Chapter 8: Mansion
"While you were napping, I also realized that if I set up a business in the Caymans to buy your companies, it would be virtually impossible for me to manage the business from Pueblo. The only thing keeping me here is you. So if you are seriously thinking of moving to the Caymans, I would be more than willing to go with you."
"All right, Paul. Let's make plans to move to the Caymans as soon as possible. The first thing we will need to do, is for you to set up your business. I wouldn't mind going with you for we could start looking for a place to live. Do you have anything in mind for a house to buy?"
"No, I hadn't gotten that far in my thinking. Something about the size of this place would be good. I would like to be reasonably close to a large town like George Town, but I don't want to live in the city. A place with easy access to a beach might be nice."
"Paul, you need to stop thinking of yourself as a poor man, and start thinking about what your future position in the Cayman Islands' society will be.
"Your company will own businesses that are each worth millions, and that will be just the start of your business empire. You will become a powerful man in the Caymans. You also have money in your numbered account and you should invest it through your company. You can invest in real estate and you can buy more businesses. However, you will need to wait until the new business is stable and you have a firm grasp on all of my companies before you start expanding. Too rapid of a growth, is a bad thing for a business. The growth rate needs to be planned and controlled. That is what Hans and I learned, although that doesn't mean the growth rate has to be slow.
"When you become one of the Cayman's more important residents, it may be advisable for you to become a citizen of the Cayman Islands."
"I'm not sure if giving up my US citizenship is something I want to do, Elsa."
"I didn't say you had to give up your US citizenship. It may be possible for you to have dual citizenship like Hans and I did."
"That hadn't occurred to me, and if it is possible, I will have to give the idea some serious consideration. What type of house do you think we need to buy?"
"I'm thinking of a small mansion. Hans and I were doing our best to keep a low profile here in the US when we bought our house, and living in a small house helped to keep us from being noticed. This house was adequate for us and we loved it. However, you are going to be in a very different situation. Keep in mind that I'm not going to be around much longer, so you need to buy what you will need for the future.
"You will need a home suitable for entertaining your business associates. I know you have expressed a disdain for high society in the past, but I suspect you will be involved in the Cayman's social set to some extent. It seems to go hand-in-glove with wealth.
"It will be very evident to everyone that you are a wealthy man. Wealthy people typically need bodyguards and a higher level of security than an average person. Your home may need a sophisticated security system, which means you may need security guards continuously monitoring the system and the grounds. You may even need bodyguards.
You and I aren't going to be able to take care of a mansion, so you will need a household staff. I'm thinking of a cook, gardener, and a couple of maids. You may possibly need a chauffeur. You will need to think about whether you want your staff living with you. Personally, I don't care for live-in servants, but in your home they may be necessary.
"I suspect that the women who visit and live on the island will target you as a potential husband. I expect that you will find the right woman for yourself within a couple of years and marry her. The two of you will also want children.
"All of this means you will need a very large home, which is why I suggested a small mansion. It is just a matter of finding the right mansion. If necessary, you may have to build a place that meets your needs."
"I can see most of that being valid, Elsa. Especially a household staff, if we get a large place. A wife and kids are in my plans at some point, but I think it will take more than a couple of years before I'm ready for marriage. I'm going to be very busy with my new business.
"Setting up the business will be more important at this point than finding a house, but if you want, we can start looking around for a house during our trip.
"The businesses I visited are in the fields of computer hardware and software, oil exploration, trucking and shipping, textiles, a fishing fleet, and a seafood distribution center. I see the businesses falling into four categories with a division to manage each category: technology, transportation, oil, and fishing ... although seafood may be a better title than fishing. During our tour of your US businesses, I didn't get a sense that the textile company really fit into your business empire. Did you and Hans buy it out of sentimentality, since that was the business your families were in before the war?"
"It's possible, but I never thought of that as our reason. I know Hans and I were always comfortable with the business, and it made a good profit for us at first. I'm afraid that the textile industry in New England is coming to an end. Lately the company's profits have been declining and many of our local competitors have gone out of business. I have reached the point where I will have to make a decision to sell the company while I still have a chance of a profit, or I will need to retool the plant, so it would be competitive with the overseas textile companies and those located in the south. I'm still not sure which would be the best option."
