Sramana Mitra: How long did this go on? How many years did you run this?
Jeff Frieden: From 1980 to 1983. We once hired an auctioneer to come in one day for an auction of these televisions that we had in containers sitting out in the parking lot. We actually sold more merchandise in that one day than we did in a week or two. We were really fascinated by the auction business. Then in 1983, we sold that business.
Rob, my partner, went off to Auction School, which is in Billings, Montana. We had made quite a bit of money for our age. We saw an ad in the LA Times for a land auction at the LA Convention Center. We went up to LA and sat through that auction. We wrote down the prices of the 200 pieces of land that were mostly in California. We took that and went off to the county recorders. Today, all this is available online.
We went out to the Riverside county recorder and said, “We sold that for $20,000. We could see what he paid. He paid $10,000 for that.” So we took all of our money we had made in the stereo business and went out and went on a quest to buy our own 200 parcels of land. It took us several years to buy 200 parcels of land. In 1986, we had our own land auction at the Orange DoubleTree Hotel where 1,000 people showed up. We ran a bunch of full page ads in the LA Times and had radio commercials.
Sramana Mitra: Can you give me a ballpark on what kind of scale we are talking? What was the price of land that you were buying at? How did you finance these lands? I imagine that you didn’t make enough money to buy that much land, right?
Jeff Frieden: This is 1983 to 1985. Back then, there were still oranges in Orange County and no one really lived out in Riverside and San Bernardino. These pieces of land would cost from $1,000 to $20,000. We had no financing. I believe we invested probably about $1.5 million in these 200 pieces of land.
Sramana Mitra: That million and a half was from the sale of your first company?
Jeff Frieden: For whatever we had earned in the first business and the sale. That was almost all of my money, by the way. I was 23. I had a million dollars in the bank and I had a house that I had bought.