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Bizarre Stories Of Hidden Rooms And Unexpected Client EncountersEveryone, we’re so happy that you can join us for some wild and fun stories. Bob, we’ve got little things to toss around. What do you think?
Yeah. It’s going to be a free association. Come up with some stuff and see what we can dredge from our memories.
I have a good story. I was showing a house a couple of months ago, and the house was about $60 million. Now, it’s about $64 million because the market’s gone up. It was a beautiful house on a very large piece of property. As we walked back around the pool, there were these stairs, and I thought, “You’re going down to another little fire pit or an area like that.” We go down the stairs, there were these glass doors, and there was this big metal detector thing that you’d walkthrough. I thought, “This is really interesting.”
You walk through the metal detector, the glass doors and this whole world underground opened up of over about 2,500 square feet. You felt like if it was in the apocalypse. You would be there. You could survive there if the whole world came to an end or it felt to me because it had a big conference room, a kitchen, bathrooms and little office cubicles.
It felt to me like it could have been political or someone high up in the security of the government stayed there because they had these big TV screens all around the room of different time zones around the world. The owner of the house was not that guy. From his background that I knew, he wasn’t in that world but it felt very secretive or private, but it was bizarre to see.
That is strange. What was his background? What was he doing? Do you know?
Yeah. He had a mixture of internet things and real estate. He was an entrepreneur. He reminded me that I showed him a house many years ago and it was a house in Truesdale. It was at that time maybe $4 or $5 million. I put two and two together, but this made quite the statement and it’s all yours for $64 million.
Two things keep coming to mind. One is when I was new in the business. I was nineteen years old and I worked in the Valley. We went out to the west side to see a house. It was $150,000 or $200,000, which was unbelievable. It turned out that the house was the house in the movie The Mechanic that Charles Bronson and Jan-Michael Vincent starred in. It was a sick house, and it was cool. It had a tunnel that led to a hidden guest house, and the guy that had built the house was a guy named Hal Hayes that stole tons of money from freeway construction to build this house. Ultimately, he was caught in the tunnel. I had this other house I was selling.
Where did the tunnel go? Where did it end?
It went to a hidden guest house. If you want to see what the house looks like, watch the original The Mechanic with Charles Bronson. It was really interesting. It almost looked like the Soho House, the one on Sunset. I have this other one with another hidden tunnel. It’s weird why these people had hidden tunnels. This guy built a house, which was amazing, and it had a hidden tunnel that was all lined with bricks from Leeds of London. The money was no object when he built this house. It went to this guest house. Some people just had money to burn. At least that Hal Hayes guy had a purpose for doing the hidden tunnel. It was an escape hatch which didn’t work.
I had this bizarre experience, which I didn’t know was going to be bizarre many years ago. I had a friend of mine that had their second child. They wanted a larger home in the Hills but they had to have a three-car garage and their budget was about $3.2 million or $3.5 million. It’s hard to get a 3 or 4-car garage in the Hills when you’re on that budget.
You’ll never know what you’ll run into. That’s the thing that makes the real estate business interesting and sometimes a little bit sketchy and frightening.You get a carport with that. We did find one. We found one with a three-car garage and I was like, “Thank God.” I’m there for the inspections and I meet the contractor thinking, “Because the house was deadbeat and I’m updating.” It was probably from the ’70s or ’80s and it was dated, but the contractor didn’t want to look around inside the house. He only wanted to see the garage. I thought, “That’s really weird.” We went to the garage and walked around. He was measuring away and I was watching him. It’s a garage with two doors on it.
We go to close and I meet the buyers who are my friends. Their money comes from what used to be a 900 number business. I never knew how that worked. I didn’t ask for the details. It didn’t matter. They had enough money to buy, so that was that. I go to give them the keys at the house and the contractor pulls up with a big truck. Inside the truck, the guy starts unloading these telephone booths. There must’ve been 10 or 12 of them already pre-made that they put in the garage and they put in place. I was watching that thinking and they go, “It’s just going to be our home office.”
Wasn’t it legit telephone booths versus telephone across the top?
It looked like a booth with a little table and a little seat inside. It was an all-white little booth. I didn’t think anything of it. I thought, “Maybe that’s how they do their business.” Seven or eight months later, I went there to go for dinner. I was a little bit early. I was sitting below on the garage, and I saw these ladies not dressed very nicely, and I’m in a cocktail dress coming out the door. They’re in sweats, grubby hair and looking grubby, and I’m thinking, “Maybe they let them go to work that way because they’re working in their garage.” I didn’t think anything of that either.
A few years later, they were pregnant with their third child. They needed a bigger house so we went to sell this one. I go into the garage and I see phone booths this way and that way, a conference table in the middle and they had this soundproof padding. I came to find out that it was a 1-900 sex line. There were ladies that worked in the booths that people would call up and I guess you got charged for those calls. They would talk sex to them on the phone.
You always picture them as these beautiful women.
