 Group LLC and Zane Garway Consulting LLC – both of which he shares with Sam Wayne – get ‘involuntarily terminated.’
Imagine my surprise to learn that Urban One 30 Group LLC sold 139 North last month for $156,250. That’s exactly $1,000 less than Garza and Wayne paid in 2008, before the house was a burned-out shell.
That got me thinking – and curious about – who would buy such a house, at such a price?
The Buyer
The buyer of 139 North is Nuvista LLC, a newly formed LLC, which first registered with a San Antonio PO Box in November 2012. Nuvista also acquired two other distressed properties in the nearby neighborhood, in December 2012 and March 2013, and a fourth distressed property last month.
Nuvista LLC is an unusual buyer, and the financing is odd as well.
The lender to Nuvista on the property at 139 North is called “Steadfast Funding LLC,” but that group does not appear to exist in Texas. Two private individuals in Allen TX are also listed as the principal backers of the construction loan to Nuvista, which matures in 6 months.
The owner and founder of Nuvista LLC and his wife declared bankruptcy a year ago in Arizona, in April 2012.
The owner of the LLC is listed as the founder of 20 different LLCs over the years.
The owner of the LLC has Arizona bank judgments against him for $538,497 and $42,729 from two different banks, a California State Tax Lien against him for $2,348, and a California judgment for $1,518.
I know it’s just a coincidence, but do you know who else had California State Tax Liens, and Arizona bank judgments?
Manuel Isquierdo did! Isquierdo is the Superintendent finalist that Ed Garza’s SAISD board nominated last month. In my article about Isquierdo’s nomination, I implied that board members might find a financially distressed Superintendent an advantage, rather than a disadvantage, and stated that I don’t believe in coincidences.
Let me clarify: I have no reason to think that Isquierdo and the owner of Nuvista LLC are actually linked.
But a recently bankrupt, financially desperate real estate investor paying 3 times too much for Garza’s burned-out property seems funny to me. How does the financially insolvent purchaser get a private mortgage anyway? Lenders aren’t stupid, in my experience.
It’s not illegal to pay too much for a property, but it strikes me as unlikely without a particular reason.
How did Urban One 30 find a buyer like Nuvista? Why would Nuvista pay the same amount for the property in its present, burnt-out, condition, when the tax assessed value is nearly 1/3 of its earlier value?
The fire at the location two years ago. The de-listed LLCs. The sale in April 2013. It’s incredible.
Real Estate Deal #2 – 2006 W. Magnolia Ave, San Antonio TX 78201
Ed Garza and Urban One 30 LLC partner Sam Wayne purchased 2006 W. Magnolia in March, 2008 for $150,000, with a $120,000 9 month interest-only construction loan from Sterling Bank. The 3-bedroom 1-bath house, built in 1928, boasts 1,386 square feet, with an attractive stone exterior.
Along with the 139 North Street property also purchased in March 2008, the economic downturn probably upturned their plan for a quick flip within the term of the 9-month loan.
In December 2009 Urban One 30 Group refinanced the full $120,000 loan for an additional 5-year term, again interest-only for 6 months, followed by a 4.5-year amortization.
We learn from the article that then-State Representative, future Congressman, and most importantly First Twin of San Antonio, Joaquin Castro had co-invested in the property with Garza.
Castro mentions to the Express-News that he’s only seen the property once, had no input into the renovation, and following a sale will just keep his money with Garza.
As the Express-News quotes Garza: “I guess he’s a silent partner. He’s only been out to the house once. That’s the kind of investor we like.”
Um, yeah. I’d agree that’s the kind of investor Garza likes.
I mean, what could go wrong? You’ve got the Mayor’s brother and future Congressman’s money co-invested with you. And he’s never seen the property but once. And by his own admission Castro has no input into the situation.
It’s not a knock on Castro that he trusts Garza to make money for him in real estate. But it does seem to be the kind of relationship-based real estate investing that Garza would seek out, to his own personal advantage. At the very least, Garza has arranged a cozy financial relationship with the Mayor’s family.
But the story of this property gets better because, like I said, he’s incredible.
The Property Value
Figuring out the value for this property at 2006 W. Magnolia is really a puzzle.
Between the purchase in 2008 and the sale in 2010, the Bexar County tax assessed value of 2006 W. Magnolia dropped steadily from $130,230, to $121,960 in 2009, to settle at $111,320 in 2010, at the time of the sale.
