Swim Pool Baptismal Font(James brown) After our business lunch we exited to the hotel’s swim pool patio for contract signing.

It was a1985 September afternoon in Portland, Oregon. The area’s drizzle climate was still on its summer pause that lingers into Indian summer before October’s change back to rain. We wore sports coats and ties despite the suggested shirt sleeve weather due to formality of signing papers to start a new company.

Around a glass table were 5 chairs but atop it were 4 glasses of bourbon. Larry, who introduced me to the others, said there’ be another glass of bourbon when I agreed to sign my contract.Steve, the president of the new company, pulled five contracts from his briefcase and set them on the table, each with a name for those present. After signing, we were to down our bourbon and jump in the pool, as dressed, a baptism to symbolize our new company brotherhood changed status.

I alone didn’t know if I was going remain drink and clothes dry. The others assumed I’d jump, shoes and all, without reservations. To them, inviting me to join as a partner was a privilege, an afterthought of their creation.

I’d agreed to be at the table due to financial distress, not eagerness. I wished I wasn’t there, and was skeptical my signature would cure my checking account problem.

Few haven’t feared the problem their check not clearing at the bank. It wasn’t that kind of fear, that brought me to the table. My check clearance was a fear few experience. It was my paycheck wouldn’t clear.

My employer, Marshall and Stevens, a national appraisal company, was under attack, by accounting sharks, back then referred to as the Big 8. It was on the economic ropes, a yo-yo swinging by a string as it spun out of control due to the frenzied bites of the Big 8.

Previously the Big 8 were friends, sources of appraisal work. Suddenly hey decided to do appraisals themselves despite conflict of interest. With appraisal work diverted to the Big 8, my prospects at Marshall and Stevens brought me to the table by the pool.

Accounting firms jiggled numbers for clients under their definition of standard accounting practice. When Mt. Saint Helen's erupted, a Big 8 motel chain client wanted to claim catastrophic value loss. Marshall and Stevens was contracted to document the loss. The problem was occupancy and room rates rose up after the eruption as thousands came to see the volcano. The accountant still insisted I should document a value loss.

Appraisal companies estimated values as a disinterested third-party. At Marshall and Stevens, I did not get value pressure. I understood my value conclusions could be client sensitive but impartially estimated market value, albeit on the reasonable side of the range the client preferred.

The Big, 8 operated as partner pyramids. University graduates were hired, paid a pittance, worked long hours and the survivors became partners who in turn milked new hires. It all worked if the firm continued to grow.

To grow, they expanded into appraising. They did not buy appraisal companies. They used their pyramid formula, hired key employees of appraisal companies as partners with the appraiser underlings following and folded into the base.

One of the Big 8 already took a bite out of Marshall and Stevens. The LA manager spent a few days walking around the office in a daze, jumped and took appraisers with him. A key salesperson followed and my work out of LA started to dry up.

Marshall and Stevens was not a pyramid structure. I had loyalty to it. It hired me when I was desperate, reimbursed me well, promoted me, paid for my appraisal classes, and provided work sold out of LA when Portland didn’t.

In the prior year I’d been promoted to Senior Appraiser and been designated company appraiser of the year, sops acquired during annual salary negotiations. While I travel nationally, I garnered travel perks.

Travel itineraries, before the internet, were by agents who got 10% of the cost. My agent, Chris, arranged the best for my employer and me and I booked exclusively with him. I earned free airline tickets, car rentals, hotel stays, gifts and made money on meal reimbursements.

Now it was all in jeopardy. I didn’t want to jump ship, but my ship was getting lower in the financial water. I wanted to continue working with Marshall and Stevens and avoid working at any of the Big 8.

In truth, I wasn’t tempted to jump ship. There were no Big 8 inquires of my availability. Financially I was on the edge, a disposable clog fretting over health insurance coverage, mortgage payments and my paycheck clearing the bank.

On the surface, everything was the same. Underneath, everything had changed, not suddenly but within a few months.

Leaving home, flying to another appraisal location, returning home, writing the report, I knew it might be the last one. I started to have down time, a sure sign the chicken is no longer needed. I laid awake at night, wondering if the appraisal just finished was the last appraisal egg laid, and if the ax would fall.

The closure ax fell not from LA but Portland.

Larry, the Portland salesperson and office manager, had a large private office with interior window that provided him a view of the other staff in our cubicles. When he wanted privacy, when his girlfriends visited, he pulled the window’s wood Venetian blinds down.