They probably have incredible voices. I have no idea. I’d probably charge you $5 a minute. Who knows because they were buying a $3 or $4 million house owning a 900 business, but that was an interesting and unique experience.
That is really bizarre. I’ve had some interesting rooms. One time, I was selling this guy’s house. He called me in and he was building a Shelby inside the living room. I was thinking, “That’s pretty cool, but how are you going to get that out of here?” He didn’t think that far ahead. I was like, “You’d have to knock down a wall to get rid of it.”
The rooms that I found were big surprises and this happened more than once. If they were safe rooms that were hidden away. Sellers are going to say, “I got a safe room and I can tell you where it is but we’re not going to show the buyer until we close escrow. On one vacant property, during the inspection, we bumped into this wall and it opened up. It was a full Kevlar-lined safe from the satellite.” One place I sold up on Tigertail has a safe but it was too sketchy. I didn’t even want to go in there because it was a giant safe like in Fort Knox thing, where you had to spin the wheels. I got claustrophobic by going in there.
One time, there was this really weird room I had. This guy was renting the house. It was up in Lago Vista. I’ll never forget this. We’ve talked about giant trophy animals that have been stuffed and this stuff was weird. This guy was renting a house at Lago Vista owned by this Japanese guy years ago. He had all these tusks and stuffed animals because he was a big hunter.
I got to be friendly with the guy. He was showing the house and was cool about showing it, even though he was the tenant and he goes, “I want to show you something.” He goes to this wall. I forgot if he pressed a button or switch or pulled a book out, but this whole wall opened up and it was this giant closet that he had built as the tenant. It had an armory like out of some movie or a SEAL team. He had these MP5s. It was incredible. He was all proud. I go, “That’s really cool. Every weapon in there is practically illegal.” You never know. That’s the thing that makes this business interesting and sometimes a little bit sketchy and frightening.
I remember a house in Beverly Park and maybe you saw this one. They had a beautiful library with a desk. It was beautifully done. There was a panel wall and behind it was an escape so that if he had his girlfriend there, he could send her out the door. I’m like, “I see.”
That’s thinking ahead. What if the wife saw the door?
I didn’t ask. Often see crazy things, we have to zip it and keep our mouths shut. We have to not overreact, not react and not question it. I just nod my head and go.
I had to deal with this attorney one time and it was a really big deal. The guy was a full-on smoker. People were smoking indoors. If I was at a restaurant where the people were smoking, I’d have one of those little battery fans and blow the stuff away from me, but I had to go to this guy’s office to work on this deal.
The receptionist brought me to the office and it was ridiculous. To try and find the guy was almost impossible. He was chimneying nonstop. Normally, I would just go with it because I don’t want to insult anybody, but I said, “Can we go someplace where there’s some oxygen?” The stuff that we have to do sometimes because you got to be politically correct or whatever they want to do, is pretty cool, but I’ll never forget that. There is no way I could be in the room and survive.
I thought that was smoking pot. I remember a couple of brothers that I had up on Doheny. I go there, and they would be taken away on their pot while playing games in front of the TV and this could be 10:30 AM. I’m like, “We have a showing in five minutes.”
This goes away from the construction thing a bit. We’ve talked not only between ourselves but with the guests about the people that are bogus. For whatever reason, they haven’t got the money, they don’t want to spend the money or they’re doing something. There’s the flip side of that because I know you’ve dealt with this. I certainly have, where you make the assumption that someone isn’t real for whatever reason. There are two things I can remember because the people were laughing a lot.
One guy called me once from England and he said his name was Mr. Williams. He was calling about this really cool property that I had listed. He was laughing and it sounded weird. I figured the guy was bogus, but he was nice. He said, “I need my security guy to come to look at the house. I don’t want to have a house in the United States, but my wife is American and she has cancer.”
She wants to get a house. I go, “Okay.” The security guy was not only completely legit and went through every part of the property, but he said, “Do you know who the buyer is?” I go, “It’s some guy named Mr. Williams.” He goes, “No. He is the nephew of the ruler of Pakistan and he’s legit,” and I wasn’t taking the guy seriously.
The other thing was not that long ago. This guy has called me and he has turned out to be not only a great client but a friend. He’s super cool. The guy called me and this is during COVID. He goes, “I know who you are. I don’t want to share a hallway, elevator or pool or anything.” He was renting in the Ten Thousand building in Century City. He said, “Find me a house. I don’t even need to look at it. Something that you think that you can sell me anywhere between $10 million and $30 million that you think is a good deal and then I’ll buy it. That if you could sell in a couple of years the profit that’d be great.”
Before Google, we wasted a lot of time with people that were not real because it was impossible to really check them out. Now, we can check people out beforehand to see if they show up.I thought, “This is bogus.” It happened at night when I was done answering my phone. I forgot about it, but then I sent him some stuff and he got back to me. I Googled him and the guy runs a bunch of companies. He is super cool and I sold him a house. You’d never know. People go, “Why do you waste time with this guy if he is bogus?” You got to give him a little bit of rope because we don’t know.