And then following the sale, tax assessed value stayed steady, at $122,770, $114,620, and $116,070 in years 2011, 2012, and 2013. So we’ve got a range over the past 6 years between $114K and $130K.
It’s possible the Bexar County assessor does not know about the renovations, or has declined to update the values on the house.
What about other sources for figuring out value?
The online real estate value site Zillow charts 2006 W. Magnolia steadily in the $105K to $130K range over the past 5 years.
I’ve been using online real estate value estimator Zillow.com steadily since 2004, and I can’t recall an outlier value like the one that we see with 2006 W. Magnolia. The property sold for twice the value that would be expected using either Bexar County tax assessment or independent sales data for determining expected value in the neighborhood.
In the Zillow commentary on this property, you can read a real estate agent shilling for 2006 W Magnolia: “Urban One 30, Mayor Ed Garza and Sam Wayne did it again guys.”
Like I said, Garza is incredible at real estate. Castro’s faith in him was rewarded.
Who bought this for twice its expected value? How did he get a mortgage?
Another puzzle.
The individual purchaser bought 2006 W. Magnolia in November 2010, paying $230,348.68 – an outlier price, far above any indicated independent value for this property.
Stranger-still, the purchaser obtained a 30 year mortgage for $228,068.
For those of you doing the math at home, that not a 20%-down-payment mortgage, and that’s not a 5%-down-payment mortgage. That’s a 1%-down-payment mortgage.
The purchaser appears to work at a local coffee shop on North St. Mary Street.
What I find puzzling is the following items:
1. Like the purchaser of 2006 W. Magnolia, I got a mortgage in 2010 myself. I also obtained mortgages in 1999 and 2004. Compared to back then, I can attest that the 2010 mortgage environment was very tough.
2. Banks, since 2008, are reluctant to lend without a substantial down payment, a high property assessed value, reliable income, and great credit.
3. At the very least, on the assessed value and down payment side of things, this transaction is unusual. If the purchaser has anything less than high income and perfect credit, then this 1% mortgage is even odder.
When you can sell a property for $100,000 more than others think it’s worth, and your buyer can get a 1% money-down mortgage in the tough 2010 lending environment, I’d say you’ve got some real estate chops.
When you can sell like that and also generate some cash for the City’s First Twin and future Congressman, you’re really doing well.
The Zillow Value of 1919 W. Magnolia at the time of purchase was $159K in October 2006. Garza took out a loan at that time for $85,880 from San Antonio Federal Credit Union.
Just 7 months later, in May 2007, he sold the property to an individual for $250,040!
How good is Garza? Very good.
Garza bought it for $114,220, or 39% lower than the Zillow valuation, and 65% lower than the Bexar County 2008 value.
Garza sold it for $250,040, or 57% higher than Zillow indicated, and 32% higher than Bexar County 2008 assessed value.
All in just 7 months, for a 119% increase in price. It more than doubled.
No wonder he got the real estate bug after that flip.
Is there anything wrong here?
The only two nearby comparable houses for sale, on the 2100 block of Magnolia, as of this writing, are both listed for less than $200,000.
Of the 26 properties that share the same city block as 1919 W. Magnolia, none have a Zillow value above $157,000, or roughly $100,000 less than what Garza flipped this for in 2007. The average Zillow value of the 26 houses is $123,153.
Was it just frothy real estate times? Maybe. In late 2006 to early 2007, this kind of price action is possible, so this may be nothing more than what it seems: A good buy and a good sale.
But how does he acquire the property for $114,220 just 7 months earlier?
In the end I can’t find anything circumstantially fishy – like a massive fire or a financially distressed buyer – about the 1919 W. Magnolia transaction, other than the amazing price appreciation in 7 months.
The transaction may help explain why Ed Garza got the idea that real estate should be his focus.
Like many of us in the school district, I want his focus at SAISD on the kids’ education, not the real estate contracts.
[2] If you’re a fan of Michael Lewis’ books you may recall the chapter in Boomerang about mysterious explosions all around Iceland when their financial crisis started. That was the sound of SUVs exploding like fireworks throughout the capital, all the better to collect insurance and relieve the owners of paying their suddenly unaffordable car loans.
[3] Folks closer to Garza frequently mention his adoption of his alma mater Jefferson as his own private Superintendent-ship.
[4] In 2011, tax-assessed value was $115,250, but then it dropped post-fire in 2012 to $58,500. Which makes sense.