"It sounds to me like textile manufacturing in the New England area is a dying business. If that is true, it would probably be best to sell the company. However, I know very little about the textile business. If retooling the plant would extend its profitable life span significantly, then that may be a good way to go. I'll leave it up to you to decide. I can keep the plant as a fifth category and learn the industry, or at least put an expert in charge of a fifth division. If I do that, then investing in the textile business in other parts of the country may be a good move. Let's just think about it for now.
"So my company will have to have four, and possibly five, divisions to manage your companies. I will also need a Division, or several groups, to handle the administrative, financial, legal, and other needs of the company.
"In addition to creating the legal structure of the company, I will need an office building and a few key people to begin staffing the company. I think it will take close to four to six months to create the company, find an office building, find a Chief Operating Officer, and hire people for the legal and contracts groups with support people. That is the minimum that will be needed before I will be in a position to buy your companies, but with the right COO, it might take less time than I think to accomplish all of that. Once we are in the negotiation phase of the sale, we can begin to set up the rest of the company's structure."
"Will we need to be in the Caymans for four or five months, Paul?"
"No. What I'm thinking of is, I'll find a lawyer to incorporate the company, a COO to run the business, and a business lawyer to take care of the company's legal affairs. Once that is done, I can talk with them about what I want done. We can go home while they take care of the work. I can consult with them by phone, and if necessary, I can always make a quick trip back to the Caymans to take care of anything that needs my physical presence."
"Elsa, what do you think we will need to do before you sell the house and move to the Cayman Islands?"
"As far as the house goes, we need to sell the bullion and get the house ready for sale.
"For my businesses and investments, I need to sell all my stock, but I may decide to do that after the move. I want to wait and see if Sam can find a way to transfer my stock to you without me having to pay income taxes.
"For the companies I own, I want to visit each company and brief the board of directors on my plans for selling the companies. They will need to know what is happening, so they can keep their people calm. I will let them know that I plan to sell similar companies to the same buyer and I want them to create negotiating teams for each group of companies. I will also let them know that there is a company that might be interested in buying all of my companies. Once that is done and your company is ready, I'll put my companies on the market. I think you will need a negotiating team to come talk with my companies' negotiating teams. We can let our teams discuss the conditions and terms of the sale, and report back to us. I'll get involved toward the end, and I'll meet with your COO and lawyer to discuss the price and finalize the sale.
"Once the sale is finalized, I'll have Sam determine my tax bill for the year and put the house on the market. I think I'll sell it to a young couple just starting out at a very reasonable price. I'll transfer my money from my Pueblo checking account to my Cayman account, but I'll leave enough in my Pueblo account to pay my taxes.
"I thought for a moment that you were going to tell me that you intended to tell the IRS to take a long walk on a short pier."
"I wouldn't do that, Paul. It would violate my ethics. I know I can't legally avoid paying income taxes, but I can minimize my income, to pay as little as possible. If the IRS complains, I'll just tell them I have all the money I will need for the rest of my life, and if I want to sell my companies and home at less than market value, that is my business. I won't tell them, but by the time I die, I will have arranged things so there is no estate for them to tax."
"I agree with your list of things that need to be done, Elsa, except for the bullion. I think we should have your trucking and shipping companies transport it to the Caymans for us. That way we won't have to deal with it until later."
"I'm not sure that is a good idea, Paul. If someone in an official position learns about the bullion, I will need a story to explain how I came to possess that much bullion. If they inspect the bullion, the markings will mark it as war loot. I can't think of any way to explain those two things to the authorities. It would be safer for us to sell it to someone who will buy large amounts of bullion without asking questions. I don't know of a bullion buyer like that, but I do have a few acquaintances who may know of a less than honorable buyer. I think it is still a good idea to first remove the marking from the ingots of bullion."
"Would dealing with someone like that be safe? When we show up with the bullion, they could kill us and take the bullion."
"I've heard those types of stories also, Paul. I wouldn't put us in that type of situation for several reasons. First of all it wouldn't be safe for us. Secondly, there is the potential for us being blackmailed. What I'm thinking of is, my acquaintance would be a middleman. He makes the arrangements for the sale. When we reach an agreement on the price, we turn the bullion over to him. He sells it to the bullion buyer, takes a percentage of the proceeds, and gives the balance to us."
