Early one Monday morning a good friend of mine stopped by my office in New Martinsville, WV. He had just returned from a week vacation on South Carolina's Grand Strand, Myrtle Beach. West Virginia's favorite vacation mecca.
These visits to my office were a regular weekly event, but this one was different. This time he had visualized something in the last week that was going to open financial rewards beyond our belief. The year was 1983 and he had discovered that this little slice of heaven on Earth in the Palmetto State "was exploding with growth and development" This was something that we had to be a part of, it was the "mother lode"
really there now? His answer "an oceanfront hotel"
"A hotel, what the hell do we know about hotels?" I asked.
"What is there to know? You check people in and take their money, he informed me"
Both of us still being in our thirties and not knowing the meaning of the word fear, nor did we know what the meaning of doing business in a resort town like Myrtle Beach was, we booked a flight to Myrtle Beach to search for our fortune on the Grand Strand.
During this era there was a popular real estate investment tool called Limited Partnerships. Simply, how LPs worked were investors could invest in a portion of a large real estate package with a potential large upside profit with tax benefits and the project would be managed by the General Partner who would get a small share of the deal and an ongoing management fee.
We created a South Carolina corporation, Ocean Properties Management to be the General Partner. OPM for short, which the two of us knew was really meant to stand for Other People"s Money.
In true form to our self known magnificence and business aptitude any trips that we made on this venture required us to rent luxury cars and smoke expensive cigars while canvassing properties. Which I am sure was much less impressive to prospective sellers than it was to the two of us.
We retained the services of a commercial real estate broker there that specialized in hotels and motels,
Bob Coker.
Bob was a native of nearby Conway, South Carolina and he never slept. We could receive telephone calls from him at 1:00 am, 6:00 am, made no difference if there was a hot deal Coker was not shy about letting us know. This was also the year that he earned the distinction of being the number one top biller for Century 21, not just in Myrtle Beach, or the United States but in the entire World. This guy made Zig Ziglar look like a piker.
On our numerous trips from West Virginia to South Carolina to inspect potential properties to purchase we looked at motels and hotels of all sizes in all parts of the beach. It seemed almost any hotel that we might want was for sale. We also learned that very few of the buildings included the land upon which they were built, the land was leased and in many cases already had three or four mortgages on them.
Even for the two of us at the time that were blind with the confidence of our exceptional business and marketing prowess felt this might be an indicator of problems. In expressing this concern to Coker he said we were missing the "Magic" and that he would pick us up the next day to show us the "magic" that assured success.
Somehow, apparently Coker had determined that his clients were a couple of marks or pigeons from the North that he was going to be able to dazzle with trickery.
We agree to join him for breakfast at a local restaurant between Conway and Myrtle on Route 501 and then afterwards to go discover the Magic. After a southern breakfast with biscuits, grits, eggs and country ham we join Coker in his car and drive down to Ocean Boulevard where he pulls straight into an oceanfront hotel parking lot facing the beach. "this is it" he says, we say "is what?" Coker says "the Magic, this is the magic. The Ocean is the Magic, each foot of that beach down there is selling for five thousand dollars and that is what you are buying boys, Magic. You can't go wrong with anything you buy here"
After that inspiration, numerous trips, due diligence, and dozens of cigars we decide we are going to purchase the Ocean Reef (pictured above how it looks today, not then) it was a high rise, oceanfront, in a central downtown location and the real selling point was it had an oceanfront penthouse that was well suited for General Partners housing. The Ocean Reef was owned by Bhoupa "Boopie" Patel, who owned several properties in town. He was selling in order to invest in condominium construction which was a new idea at the time, that we felt would probably not catch on.
We meet with Patel and made an offer of 1.75 million which was less than the 2 million he wanted, Coker felt sure he could convince him to take the offer. At this point in the negotiation I should point out we had raised no partnership money, we had opened a bank account in the corporate name though and had a $100 balance. Patel held firm in his price.
Meanwhile we had learned of several radio stations there that were for sale, both of us knowing something about radio and me thinking at the time that there was no such thing as a bad radio station just bad management. when you coupled that with the Myrtle Beach "magic" to which we had been introduced, perhaps it was an omen that if we could not get our hotel, that we should buy a radio station. Then while we are cranking in the huge profit from that we could wait for the right hotel property to become available.
WMYB AM. Myrtle Beach's original radio station was purchased by the Corporation. The operation and story of this includes humor, intrigue, sex, several deaths and learning lessons never to be forgotten, but that is a story for the next essay as the Magic continued.
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