Chapter 5
His company was known as I. C. Deal Investments, but everyone throughout the burgeoning Dallas real estate industry knew and respected him simply as Irv Deal. He was, he said, nothing more than a good businessman who had long ago manufactured the foundation for his success while still in college – going from door to door and selling pots and pans for Alcoa. He sold so many of them that the company finally decided to let him go. Goodbye. Good luck. Irv Deal was, officials feared, making more money on commission fees than the president earned by running the company.
Deal ran a tight ship. He had a reputation for hiring the right people and making the right decisions. He kept a hard, unflinching eye on the devil that was in the details, as well as on the money coming in and going out, making sure the bottom line never varied or wavered from the financial game plan he had established for each of his projects.
He was never known as a tyrant, but Irv Deal did maintain dictatorial control over every aspect, large or small, of his investment firm. He depended on his own ability as a real estate developer and never bothered himself with any sudden swings or shifts in an unpredictable economic climate. Thus far, the economic winds had always blown in a favorable direction.
It was all about to change.
As far as Irv Deal was concerned, raw land was simply an over-priced commodity necessary for building apartment buildings. Dallas was his base of operation, and he built as many as ten thousand units throughout the sprawling Metroplex. But his influence and his holdings, during the mid-1960s, ranged from coast to coast, with apartments rising up alongside the streets of America’s most prominent cities from San Francisco to Tampa by way of Lake Tahoe. His I. C. Deal Investments had become universally recognized as the second or third largest apartment builder in the United States, depending on whichever report happened to be the latest to hit his desk.
For years, Irv Deal remained firmly entrenched as a major player who had found his niche and parlayed it into a small, or large, fortune, depending on whether he was talking to his tax man or his banker. Irv Deal preferred working from behind a desk and on the telephone. He was smooth. He was eloquent. He possessed a boyish charm and the reassuring style of a businessman who had figured all of the angles and knew how to turn pennies into dollars, great amounts of them.
He liked to make deals, and he was good at it. In one shrewd market-changing venture, he sold sixty-five hundred apartment units to the Great Southwest Corporation for twenty million dollars. For Irv Deal, it was indeed the best of times. The worst of times, however, was swiftly approaching, and it would catch him long before he realized that sudden and unexpected economic erosion was on the way.
Those prolific, fruitful years in real estate were just about as tempting and as seductive as a fashionable, beautiful woman on some other man’s arm, and just about as unpredictable. The good times had rolled in with minks and limousines and settled down around Dallas for good. No one doubted it, and no end lay in sight. There was plenty of raw land, and land begat money, and money begat fortunes, and fortunes begat Dallas. The power was intoxicating.
One morning, the elixir that had been so intoxicating left a bad taste and a hell of a hangover. Dallas Real Estate awoke and discovered that, virtually over-night, the good times had all loaded up and gone. No one had seen them slip out of town. A grand and glorious market had passed away sometime in its sleep, and not everyone at the funeral would be a pallbearer. So many had turned in that night as rich men and women. They opened their eyes and felt the shackles of debt draping heavily around their shoulders. It had been daylight for such a brief time. Then darkness. Pure, unadulterated darkness.
Real estate magnates called it building ahead of demand, but their crime had been to dramatically overbuild North Dallas and suddenly discover that banks no longer had construction loans to pass around. Interest rates were on the rise, and speculators were caught in a deadly financial trap, paying fourteen percent interest, and sometimes more, for property on which they were unable to build. Raw land became raw again. Dollar signs had faded from the fields of splintered promises. Boom to bust, riches to rags, power to poverty, good fortune to good riddance. The game of speculative real estate was simple. Buy land and flip it before they had to pay for it, and they all kept flipping it back and forth. Each time the price grew greater, and the odds went up. Whoever got caught with the final flip of the land last lost. A lot of men lost.
Irv Deal had been devastated by the sudden downturn of the real estate market. His world had crumbled around him, and the loss hit his personal life harder than his business life. He could ride out a slump. He had done it before. But real estate in Dallas had unexpectedly turned south, then exploded in his face, and left him trying to develop luxury apartment complexes and shopping centers when the buyers had all left the sellers grimly holding their “For Sale” signs. The ashes and debt were suffocating.
Money always had a curious way of finding Irv Deal. Money, he knew, wasn’t out looking for him anymore. Money had dried up and left him scrambling for one more roll with somebody else’s dice. His only salvation, he decided, would be to find another business where he could invest the funds he still had tucked away in the bank and crawl back to profitability again.
Irv Deal was standing at a financial crossroads filled with potholes and lined with detour signs, financial cul-de-sacs, and dead ends. What’s next? he wondered. He had no idea. But for a man who had mastered the science of running a sound and profitable business, something would turn up. It always did.
During Christmas of 1974, Irv Deal, with time on his hands and nothing better to do, wandered up to a holiday party hosted by Frank West. He ran across Pat Holloway, an attorney who ran with fast company and owned, or at least handled, the legal work for drilling funds. Deal and Holloway had been friends for years.
Well, they may not have been close friends, but they knew each other well enough to discuss the ups and downs of a business market gone awry.
Deal looked the way he felt, forlorn and downcast. What’s worst, he was standing around and drinking far too much, and he was drinking alone, a sad predicament, which, throughout the Dallas business community, was generally frowned upon and regarded as an unforgivable sin. In Dallas, when players got together for any occasion, the broke supped from the same cup as the rich, and it was virtually impossible to determine who had received their next check and who had written his last one, who had chicken and who was left with the feathers.
Holloway strode across the room. He was charismatic and had a commanding presence, especially at a social gathering. “What’s wrong?” Holloway asked.
“The real estate business is just terrible,” Deal answered, his shoulders slumped, his face shaded by the dim lights in the room. “I’m going broke,” he said. “The business is out there dying and taking us down with it. I’m not sure I’ll be able to hang on much longer.”
“Real estate will bounce back,” Holloway said.
“Maybe. Maybe not.”
“It always does.”
“I don’t want to wait for it,” Deal replied. “It looks to me like the oil business is the place where I need to be. The price is going up on a regular basis. There seems to be a lot of money to be made, and the rewards far outweigh the risks. I need to get myself in the oil business, Pat. It’s as simple as that. The trouble is, I don’t know how to get there. You run drilling funds. You’re on the inside of the oil business. Tell me. How’s the best way for me to become a player in the oil business?”
Holloway had no intention of encouraging a man down on his luck and looking for the next big play. It bordered on being criminal. A man like that was grasping for straws