[5] A quick note on a ‘registered agent’ if that’s not a familiar term for readers: Every corporation, LLC, or partnership – at the time of the company’s birth – informs their home state of a designated contact person and address known as a registered agent. Most businesses choose a professional ‘registered agent’ that can receive official notices such as lawsuits or government actions. It costs a few hundred dollars a year, and you have to tell your state who it is.
Real Estate Deal – #1 – 139 North Street, San Antonio 78201
Ed Garza and real estate partner Sam Wayne purchased – via their real estate joint venture known as Urban One 30 Group LLC – a property at 139 North Street, a 3 Bed 2 Bath 1,976 square foot stone construction house built in 1930.The property is in the neighborhood of Monticello Park, adjacent to and just North of Garza’s own neighborhood.Monticello Park features attractive single-story and 1.5 story houses built in the 1920s and 1930s.
Urban One 30 LLC obtained a Deed of Trust[1] through Sterling Bank for $125,800, interest only, that matured nine months later, in December 2008.They probably intended to ‘flip’ the property quickly, hence the nine-month loan and interest-only provision.
Here’s how the property looked at acquisition:
Unfortunately, March 2008 was a tough time to acquire real estate for flipping – as a nation we’d be in full-on financial crisis mode by the Summer of 2008 – so Garza and Wayne refinanced the loan when it matured in December 2008.
They refinanced and extended the loan – then for $125,785 – for an additional five years to December 2013, interest-only for the first 6 months, followed by a 4.5-year amortization schedule.
Here’s where it gets weird
And then the first suspicious thing happened.
Two years after they extended the loan, and around the time they unsuccessfully listed it for sale for $145,000 in 2011, first with realty company Vflyer and next with Keller Williams, a massive fire gutted the property.
Hmm.Ok.Was the contractor using explosives?Because this isn’t the work of a casual cigarette butt tossed next to an open aerosol can.I looked at the property up close last month, and it’s a catastrophe.Here it is inside:
And here it is from the front, in which you can see the burned roof.
then there’s the side angle:
Another side angle:
And an interior shot:
Now, in the real estate world, let’s just say there’s a weird correlation between unsold buildings with mortgages and insurance that tend to catch fire in economic downturns.[2]
I know that property had insurance because there was a mortgage from Sterling Bank, and all mortgage lenders insist on insurance, including for fires.
Why do properties in economic downturns mysteriously catch fire, and inevitably the fire is large and catastrophic rather than contained?A fire insurance payout for the whole property can be a way for a financially distressed developer to collect insurance proceeds.That money then allows the developer to stay current on the mortgage, or to rehab the building.I’ve even seen situations in which the insurance proceeds can be offered to a new buyer, as an incentive to purchase a burned property, lowering the cost of acquisition.
Among the curious aspects of the 139 North Street situation is that, following the fire, the property never got rebuilt.
Does that mean the insurance company refused to pay because the fire appeared too suspicious?That in itself would be very interesting information, and would explain why the property lay burned and unimproved for so long.
I don’t know what caused the fire 139 North Street, but I’d really love to read the fire inspector’s report, or the insurance company’s investigation.I’d also be curious about the result of litigation Garza said he pursued against the contractor.
So then what happened?
Ok, let’s jump to the Spring of 2013.The Express-News’ Brian Chasnoff features this Monticello Park eyesore in a column.Chasnoff interviewed Neighborhood Association President Rob Sipes, who admits his Association is afraid to complain to the City about Garza’s burned out hulk because it may compromise ongoing neighborhood discussions about lighting and fencing at Jefferson High School.[3]
It seems reasonable from Chasnoff’s article to assume that the City and neighborhood treatment of Garza and his eyesore reflect his political clout.
Meanwhile, the Bexar County tax assessed value dropped from $131,900 to $57,660 in 2013, as makes sense for an empty, burned-out husk of a house.[4]
Another odd detail of Ed Garza’s real estate businesses
Two of Garza’s seemingly primary real estate businesses were ‘involuntarily terminated’ by the Texas Secretary of State in August 2011.
Ed Garza and partner Sam Wayne formed Urban One 30 LLC in November 2007, and they later formed Zane Garway Consulting LLC in October 2009.A few years later, In March 2011, the ‘Registered Agent’ for both LLCs[5] filed a notification of ‘resignation,’ essentially firing Garza’s 2 companies as clients, and sending them a certified letter to let them know. The certified letter was to ensure Garza and Wayne couldn’t claim later to have not been notified, because of a letter lost in the mail, for example, or an incorrect address.