"Can you trust your acquaintance to deal with us honestly? Can he deal with the bullion buyer without being ripped off?"
"Paul, my acquaintance has the reputation of being an honest crook. He is also a very scary guy with a number of violent associates, so I don't think the bullion buyer would even think about trying to rip him off. If I make a deal with my acquaintance, he will live up to his side of the bargain. A mutual acquaintance once said that according to my acquaintance, I am a scary bitch and there was no way he would cross me. Am I a scary bitch, Paul?"
With a smile I said "Only to someone who crosses you, Elsa. Let's do it your way. I'll start preparing the bullion for sale and pack it for shipment. I will have to do that task after we return from the Caymans. I'd say you should wait until all of the bullion is ready for shipment before you contact your friend."
"I agree, but I wouldn't call him a friend."
I called my contact at my Cayman bank the next day and told him I wanted to start a business on the island through the bank. He explained that the bank consulted with and assisted their customers in their business dealings, but wasn't involved in the creation of businesses. I asked him to refer me to a lawyer who could do the legal portion of setting up the business. He gave me three names and recommended one of the three lawyers. I called the gentleman and explained what I wanted to do, and that I would like to meet with him when I got to the island. I let him know that I would set up an appointment with him once I firmed up my travel arrangements.
Elsa and I discussed our trip. She believed she would be fine if we flew straight through to the Caymans. She seemed to have a lot more energy than she had last month. I think the idea of returning to the Caymans lifted her spirits and energy.
That afternoon we booked our charter flight, and hotel rooms. The next morning, I called the lawyer and made an appointment to meet with him three days after we arrived. I felt Elsa should be involved in the meeting, and I decided she may need the extra time to rest. I also had some banking that I wanted to do before the appointment.
The trip was not as taxing on Elsa as I feared it might be. She rested the next day, while I took care of my banking. By evening, she appeared to be fully recovered. We made plans during dinner to start looking at homes to buy. One of the things I did while at the bank was to get the name and contact information of a good real estate agent. After breakfast the next morning, I called her.
"Good morning, Townsman Realty. How can I help you?"
"My name is Paul Adler and I was informed by my bank that Missus Lara Dumont could help me locate a house to buy."
"Please hold while I transfer your call to her phone, Mister Adler."
After several rings, "Good morning. Lara Dumont speaking. What can I do for you, Mister Adler?"
"Good morning, Missus Dumont. I asked my contact, Mister Castel at the Cayman National Bank, to refer me to a good real estate agent. He recommended you. If possible, do you have time for my lady friend and I to drop by your office and talk about the possibility of you acting as our agent in the purchase of a home?"
"I have an appointment to show a property to a client this morning, but I should be available after one this afternoon. Would that be convenient for you?"
"Yes, that will work for us, Missus Dumont."
"If we are going to be doing business together, call me Lara. Can you give me an idea of the type of home you want, the general location, and an approximate price range so I can find a few properties we can discuss?"
"I'm not sure exactly what I'll need, but my friend advised me to buy a small mansion. I will be forming a new business on the island and will need a home suitable for entertaining business associates. My lady friend is in good health, but quite frail, so she will need a bedroom on the ground floor. We will need a staff to maintain the house, and we may possibly want live-in staff. My friend thinks I'll marry in the next couple of years, so she advised me to plan on several rooms for children. I don't know the island, so I can't tell you where I want to live. I know I want to be close to a large town and not too far from my company's location. Price isn't a major concern, but I'm thinking of an upper limit of about five million US dollars, and please call me Paul."
"Where will you be locating your company, Paul?"
"I haven't decided that, Lara. Does your company deal in Commercial Leases?"
"Yes, we do, and if you are interested, I can help you find an office building suitable for your needs."
"That sounds good and we can discuss it further this afternoon. Bye, Lara."
"Bye, Paul."
I had the room's telephone on speaker so Elsa could listen in on the conversation.
"Paul, I think she got the idea we are lovers."
"Lovers!"
"Yes, Paul, that is what the term My Lady Friend usually means.
"Oh. Sorry, Elsa, I always think of you as my friend, and just added Lady for clarification. I didn't think about Lady Friend also meaning a sexual relationship."
"No harm, Paul. Lara is good at what she does. Did you notice how she convinced you to use her as your agent?"
