Little House In Dickinson
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It was 1987. I had just completed a rather large multiple leg exchange involving 54 properties in 4 states and over 200 recordings. My client in the exchange was a lending institution based in Bismarck, North Dakota.
Upon completion of the exchange, the institution granted to me and my partner a credit line for use in purchasing other properties from the lender as they became available. The Chairman of the Board, and President of the institution, asked me if we were interested in a vacant lot in the City of Dickinson, North Dakota. The Price was $2,200. I responded yes.
On my next trip to Dickinson, I asked for directions to the lot. The Chairman of The Board said, “I will meet you there. Let’s have lunch and I will show it to you.”
I said, “OK.”
He took me to the lot; however, we could not find a vacant lot at the address given — there was a house at that address. He contacted his people in Bismarck, and they apologized that the house had not been demolished yet. The house looked pretty good to me and I could not understand why it would be demolished. So I told him we would take it “As Is” and we would demolish it if needed. He said, “OK” and a deed was sent and recorded.
We later found that they had foreclosed on a $34,000 mortgage and the house had been appraised for $50,000. However, the institution had just put a new F/A heating system in the house at a cost of $2,200 and they wanted to recoup the expenditure. They said the market was flat and the house not salable so rather than to maintain it, it would be demolished.
We cleaned the house up and rented it for $175/month and another $25/month for the garage. We then went to an NCE meeting and heard a presentation in which a fine art dealer wanted to exchange some of his excess inventory for real estate. We offered the house for Art at 50% of wholesale value. The offer was accepted. We then traveled to Beverly Hills to pick out the art, and we found that he had a large inventory of art by modern-day masters, including Picasso, Miro, Chagall, and Dali. We left with a car full of art. We asked, “Who do we make the deed to?”
The art dealer responded, “Just hold off on the deed, I will tell you.” A month or two went by, and we again inquired about the deed, and he gave us the same answer. Three or four more months went by and again we got the same answer. Then a year went by with the same response from the art dealer. Finally, we could not find the art dealer at all and were getting really concerned. What to do?
Well, my partner having his J.D. “Law Degree” decided to put out a demand stating that if he did not accept the deed we would retain title to the house as “liquidated damages,” and he never responded.
A year went by and we were still receiving rent and placing it in trust for him. Another demand letter went out stating that we were enforcing our rights as Liquidated Damages and intended to sell the house.
Again there was no response, and at the time the news was reporting art fraud with a lot of copies in the market that were not real. So I decided to contact the appraiser who was mentioned in the news as the authority who could authenticate or determine if the art was a copy. My partner did not think that was a good idea. The appraiser came to my home, and it turned out that in his opinion the pieces were real and two were originals: a Picasso and a Miro.
The market in Dickinson became active and we sold the house. A few years later the art dealer contacted me and apologized, with no explanation for his actions or lack thereof, and he said he liked doing business with us and wanted me to represent him.
End of story — I did not represent him, never knew why it happened, and still have the artwork!