As you can see from the document, no reason is given in the resignation, although the most obvious reason would be for non-payment, most likely of just a few hundred dollars.
What happens next is that in August 2011, the Texas Secretary of State ‘involuntarily terminates’ Urban One 30 Group LLC and Zane Garway Consulting LLC – essentially making it improper for them to do any business in the State of Texas.The termination is for not keeping a registered agent.The effect is that nether entity then maintains required state filings, such as an annual ownership registration, an affiliated-entity registrations, or annual franchise tax registration.From my perspective, this may either a result of neglect, or it may be a strategic choice.
There’s nothing necessarily shocking about the registered agent resignation and the subsequent termination.It does not mean necessarily they found something improper.It does mean, however, that Garza and Wayne a) Through neglect or for strategic reasons, failed to pay for a basic requirement of doing business and b) Through neglect or for strategic reasons, allowed their businesses to go ‘dark’ in the state of Texas from the perspective of reporting contact information, ownership information, or filing franchise tax information.
I do think there’s something strange about a real estate investor and self-designated professional urban planner who lets his businesses, in this case two active legal entities, Urban One 30 LLC and Zane Garway Consulting LLC – both of which he shares with Sam Wayne – get ‘involuntarily terminated.’
Imagine my surprise to learn that Urban One 30 Group LLC sold 139 North last month for $156,250.That’s exactly $1,000 less than Garza and Wayne paid in 2008, before the house was a burned-out shell.
That got me thinking – and curious about – who would buy such a house, at such a price?
The Buyer
The buyer of 139 North is Nuvista LLC, a newly formed LLC, which first registered with a San Antonio PO Box in November 2012.Nuvista also acquired two other distressed properties in the nearby neighborhood, in December 2012 and March 2013, and a fourth distressed property last month.
Nuvista LLC is an unusual buyer, and the financing is odd as well.
The lender to Nuvista on the property at 139 North is called “Steadfast Funding LLC,” but that group does not appear to exist in Texas.Two private individuals in Allen TX are also listed as the principal backers of the construction loan to Nuvista, which matures in 6 months.
The owner and founder of Nuvista LLC and his wife declared bankruptcy a year ago in Arizona, in April 2012.
The owner of the LLC is listed as the founder of 20 different LLCs over the years.
The owner of the LLC has Arizona bank judgments against him for $538,497 and $42,729 from two different banks, a California State Tax Lien against him for $2,348, and a California judgment for $1,518.
I know it’s just a coincidence, but do you know who else had California State Tax Liens, and Arizona bank judgments?
Manuel Isquierdo did!Isquierdo is the Superintendent finalist that Ed Garza’s SAISD board nominated last month.In my article about Isquierdo’s nomination, I implied that board members might find a financially distressed Superintendent an advantage, rather than a disadvantage, and stated that I don’t believe in coincidences.
Let me clarify: I have no reason to think that Isquierdo and the owner of Nuvista LLC are actually linked.
But a recently bankrupt, financially desperate real estate investor paying 3 times too much for Garza’s burned-out property seems funny to me.How does the financially insolvent purchaser get a private mortgage anyway?Lenders aren’t stupid, in my experience.
It’s not illegal to pay too much for a property, but it strikes me as unlikely without a particular reason.
How did Urban One 30 find a buyer like Nuvista?Why would Nuvista pay the same amount for the property in its present, burnt-out, condition, when the tax assessed value is nearly 1/3 of its earlier value?
The fire at the location two years ago.The de-listed LLCs. The sale this past month.It’s incredible.
[2] If you’re a fan of Michael Lewis’ books you may recall the chapter in Boomerangabout mysterious explosions all around Iceland when their financial crisis started.That was the sound of SUVs exploding like fireworks throughout the capital, all the better to collect insurance and relieve the owners of paying their suddenly unaffordable car loans.
[3] Folks closer to Garza frequently mention his adoption of his alma mater Jefferson as his own private Superintendent-ship.
[4] In 2011, tax-assessed value was $115,250, but then it dropped post-fire in 2012 to $58,500.Which makes sense.
[5] A quick note on a ‘registered agent’ if that’s not a familiar term for readers: Every corporation, LLC, or partnership – at the time of the company’s birth – informs their home state of a designated contact person and address known as a registered agent.Most businesses choose a professional ‘registered agent’ that can receive official notices such as lawsuits or government actions.It costs a few hundred dollars a year, and you have to tell your state who it is.