"No, and you must be mistaken for I haven't made that decision."
"I know, Paul. It's an old sales technique that few customers are aware of. She told you to call her Lara if you were going to do business. You may not have realized it but when you switched to Lara, you subconsciously made the decision to use her as your agent.
"I think she will be a good agent for you, Paul. She sounded young and eager. She listened closely to what you said and connected the dots to get an opening for helping you find your office building."
"What do you mean by connected the dots?"
"She heard you make an idle comment about being here to start a business. She remembered that comment, and she knows that people who are going to start a business generally need an office, but do not have one picked out. So she asked where you would be located. That led you to ask if her company dealt in Commercial properties."
"Damn! I opened myself up and she walked right in and made herself comfortable."
"That's right, but don't worry about it for there is no harm done. She is just very good at sales. Consider it a lesson in doing business. Don't give more information to your competition than you need to, for the unnecessary information may reveal facts that you don't want your competition to know."
"I feel like a wreck, Paul. I think I'll go downstairs to the salon and have my hair and nails done, I may have enough time for a pedicure before lunch."
We arrived at the Townsman Reality office in our rental car just before we were due. When we were introduced to Lara, I was surprised. Lara was about twenty-three years old. She had an athletic physique, and a very pretty face. I envied her husband.
After introductions, Lara said, "I picked out three very different homes to get an idea of what amenities you are interested in having in your home. However, before I can talk about the homes, I need to have you fill out some paperwork."
Elsa handed me a clipboard and pen with several pages of forms, and I started filling out the forms. As I filled out the forms, I realized there had been no discussion as to whether I wanted to use Lara as my agent. Damn! Lara is good. She closed the deal without consulting me, and now I was her customer. Elsa will probably point that out later.
While I worked on the forms, Elsa asked, "Do you have children, Lara?"
"Yes, two girls. Betty and Cindy. Is your husband with you on this trip, Elsa?"
"No, Hans passed away several years ago. What's your husband's name?"
"Tom. If you don't mind me asking, Elsa, how did you come to meet Paul?'
"I was attacked in a supermarket parking lot, and Paul came to my rescue. While we waited for the police to come and take a statement, we talked. Paul had just enrolled at the local University and needed a place to live. I had a spare room that I normally leased to female college students. He seemed like a nice person so I agreed to rent my room to him on a trial basis. That was almost five years ago."
"About a year ago, Paul inherited a good deal of money and needed to travel to Switzerland to present his proof of identification and sign some papers in order to receive his inheritance. I'm from Switzerland and know the language, so Paul asked me to go with him. I agreed for I had business interests that I needed to discuss with my business manager. We both finished our business in Zurich, and I took Paul on a trip to some of the places I liked in Europe. It was becoming a little tiring for me, so we returned to Pueblo. Have you ever been to Europe?"
"No, but I hope to visit Paris someday."
"Yes, Paris is a very popular place to visit and many people believe it is a place for romance. Hans and I visited Europe frequently after we emigrated to the US. While in Paris, the locals thought we were Swiss, so they didn't treat us like they did Americans. It may just be that I am jaded when it comes to France, but I personally feel that Paris is overrated. Other than the Eiffel Tower and the Louvre, there is very little that I think is worth seeing. The French also treat most tourists who are not European very poorly and they overcharge them for everything.
"My favorite city in Europe is Wien, Austria, but you know it as Vienna. I took Paul there and we stayed for more than a week. I would like to take Paul back to Europe, but my health is declining and I don't think I would survive another trip. If you and your husband want to visit a truly wonderful city in Europe, I would recommend Wien. Have you and your husband traveled, Lara?"
"No, not really. Tom took me on a Caribbean cruise for our honeymoon, but that has been the extent of our travel."
As Elsa and Lara continued to talk, I lost interest in their conversation and kept working on the forms. I finally interrupted and said, "Lara, I don't recall everything your forms wanted me to fill in. If it is really important, I can get the information for you later."
"Truthfully, Paul, the laws governing the sale of real estate require that we vet potential buyers to ensure they can afford the homes they want to see. The information also gives us an idea of whether our buyers can finance the purchase of a specific home. Let me see what you've entered so far."