Both you and I know this. The interesting thing is, before Google, we wasted a lot of time with people that were not real because it was impossible to check them out. You had to almost go on based on what information they told you. It’s short of saying, “Show me your bank statement,” which none of us did.
I wasted probably a lot of time, but now that we have our little friend Google, we can check people out beforehand to see if they show up or ask them a few questions to see if it matches who they are. Except for those clever ones that tell you, “You can’t find me because I’m so private. I purposely don’t have myself on Google.” If you have a driver’s license, you’re likely on Google somewhere.
I find something that’s pretty intriguing, especially in dealing with overseas clients. It’s that sometimes, you can’t get that much information about them, but what I’ll do is I will question their agent and say, “How well do you know this person?” If you think it’s bogus and the agent goes, “They called me on Zillow,” they’re fake. They’ve got the zero point, but if they say, “I know the family and I’ve done other deals with them,” you have to go with that.
Generally, it’s not just Google. I have someone that does deep research and we have data miners, so we can check people out, but still, it can be faked out. You can pretty much Google about anybody and find out something. A lot of times, it’s negative. What’s key is how you search for them too. Sometimes, I’ll search for their name and then add fraud. That happened not that long ago. This guy makes an offer. It was a $40 million offer and he had a letter of credit. I Googled his name plus fraud. His name didn’t come up on fraud, but it came up on some international site where the bank he was doing was like a fraudulent thing. I will add other search parameters like fraud or bogus.
Before Googling everybody and all that became the way to go, I remember that if it was an agent we knew, we would trust in that relationship that they knew what they were doing because the newer agents don’t ask the questions. Now, we just go to Google, so we don’t have to deal with either one. Many leads and a lot of people do come through the internet. Don’t forget that there was that big sale this past year from a Zillow lead that was $80 million in Bel-Air. That was a cold lead from Zillow, which is bizarre, but it can happen.
I’ve had good and solid agents present me their buyer that I can tell is bogus and I’ll say, “This person is not real,” and they go, “There’s a chance they are.” I go, “They’re not and here’s why.” I’ll ask them, “Have you done anything with them?” They’ll say, “I haven’t yet.” You feel bad because you don’t want to insult anybody, but by the same token, you threw your own credibility with your seller if you start bringing people in that for sure don’t have any money.
Now, even sellers are onto it. They want to know the names so they can Google them. I have one seller and he sold his house in Beverly Hills. Before we could even show the house, he was going to Google the buyer to make sure they didn’t have any lawsuits. He had to do that.
I’ve done searches on people for litigation. I have one good client of mine. He is a super smart guy and he has held all of his properties in overseas companies. It was usually in the Isle of Man. I asked him a long time ago, “Why do you do that?” He goes, “I’m CEO of this major company and I’m constantly getting sued. I have things in these companies that they find some ways to sue.”
I had another guy and we were selling the property for $6 million, but he owed $25 million on it. I go, “How the hell is this possible?” He over-encumbered it so much that no one could ever sue him. If someone has a ton of litigation or if you can see they are being sued for fraud, then that’s pretty much of a red flag.
I was talking about houses that have more debt on them than what they’re worth. The debt on the Hearst estate was over $60 million.
How much did it sell then?
It was $63 million, I believe. There was that one up in the top of Truesdale. They had $55 million of debt against it. It was a developer who you know. I brought them an offer and I think it was $58 million. It was off and on the market for 4 or 5 years and I didn’t take it. They ended up selling it to the guy who held the debt.
That is a common thing. That’s what’s going on in big properties. What’s strange is that people are smart, especially if it’s in something other than real estate, they will often put a ridiculous amount of money into something. There’s no real exit strategy, but that’s where you see the phenomenon that you’re talking about where something sells for way less than it’s owed. In California, it’s an anti-deficiency state, so you can take the house. In other states, it can be a different story. It’s either personal.
They can come after you for the difference personally, and then the taxes on the money and the whole thing. It’s not that we’re lawyers or anything.
We run into that all the time. I’ll sometimes write emails and some people will go, “Are you an attorney?” I go, “No,” because they say I write like an attorney. I represent tons of attorneys and I deal with attorneys all the time. You learn the lingo.
I love doing this with you and I love the fact that our audience is tuning in and we’re getting some really great interest in this show.
A lot of my clients and friends send me texts and say, “You got to tell the story about this,” and I go, “I can’t talk about that.” “Yes, you can. Just change the name.” I go, “No. The person’s going to figure out who it is.” We give a lot of information and it’s truthful, but it is funny how people weigh in and go, “You got to tell this story.” Are you getting that? Are people saying that and coming up to you?
Yeah, but there are some where you can’t go there, but we’ve gone there pretty well and deep often. Every week, it’s great. I hope you keep tuning in and go to RealEstateRealLaughs.com. Send us a story, and maybe you’ll be the next guest on our show. We look forward to having you on our next episode.