Secrets in the Lowcountry--The River (22 page)

After s
w
allo
w
ing his food, Jeff returned to the topic.
“If I could see his books, I could tell.
Barring that, let me give a fe
w
theories.
Sometimes people
w
ill
lend the developer money
w
ithout stock being issued.
Usually the developer promises a larger return on investment than stocks or bonds or
saving accounts
do
.
An example is if I’m planning to build a shopping center
w
ith houses and apartment and condos, but I don’t
w
ant to go to the bank,
for various reasons,
w
hich I’ll explain in a moment
,
I contact friends or acquaintances and ask if they
w
ould like to make
t
w
o or three times the current interest rate
on their
money
.
He might go higher,
depending on ho
w
risky the proposition is
.
Most people are eager to make a buck.
If they can make
a sum
several times the
norm
, that’s
even better
. T
hat’s
generally
w
hy
i
ndividual
s
invest.”

She star
ted to interrupt.
“As I tell my students, hold the questions until the end.”

Taylor grinned
.

God
,
ho
w
he loved
the
w
ay her eyes sparkled and the dimple that formed
w
hen she smiled.
Clearing his throat, he
w
ent on, “Usually, the developer
w
ill
have a la
w
yer dra
w
up
an agreement. E
veryone investing
w
ill
sign as
w
ell as
the developer
. B
asically
the papers are
an IOU
.
If the investors have a personal relationship
w
ith the developer
,
f
riend, business associate, etc.,
the developer might give them a slightly higher return
.
The normal time period
,
before the
investors
reap any return,
is at the project’s completion.
So the money is not
available
until then
.
The investors realize this before they give their checks.
That’s
w
hy the return is so high.

“No
w
,
w
hy not go to a bank?
Three
main reasons: one the developer sees an opportunity to allo
w
his friends and
/or associates to make money,
not the bank or lending firm
. T
w
o
,
the developer doesn’t have a relationship or record
w
ith the
se com
panies.
And the third,
w
hen money’s tight the developer can avoid high interest loans
and large down payments
by self-financing via investors.
”
He bit off another piece and che
w
ed.

Taylor opened her mo
uth.
Jeff popped a fried green pickle slice
in.
She licked his fingers and he almost fell off his perch.
He struggled on
w
ith a half s
w
allo
w
ed mouthful
barely able to force the food
do
w
n his throat.
“
Let’s look at the second
and third
reason
s
first. T
o borro
w
money, the developer must have a ‘track record’
w
ith the lending organization.
If the developer has defaulted on a loan or failed to pay his bills, no lending organization
w
ill
consider giving him
a loan
.”
H
e offered her another fried pickle
.
She shook her head and kept quiet.

“
If the
lender
does
agree,
w
ith
today’s tight market,
the interest charge
d
the customer
w
ill
eat a
w
ay a
very
large portion of the profit.
The first scenario is self-explaining, I think.”

She nodded in agreement.

“
Any questions on companies?” he asked in a professorial manner.
He pushed the remaining
piece
of his sand
w
ich in his mouth and che
w
ed quietly,
w
atching her facial expressions.

“No, bu
t explain about buying the land.
”

“
W
hen a developer or anyone pu
ts a bid in for a piece of land,
or any p
roperty,
both parties sign a contract
.
At that time
,
the buyer gives a ‘good faith’ deposit
to the seller
.
The amount depends on the price of the property and ag
reement bet
w
een the t
w
o parties
.
If the seller is part of the project, he or sh
e might not receive any money. Instead, t
heir portion of the project is the land.
Until
the project is finished or the
closing
on the land is completed
, no other money changes hands.
If the buyer can’t, for
w
hatever reason, complete the sale, the seller keeps the do
w
n payment.

“Any other questions?”
Jeff
took a
long drink
of s
w
eet tea.

“If
,
” She stopped and s
w
allo
w
ed. “
If he
’s not found,
w
hat happens to
the money people gave him?
W
hen does the la
w
decide
w
hat to do
w
ith his company?
”
She took a very deep breath.

Again, his desires flo
w
ed to the surface. He sat quietly for a moment or t
w
o
.
“This part’s harder and depends on the type of company. Generally,
w
hen people and money are involved, the State of South Carolina acts quickly. A fe
w
years ago, a developer and his pilot took off from a small airport, after checking on one of their projects. They never reached their destination. Search parties hunted in the mountain
from the embarkation point along the
flight plan filed, i.e. the
route the plane should have taken. The only object found
w
as a cooler.”

Taylor flinched. “A cooler?”

Jeff could have kicked himself around the garden an
d into the river for telling that part
.

“
W
hat happened?” Her voice
sounded
very lo
w
and
w
eak.

“Taylor, until
w
e kn
o
w
more
,
there’s no use speculating …
”

She interrupted him. “Many of our friends invested in his various developments. Most are hard,
w
orking, middle-class people
w
ithout a lot of other resources. They can’t afford to
w
ait for years for the courts to release their funds.”

Taylor took his hands and stared at him. Heat flo
w
ed throughout his body.

“Is that
w
hat
w
ill
happen?
How many y
ears
before the case
will be
settle
d
?”

He shook his head. “In the situation I mentioned, after a month, the police, la
w
yers, and the courts decided to declare the men dead.”

She dropped his hands and collapsed against him.
W
ith the food bet
w
een them, he a
w
k
w
ardly put his arms around her. Although he
w
ished to crush her to him, in a
w
ay he appreciated the obstruction separating their bodies. A fe
w
minutes later, her
w
et tears, shed silently as he held her,
w
et his shirt. Allo
w
ing his lips to caress her auburn hair, he said, “Tiny, he’s missing. He’ll be found. None of
w
hat
w
e discussed
w
ill
happen.”

She pulled back,
w
iped her eyes
w
ith the back of her hand. “I pray you are right.”

Clearing his throat, he
asked, “Any other questions, Miss Taylor?”

“
Possibly, but
I need to digest
w
hat you told me
about real estate and
developing.
My other question regards
Ms. Lee
. She
called again
and said
you’d talked
to her
.
W
hat
w
as your impression of her?”
Taylor looked directly at him.

His face hardened.
“That
w
oman is after one thing,
money.
The accident
w
as terrible, but the insurance company
w
ill
probably pay her a fair amount.
B
ecause your dad is the type of person he is,
he
w
ill
no doubt arrange additional money if he believes the girl needs it.
N
o sum
would
ever be enough for Ms. Lee.
She’ll blackmail him, legally, if she not satisfied
w
ith the settlement.
T
rust me
she
w
on
’t ever accept just one payment.
”

“That’s my reading, too.” Taylor fro
w
ned.
“I’m going to call the
Mueller
’s.
Arv
and
Annette
have represented Dad’s business and our personal legal situations for years.
They might
w
ant to be prepared.”

“No might about that situation.
They
definitely
must
be notified.”
Jeff glanced at this
w
atch.
“Lunch
w
as outstanding. Unfortunately,
I have lesson plans to prepare for tomorro
w
and I promised Mary I’d bring Dad over this a
fternoon to spend time
w
ith Doc
.”