Real Estate Deal #2 – 2006 W. Magnolia Ave, San Antonio TX 78201
Ed Garza and Urban One 30 LLC partner Sam Wayne purchased 2006 W. Magnolia in March, 2008 for $150,000, with a $120,000 9 month interest-only construction loan from Sterling Bank.The 3-bedroom 1-bath house, built in 1928, boasts 1,386 square feet, with an attractive stone exterior.
Along with the 139 North Street property also purchased in March 2008, the economic downturn probably upturned their plan for a quick flip within the term of the 9-month loan.
In December 2009 Urban One 30 Group refinanced the full $120,000 loan for an additional 5-year term, again interest-only for 6 months, followed by a 4.5-year amortization.
We learn from the article that then-State Representative, future Congressman, and most importantly First Twin of San Antonio, Joaquin Castro had co-invested in the property with Garza.
Castro mentions to the Express-News that he’s only seen the property once, had no input into the renovation, and following a sale will just keep his money with Garza.
As the Express-News quotes Garza: “I guess he’s a silent partner.He’s only been out to the house once.That’s the kind of investor we like.”
Um, yeah.I’d agree that’s the kind of investor Garza likes.
I mean, what could go wrong?You’ve got the Mayor’s brother and future Congressman’s money co-invested with you.And he’s never seen the property but once.And by his own admission Castro has no input into the situation.
It’s not a knock on Castro that he trusts Garza to make money for him in real estate.But it does seem to be the kind of relationship-based real estate investing that Garza would seek out, to his own personal advantage.At the very least, Garza has arranged a cozy financial relationship with the Mayor’s family.
But the story of this property gets better because, like I said, he’s incredible.
The Property Value
Figuring out the value for this property at 2006 W. Magnolia is really a puzzle.
Between the purchase in 2008 and the sale in 2010, the Bexar County tax assessed value of 2006 W. Magnolia dropped steadily from $130,230, to $121,960 in 2009, to settle at $111,320 in 2010, at the time of the sale.
And then following the sale, tax assessed value stayed steady, at $122,770, $114,620, and $116,070 in years 2011, 2012, and 2013.So we’ve got a range over the past 6 years between $114K and $130K.
It’s possible the Bexar County assessor does not know about the renovations, or has declined to update the values on the house.
What about other sources for figuring out value?
The online real estate value site Zillow charts 2006 W. Magnolia steadily in the $105K to $130K range over the past 5 years.
I’ve been using online real estate value estimator Zillow.com steadily since 2004, and I can’t recall an outlier value like the one that we see with 2006 W. Magnolia.The property sold for twice the value that would be expected using either Bexar County tax assessment or independent sales data for determining expected value in the neighborhood.
In the Zillow commentary on this property, you can read a real estate agent shilling for 2006 W Magnolia: “Urban One 30, Mayor Ed Garza and Sam Wayne did it again guys.”
Like I said, Garza is incredible at real estate.Castro’s faith in him was rewarded.
Who bought this for twice its expected value?How did he get a mortgage?
Another puzzle.
The individual purchaser bought 2006 W. Magnolia in November 2010, paying $230,348.68 – an outlier price, far above any indicated independent value for this property.
Stranger-still, the purchaser obtained a 30 year mortgage for $228,068.
For those of you doing the math at home, that not a 20%-down-payment mortgage, and that’s not a 5%-down-payment mortgage.That’s a 1%-down-payment mortgage.
The purchaser appears to work at a local coffee shop on North St. Mary Street.
What I find puzzling is the following items:
1. Like the purchaser of 2006 W. Magnolia, I got a mortgage in 2010 myself.I also obtained mortgages in 1999 and 2004.Compared to back then, I can attest that the 2010 mortgage environment was very tough.
2. Banks, since 2008, are reluctant to lend without a substantial down payment, a high property assessed value, reliable income, and great credit.
3. At the very least, on the assessed value and down payment side of things, this transaction is unusual.If the purchaser has anything less than high income and perfect credit, then this 1% mortgage is even odder.
When you can sell a property for $100,000 more than others think it’s worth, and your buyer can get a 1% money-down mortgage in the tough 2010 lending environment, I’d say you’ve got some real estate chops.
When you can sell like that and also generate some cash for the City’s First Twin and future Congressman, you’re really doing well.
In April of this year my local school district initially offered to hire, and then encouraged the withdrawal of the candidacy of Superintendent Manuel Isquierdo from the Tucson, Arizona school district known as Sunnyside Unified School District, following disclosure of Isquierdo’s financial distress and a pattern of minor legal troubles. 