After a few moments of reviewing the forms, Lara said, "I see that you listed a price range of three to five million US dollars, no credit references other than your bank, and you indicated it would be a cash sale. I assume that you have the money in your bank to cover the purchase or will you need time to sell other property to pay for the home?"
Lara seemed a little embarrassed by her question, but I said, "I have sufficient funds in the bank to cover the cost of the home. I can have Mister Castel confirm that if needed."
"That will be adequate. What I found for you was a house about the size I think you are looking for and within your price range, a second smaller house that may be adequate, and a much larger house than what I think you will need. The price of the larger home is outside your budget, but I want you to see it so I can get a good idea of the features you want in the house you buy. If you have time to go see the homes, I can give you a description as we drive?"
I looked at Elsa and she nodded her head. "Okay, let's go."
Lara told us she would start with the small house. She described it as she drove us to the property. When we arrived, we could see that it was close to three times the size of Elsa's home. As Lara took us through the house, she asked us questions about the house's features and made notes on her pad. When we finished, she asked our opinion of the house."
I said, "I like it, but I don't think it is right for me. Elsa and I talked about what I would need in a home. One of the things she mentioned was, wealthy people need a higher level of security than an average person. I think it is evident to you that I am a wealthy person. I didn't see any security system in the house, and there doesn't seem like there is space to add a system.
"I heard you and Elsa talking about Elsa and I living together in whatever I buy. I also heard Elsa correct any misconception I may have given you about us being lovers. The bedroom locations won't provide either of us with privacy if we were to have live-in servants."
Elsa said, "Paul's right about the need for a security system and our need for privacy. This home is nice, but I don't think it is right for Paul. What are the other two homes like?"
"The largest of the three homes is the only one that has a security system and provisions for a live-in staff. I can show you that home now, and then we can tour the midsized home after that."
Elsa asked, "Why would we want to see the midsized property if it doesn't have a security system or provisions for a live-in staff?"
"The home is very nice and sits on a large lot. It wouldn't be difficult to upgrade the property to provide the features you want, and the price is significantly less than the larger property."
I said, "Let's start with the larger property, and then we can tour the other house."
As we drove, Lara again briefed us on the larger home's features. She ended the briefing by telling us the prior owner, Tandra Ogden, had passed away eighteen months ago, and the house had been on the market for fifteen months. The property was listed at six million Cayman Island dollars (KYD), or about seven million US dollars. To her knowledge, there had been no offer made by a serious buyer. She told us that the property was overdue for a reduction in price. I was impressed by her ability to keep all of the features and details of three different homes in her head and separate from each other without constantly referring to the respective property sheet's description.
I had to agree that the larger home certainly qualified as a mansion, and at a little over seven million US dollars it should be. I had stipulated a maximum price of five million US dollars, but Lara did say that she was showing it to us for its features, and didn't think I would be interested is purchasing the property. When my folks bought their home, my dad told me that showing a customer a home outside their stated budget was a common tactic of real estate agents. He said customers would frequently try to stretch their budgets in order to buy something they really liked.
The property was about a half mile from the beach and the house was situated on a high rise, which was toward the front of its twelve-acre lot. I asked about flooding during a hurricane. Lara said that during a really strong hurricane the storm surge and waves had reached the property, but they went around the hill, and never came close to the house.
The horseshoe driveway leading to the front of the house was impressive. The house had three sections facing the ocean with the center section being a two-story structure. Lara said it had over ten thousand square feet of living space in the main house. When I gave her a quizzical look, she reminded me that there were three outbuildings. One of those was a small apartment building with apartments for live-in staff. A second building was a five-car garage with a workshop in the rear half of the building. The third building was a stable for horses with a small corral at the rear. She told me that the owner had been a horse lover, and she used to ride her horses up and down the beach.
I did a slow turn looking at the house, beach, and surrounding area before we went into the house. I liked what I saw of the surrounding area. Inside the house things were even better. It looked as if the home had been decorated by a professional decorator. Lara told us the owner had been a very well-known interior decorator with customers from around the world.
