In the 1980s, I read that Fred Sands had purchased a dilapidated radio station in Long Beach at a bankruptcy auction. The station had never appeared up in the Arbitron ratings and was a nonprofit but not intended to be. I discovered that the stereo system in my house was of better quality then the equipment used at the station studio, which was located in a rat infested building and an old rusty pipe served as its antenna. The signal could not be heard outside of the Long Beach Area. Many of the commercials were advertising a Long Beach Hot Dog Stand at $25 per spot.
Fred Sands, as the new owner, advertised in trade publications indicating he was desirous of hiring a general manager with major market experience. My personal inclination was “what does a real estate mogul know about running a radio station”. When I visited the station, the interim manager told me that Fred Sands had been sending him a lot of memos and he was not happy about it. I asked to see the memos and, after reading them, I thought “this is a very smart guy who happens to be in the real estate business but is clearly a superb business man who is really on track as to what needs to be done to the station”.
I took the job as General Manager and worked with Fred Sands very closely for the first year. We went through a lengthy process in getting FCC approval to move the antenna from Signal Hill to Dominguez Hills which was more inland, this improved the coverage radius. We purchased a new 300 ft tower for $300,000. People in the industry said that the new tower was worth more than the radio station. We proved them wrong! With the new tower up at the new location, the signal could be heard all over Los Angeles. We ordered and installed state of the art equipment for the new studio location and hired the best engineer. We selected a new rock format targeting younger demographics. Once the new format was implemented and the new tower was up, the phones melted down. For the first time KNAC FM 105.5 appeared in the Arbitron Ratings and, once stabilized, the station cash flowed a seven figure sum each year. We sold it in 1994 for five times what we paid for it in 1983. The multiple was 5.1 and the annual IRR was 28% over a ten year hold.
Fred and I worked together for about 10 years until he decided to sell the station to a radio group that was going to do an IPO but they never got that far and went down. All in all, it was a good experience. Fred was a great owner and, although, he was very, very involved in the early days. Once the mission had been accomplished and he was comfortable with me executing our shared vision, he pretty much left me alone and we only met once a month. It was a great experience.Nancy Closson
At 26 years of age, I was hired by Fred Sands to run a small escrow company. He was impressed with my abilities and after 90 days, he made me President of the company. We met on a regular basis and he would occasionally say, “It’s time to grow the company,” and grow we did. We ultimately opened 22 branches which made Westland Escrow the largest escrow company in Southern California. We were always very profitable.
When Fred Sands sold his company to Coldwell Banker, Escrow & Title Services had an EBITDA of $5.2 million per year. I was ultimately made President of the Coldwell Banker Escrow Division as well as First California Escrow, Sotheby’s International Realty’s Escrow Division. The knowledge I gained from my 20 years working with Fred is irreplaceable. I could never have achieved the level of success I have enjoyed without his advice and training.Phil McBride
By way of introduction, I was the CFO of Coldwell Banker Los Angeles from 2001 to 2007. I joined the Fred Sands Companies in 1994 and served as CFO until November of 2000 which is when Fred Sands sold his company to Coldwell Banker.
In March of 1995, we acquired Progressive Title Company which was a few weeks away from being shut down by the Insurance Commissioner for insolvency issues.
There were 27 title companies in LA County and Progressive was on the bottom of the list. Everything was wrong with the company! It had a bad reputation including systemic operational inefficiencies, questionable business practices as well as incompetence and a history of excessive litigation. Progressive’s most valuable asset was its License, since no new licenses were being issued by the Insurance Commissioner. We developed a turnaround plan which involved relocating the facility from Monterey Park to Burbank; hiring a General Manager as well as a Sales Manager; and replaced most all employees. We became profitable in six (6) months and one (1) year later we were number 1 or 2 each month in premium per title order. Five (5) years later, we sold the company. Upon exiting the investment, we had earned a 98% internal rate of return with a 35.5 multiple on cash invested – what a deal!Kathy Mehringer
In 1995, I was the manager of the Fred Sands Westlake Village office (Conejo Valley). Our chief competitor was Brown Realtors, a 50 year old company and Joe Brown was a legend in the community. The real estate market was ready to recover from a 6 year recession. At the time, the Fred Sands office was moderately profitable and the Brown office with 70 agents was losing money because it was a stand-alone company not having the benefit of corporate offices. Fred Sands believed that the real estate recovery would soon begin and there would be a run-up in prices. We acquired Brown Realtors in January of 1996 on an earn-out. We laid off the weakest 20% of agents in both offices, closed the Fred Sands office, expanded the iconic Brown facility and moved all agents into the Brown offices. One plus one became three. When Fred Sands sold his company to Coldwell Banker in November of 2000, it was the number two revenue generator in the company behind Beverly Hills. We achieved a cash multiple of 22.5 and a 37.8% IRR. The sales price allocated for this one office which was over $10 Million.Fred Sands Realtors
The company was founded by Fred C. Sands with an initial investment of $50,000. The company grew over the years through organic growth and strategic acquisitions, and ultimately became the largest independent brokerage in California with 65 offices and 4,000 agents including franchise operations generating $9.8 billion in annual sales. In November 2000, the company, which was essentially debt free, was sold to Coldwell Banker for a substantial nine-figure sum. At all times Mr. Sands was the sole shareholder.