I couldn’t give my mom what she most wished for: a son close to home who would become a cop like Dad, marry a woman named Gretel, have a couple of kids, and live in a house two blocks from hers. That was the way in most Austrian families. She and my father had been okay with my move to Munich, which was 250 miles away and reachable by train. But I now realized that when I’d left for America without warning in 1968, I had shocked and hurt them. I wasn’t going back, of course, but I wanted to make up for that too.
I started sending her money every month and calling her all the time. I tried to convince her to move to the United States. She didn’t want to. Then I tried to have her fly over to visit. She didn’t want to do that either. Finally, in 1973, about six months after my father died, she did come, and stayed with Barbara and me for a few weeks. She returned the next year too, and every year after that. I also found more and more of a connection with Patrick, my nephew. When he was little, and I went to Europe, I made sure to visit him and Erika and her husband, a military man who was a devoted stepfather. Then when Patrick got to be about ten, he became fascinated with the idea of his uncle living in America. He started collecting my movie posters. Erika would ask me for memorabilia; I sent him a dagger from Conan and T-shirts from The Terminator and other movies, and wrote letters for him to show off at school. In high school he would periodically ask me to mail him twenty or thirty autographed photos, which he used for who knows what entrepreneurial purpose. I helped send him to an international school in Portugal and, with Erika’s permission, promised that if he kept up his grades, he could come to Los Angeles for college. He became my pride and joy.
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Even though the supersonic airport no longer looked superpromising, and Franco and I were still making payments on fifteen acres of desert, I continued to believe that real estate was the place to invest. Many of our jobs entailed fixing up old houses, and it was eye opening. The owners would pay us $10,000 to fix up a house they’d bought for $200,000. Then they’d turn around and sell it for $300,000. Clearly there was real money to be made.
So I put aside as much money as I could and started looking around for investment possibilities. Two of the bodybuilders who had escaped from Czechoslovakia and come to California just before me had taken their savings and bought a little house to live in. That was fine, but they still had to pay the mortgage. I wanted an investment that would earn money, so that I could cover the mortgage through rents instead of having to pay it myself. Most people would buy a house if they could afford it; it was very unusual then to buy a rental property.
I liked the idea of owning an apartment building. I could picture starting with a small building, taking the best unit for myself to live in, and paying all the expenses by renting out the rest. That would let me learn the business, and as the investment paid off, I could expand from there.
Over the next two or three years, I did research. Every day I would look at the real estate section in the newspaper, studying the prices and reading the stories and ads. I got to where I knew every square block of Santa Monica. I knew how much the property values increased north of Olympic Boulevard versus north of Wilshire versus north of Sunset. I understood about schools and restaurants and proximity to the beach.
This wonderful real estate lady named Olga Asat took me under her wing. She might have been Egyptian; she’d emigrated from somewhere in the Middle East. Olga was older, short and heavyset, with frizzy hair, and she always wore a black outfit because she thought it made her appear leaner. You might look at someone like that and think, “Why am I dealing with her?” But I was drawn to the human being, the heart, the motherly love: she saw me as a fellow foreigner and really wanted to see me do well. She was such a pistol.
We ended up working together for years. Eventually, with Olga’s help, I knew every building in town. I knew every transaction: who was selling, at what price, how much the property had appreciated since it last changed hands, what the financial sheet looked like, the cost of yearly upkeep, the interest rate on the financing. I met landlords and bankers. Olga was a miracle worker. She would try so hard, going from building to building to building until we found the right opportunity.
The math of real estate really spoke to me. I could tour a building, and as I walked through it, I would ask about the square footage, the vacancy factor, what it would cost per square foot to operate, and quickly calculate in my mind how many times the gross I could afford to offer and still be able to make the payments. The selling agent would look at me in a weird way as if to say, “How did he figure that out?”
It was just a talent I had. I’d get out a pencil and say, “I cannot go any higher than ten times gross because I think the average maintenance expense on a building like this is 5 percent. You have to leave that 5 percent available. And the interest rate is now 6.1 percent, so the loan will cost such and such annually.” I would write it all down for the agent.
Then he or she would argue, “Well, you’re right, but don’t forget that the value of the property is going to rise. So maybe you have to put in a little bit of your own money along the way. At the end of the day, the value goes up.”
“I understand,” I’d say, “but I never pay more than ten times gross. If the value goes up in the future, that’s my profit.”
Interesting bargains began to appear after the Arab oil embargo of 1973 and the start of the recession. Olga would call and say, “This seller is in trouble financially,” or “They really extended themselves, I think you should make a quick offer.” In early 1974 she found a six-unit apartment house on Nineteenth Street just north of Wilshire—the more desirable side of Wilshire. The owners were trading up to a bigger building and wanted to sell fast. Even better, their deal on the bigger building was so good that they were willing to come down on price.
The building cost me $215,000. It took every dollar I’d saved—$27,000—plus another $10,000 borrowed from Joe Weider to make the down payment. The place wasn’t much to look at: a sturdy early-1950s two-story structure of wood and brick. But I was happy with it from the minute Barbara and I moved in. It was in a nice neighborhood, and the apartments were roomy and well maintained. Mine was 2,400 square feet, extra large, and had a balcony in the front, a two-car garage underneath, and a little patio out back. It had other benefits too: I rented the other apartments to entertainment people. Actors I met in the gym were always looking for places to stay, so eventually there were four actors living there. It was a way to build connections in the business I wanted to get into. Best of all, I’d moved out of an apartment where I had to pay $1,300 a month in rent and into a property that paid for itself from Day One, just as I’d planned.
Seeing me pull off a $215,000 deal left my old friend Artie Zeller in shock. For days afterward, he kept asking how I had the balls to do it. He could not understand because he never wanted any risk in his life.
“How can you stand the pressure? You have the responsibility of renting out the other five units. You have to collect the rent. What if something goes wrong?” Problems were all he could see. It could be terrible. Tenants would make noise. What if somebody came home drunk? What if somebody slipped, and I got sued? “You know what America is like with the lawsuits!” and blah, blah, blah.