The living room was immense. There was a formal dining room just off a professional kitchen. As we moved toward the rear of the house, Lara pointed out the owner's office space, which had numerous shelves for books and a built-in wet bar. The rear of the house formed a recreational room with two rooms, one in each of the house's rear corners. One room was set up as the security system's control room. Lara called the second room the Majordomo's Office where all of the employment, household accounting, and other records were kept. The recreational area opened up onto a large patio with a swimming pool and a hot tub; there was also a built-in barbecue off to the side. The upstairs area included a storage room and four large bedrooms and each bedroom had its own large bathroom. When Elsa asked about the furniture in the house, Lara said the estate was selling the house with the furniture.
The section to the left of the center section included four large bedrooms and each had its own bathroom. Lara said it was referred to as the Guest Wing. The right section included the master bedroom, a sitting room, and a den. It was called the Owner's Wing.
Elsa said, "Lara, I've had it for now. Paul and I need to go back to the hotel so I can rest. Can we meet again in a couple of days?"
"Certainly, Elsa. Let me lock up, and we can head back."
I helped Elsa to the car. Once we settled into our rental car and we were headed back to the hotel, Elsa's exhaustion seemed to fade away.
"Are you okay, Elsa?"
"I'm fine, Paul. I just had to get you away from Lara so we could talk."
"Okay, what do you want to talk about?"
"Did you notice that Lara didn't have any photographs of her husband or kids on her desk?"
"No, but is that important. Maybe she just doesn't keep personal mementos in her office."
"She does for she had a photograph of an elderly couple on her desk. I asked if they were her parents, and she said they were. I also noticed a number of small personal items on her desk. Why do you think she didn't have photographs of her husband and kids on the desk?"
"I don't know. Why?"
"Paul, her figure is not that of a woman who has had two children. I don't think she is married or that she has children. As we toured the two homes, I watched her. She did a good job of hiding it, but she displayed the common signs of a woman checking out a man as a possible mate. Remember, Paul, I said the women on the island would pursue you. Well, I think she is the first to be interested in you.
"I also wanted to talk with you about that house without her around to hear us. What was your impression of the house?
"I liked it a lot, but it is way more than I need now or in the future."
"I agree that it is a very nice place, and it is more than you need right now. However, in many ways it is exactly what you will need in the future. It is set up for entertaining guests. You and your wife will have the Owner's Wing, your kids will have the four upstairs bedrooms, and any business associates or friends who stay with you can stay in the Guest Wing. We didn't get to see the outbuildings on this trip, but any live-in staff can live in the apartment building. That would give us privacy.
"Do you ride horses, Paul?"
"No. Other than the time my parents and I vacationed at a dude ranch, I've never been on a horse. I didn't do too badly on that trip, but I was only twelve years old and the horses were old and very calm."
"That's fine, Paul. I think you should take up horseback riding, and the house would be good for that. When I was growing up, my father insisted that I learn to ride. He told me that the upper class considered horseback riding to be a sign of social equality. Many of the people you will be doing business with in the future will consider themselves to be among the social elite. From my experience, the social elite pattern themselves on what they think is appropriate for the European upper class. If you ride and have your own stable, that will help you with doing business with that type of person.
"You, I, and Lara know that your upper limit is negotiable. Seven million is more than what you planned to spend on a piece of property, but that is not an excessive price for what you would be getting. If Lara is right about the price needing to be reduced, I'm guessing the estate will be willing to drop the price to around six million or slightly higher. That would be a very good price, and you can easily afford it.
"When we talk with Lara again, we will talk about touring the outbuildings and talk with her about the availability of properties in the four to five million price range. When we tour the cheaper properties, tell her that you like the properties. When we return to her office, you tell her you like this property and talk with her about putting in a bid of five and a half million US dollars. Let her know that if the owner's estate won't negotiate, then you would be interested in the one of the lower priced properties.
"We can discuss her tactics for presenting your offer with her. I think that if she presents the offer in the right way, the estate's heirs may be willing to meet us at or less than six million. We are going to be returning home in a week or so. If Lara presents the offer before we leave, she can let the estate's lawyer know that we are going back to the states, and that you may lose interest if they don't negotiate. I think the lawyer may convince the heirs that they won't get what they want for the house and it would be best for them to negotiate with you. He could present the situation as, there has been no serious offer in over a year, and if they don't negotiate now, the house may fall into disrepair before they find another buyer. Another good negotiating point for Lara to point out is, the owners are currently incurring the cost of maintaining and safeguarding the property, which can't be cheap."
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