Arriving at the Portland office, Larry called me to his office, the Venetian blinds drawn, had me sit, closed the door, sat is his personalized swivel chair, turned to me, and smirk, smiled across his desk.

“Jim, what I’m going to say is only between us.”

I assumed he was going to tell me about a big appraisal assignment sale or one of his sexcapades as he was wont to do. I was in a mix of business and purveyor curiosity. Instead, he said,

“Jim key people at American Appraisal’s Seattle office and I are forming a new appraisal company. We want you to be a part of it. Are you interested.”

I liked Larry. In the 5 years we’d worked together we only had only one significant disagreement when he was upset with my appraised value a client didn’t like. It was resolved when I retorted he needed to go back in his office, pull the blinds and breathe deeply.

His lechery was unabashed. The office joke was he would screw a snake under two conditions, it was female, and he could stop it from slithering. The married secretary was a former mistress whose husband thought she had an affair with me when it was Larry.

His sexcapades were not my concern, my only judgement was he needed to move up in female quality. The one only thing I didn’t like was he didn’t sell enough real estate appraisals to keep me busy which made me dependent on LA sold work.

American Appraisal was the nation’s largest appraisal company, about twice the size of Marshall and Stevens. It too was a victim of Big 8 shark bites.

I asked,

“Who are the Seattle people?”

“The office manager, salesman and key machinery and equipment appraiser.”

This explained my being called into his office. They needed a real estate appraiser.

“I don’t know the Seattle people. What would be my position.”

“Partner to manage real estate appraising.”

My reaction was I lacked capital for equity investment. I worried about my checks not clearing, not investing in a new company.

I didn’t want to expose that card so instead asked,

” What’s the new company’s name?”

“Consilium, it’s a Greek word that the Seattle manager came up with. It means consul or advise.”

“Mm… sounds like a name for a floor tile company.”

Larry didn’t appreciate my humor. He was serious, already a new company man.

“Jim, are you interested? I need to get back to the others and let them know.”

What could I say? Of course I was interested. Once Larry left Portland would be shut down, I’d be out of a job in an Oregon depression.

“I’m interested. Tell me the details and let me know when I can meet the Seattle people.”

I was interested, not enthusiastic. Change was coming, but I wanted it not to come. Now it was coming, like it or not.

What were my options? Work temporarily from home for Marshall and Stevens, find employment with a local appraisal shop, find government work, or join Consilium.

I could also open my own appraisal shop but wasn’t a real option. I had no sales experience, no capital, and Oregon’ s economy was depressed with the prime interest rate at 21%. Orgeon’s timber exports were down but its export of appraiser was up.

“When can I know the details?

We’re working on those with an attorney and have a meeting scheduled in a week on Monday. I’ll tell the others you are interested. It’s a great opportunity for you. I’m calling the West Coast manager to inform him I’m resigning. He’ll probably shut the office down. He would have sooner, but they couldn’t get out of the office lease.”

After I left Larry’s office, he called in his resignation and left as if nothing was amiss, his personal stuff already taken. It was only the secretary Jan, and I in the know.

The next day, the new West Cost manager, flew up from LA for damage control. He made it official, the Portland office was closing, and Larry was gone. Things switched to hyper change.

He said I could temporarily work from home but wanted me to relocate to LA, with a raise and a title promotion, his way of saying working out of my house long term was out.

I was upfront too, told him I wasn’t taking the kids out of school, my way of saying no to moving to LA. I told him Larry wanted me to join Consilium. He said,

“Jim, make sure you get equity, not a job.”

One decision had been made, Marshall and Stevens long term employment was out not in a week or month but soon.

I the next day, Tuesday, I contacted local appraisal offices about work. They considered my quest humorous One summed it up,

“Jim, I’ve’ just laid off my son.”

A second option decision was made, work at another appraisal shop was out due to Oregon’s depressed economy.

Wednesday, I checked possible governmental employment. No positions within commute distance were open. Waiting for one could take years. The third option was out.

Thursday morning it appeared Consilium was my future. I checked in at the Portland office. Shut down chaos prevailed. Everyone scrambled to find change options with most hoping to go to work for Consilium.

The secretary, Jan, was not one going to be a part of the Consilium. She’d decided she was starting life anew with her husband, her response to the Principle of Change. Since Larry’s departure she’d beat the bushes for another job.

Instead of welcoming me when I arrived, she pulled me into Larry’s abandoned office, the blinds down. I glanced at the couch I knew she was once familiar with but walked pass it and sat on Larry’s swivel chair. The last thing I wanted was her husband’s suspicion to be true. I eased when she said,

“Jim, I have a tip for you. Yesterday I applied for a job at a new company called Executive Properties. It’s a motel/hotel real estate brokerage, firm. They don’t have a position for me but the owner, Pat, told me he was looking for an appraiser. He wants to grow from just hospitality brokerage to include mortgages and appraisals. Here’s the number you should call.”

The next day, Friday, at 10 AM, I sheepishly arrived at a new, three-story office building identified in large letters as, Executive Properties.

Brokers were in the process of setting up their new offices. My first observation was the 2 lobby receptionists. They weren’t pretty. They were beautiful, grade 10 model types. No wonder Jan realized there was no position for her.

I informed one I had an appointment with Pat. She told me to take the elevator to the third floor.

The elevator opened to a third-floor upscale lobby decorated with artwork and a receptionist that kicked the attractive scale to eleven plus.

She greeted me warmly as if I was a VIP, said she was waiting for my arrival, buzzed Pat and then escorted me in.

Pat was pleasant, the type that makes you feel at ease after a sentence or two of introductions. He was young, well dressed, say age 35, obviously liked beauty and was thinking big. I guessed the Rolls Royce I parked near to in the lot was his, a correct assumption. We went over my appraisal experience, and he perked up when I said I’d appraised hotels and motels and even appraised Television City in Hollywood.

He got right to the point, offered me a partnership with a new company he wanted to create as a subsidiary of Executive Properties. It and another subsidiary would expand his hospitality brokerage to include appraisals and mortgages.

I’d operate the appraisal subsidiary, do the appraisals, he’d’ sell them, we would split profit 50-50, but he’d retain 51% equity to my 49%. He’d cover selling cost, I appraisal cost, and I could use an office in his new building. The only suggestion I made was appraisal travel expenses would be deducted from appraisal fees before splitting profit. He simply said,

“That works.”

I left saying I was interested and would let him know by Tuesday. I had a new card in my hand, another option to mull over during the weekend before Larry’s Monday Consilium meeting.

During the weekend I reviewed my cards. Options 1, 2, and 3 were out. There was not only the 4th but now a 5th. I also had some other cards, including a big one, my ace in the hold. I was an MAI which stands for “Member of the Appraisal Institute”, aka, despairingly as “Made As Instructed”, reflecting appraisal numbers some appraisers reportedly came up with for clients. MAI was the appraising equivalent of CPA for accountants. It was difficult to obtain, required numerous expensive classes put on by the Appraisal Institute, 5 years of commercial/industrial appraisal experience, completion of a demonstration appraisal that addressed the many difficulties in appraising and a review by those who held the designation, MAI.

An MAI designation was difficult to get, the Appraisal Institute’s appraiser birth control, like doctors MD and accountants CPA. I’d slogged through the process and was first denied the designation. I was going to drop out but Frank, my LA boss, an MAI advised,

“Jim, it’s an exclusive club that wants limited membership. Just respond with a thank you for their taking the time to review your work and say you’ll be back again in a year. Eventually they will let you in. Then you will always be in demand as a MAI designated appraiser.”

It was good advice. I swallowed my pride, cooled my rage and in the next year became an MAI.

There was another good card in my hand, a wild card, nursing home appraisal experience. Marshall and Stevens sent me to appraise 3 nursing homes in Kalamazoo, Ludington, and Holland, Michigan that were purchased by a new Pasadena, California client, Beverly Enterprises.

Unlike retail, apartment, or office building properties nursing homes were atypical and difficult to appraise. They lacked nearby comparable sales and had unusual income and expense charactistics. Instead, of comparable rents, one was confronted with Medicaid, Medicare, Insurance, Veterans, and private patient revenue income. There was also the need to understand state and federal governmental regulations. I had to go to the state capitol, Lansing to get audited expenses and sales data.

Instead of flying home after property inspections I flew to LA and met with Ray, Marshall and Stevens business appraisal guru.

Ray was a silver haired, tall but heavy-set guy with watery blue eyes and a perpetual cigar in his mouth, lit or out. He had the rare ability to ask you questions as he guided you to stumble on the correct answer. When I left the cigar smoke of his office, I had a good story on how to appraise a nursing home. They were a government-controlled business wrapped up in real estate.

Beverly was pleased with the appraisals and thereafter used Marshall and Stevens for their acquisitions. Marshall and Stevens wanted me to relocate to LA to handle the tidal wave of their eventual 750 plus appraisals, but I wouldn’t relocate. I did do my share of them, about 35.

While not an ace card, the ability to appraise nursing homes was a good wild card. Other appraisers were loath to appraise nursing homes due to their depressing interior sights and smells and inability to make sense of their income, expenses and government regulations.

There were plenty of potential nursing home clients. I could do appraisals that would not intrude on Marshall and Stevens Beverly Enterprises turf.

Monday morning, I went to the Portland office to prepare for my Consilium meeting. The Executive Properties option appeared riskier than Consilium. I didn’t know who Pat was and he still would control the company with his 51% equity.

My ace MAI and nursing home wild cards didn’t trump a sure Consilium hand. I’d probably fold and join Consilium.

I arrived a tardy to let Larry give them an update of who I was. When I arrived, they were bubbly friendly. We shook hands and sat down as if I was already a partner of the new company. Larry must have done a good sales job selling me.

Lunch, while pleasant, exposed a few frays in the proposed new company. The first down note was from Ray, the machinery and equipment appraiser. He was corpulent, ordered an enormous lunch but it was something he said that jaded me.

“Jim, with our new company, as a partner, you can enjoy perks of ownership.”

I responded,

“Are you talking about possible income tax savings?”

“That and lots of little things too. For example, I love trains. When traveling between Seattle and Portland I’m going to go by train.”

As I bite into my hamburger, I thought,

“He’s excited going to ride trains. Is he nuts? We’ll be lucky to survive a year and he’s dwelling on idiotic train perks with being a boss?”

The next down note came from Jim, the Seattle Marketing person. Like Larry he was of diminutive height, thin and the nervous type but none of those were negative in themselves. It was another comment.

“I’ve already got clients lined up for Consilium. They are looking for a new appraisal company that understands their value needs.”

“Wow, he wants to sell my MAI! I know Larry woos clients with promises but goes to his office and breaths deeply when I disappoint him. With 2 salespersons they’ll gang up on me. Which one will dominate marketing, salespeople have inflated egos and with 2, one is going to dominate.”

The big topic, equity, however, was not discussed.

As a cheerful group we stood around the table and Steve made a little speech as expected for a manager. He announced we would sign our contracts, down a shot of bourbon then jump in the pool. With only 4 shots on the table, he ordered another for me. It was more down notes. Steve already had 2 martinis during lunch and was tipsy, I was again an afterthought bourbon order. He. handed out the contracts for us to sign. When he handed me mine, it was as if my signing was a formality. I didn’t need to read it even though I wasn’t involved in its making.

They passed a pen around, signed, swigged down their bourbon, and jumped in the pool clothed. In a minute they were jumping up and down soaked, yelling at me to down the glass of bourbon the waiter had brought for me, sign, and join them.

I sat at the table, scanned the contracts enough to notice they were all identical except for names, titles and amount of equity ownership. My full name was spelled correctly and my title, Real Estate Appraiser Manager, was fine.

It was equity ownership that was incorrect. Steve, as manager got 30% which I deemed appropriate for the prime mover. The other 3 each got 20%. That left me at 10%.

It was an insult, me an MAI got less than the rest.

I sat dry, stunned. They cheered me on to sign and join them. I got up, left enraged to their exclamations to stop, to not let a great opportunity escape me.

In a flash of quiet egotistical rage, I’d made my decision. I was on my own for better or worse. I was going to join a new company, my own with 100% equity. I was going to meet the Principle of Change head on. I’d change my highest and best use as change dictated. I didn’t know how. I’d figure that out tomorrow. When home, I told the wife,

“Batten the hatches, don’t write any checks, change is coming, we might lose the house, our fate is sink or swim. I’m creating my own appraisal company.”

She calmly replied,

“Relax, we still have us and the kids. Que sera, sera, whatever will be, will be, we’ll face it together.”

Change did come, bigger than I expected. It was a roller coaster of new experiences.

In 5 years, it was good luck they offered me 10% equity.

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