1/7/09 - Steven Good found dead at 52

This review originally appeared in Real Estate investor’s Monthly.

I rarely come across a good new real estate book any more. The available books all seem to be come-ons for expensive get-rich-quick seminars or books "written" by Realtors(r) to impress prospective clients. Actually, Churches, Jails, and Gold Mines… by Steven Good falls into that latter category, but it is still an excellent book.

His thesis appears to be, "My company and I are great." I found it persuasive, notwithstanding the immodesty.

Steven Good

Steven Good is the CEO of Sheldon Good & Company. Sheldon is Steven's father, although Steven says he started the company in 1978. Sheldon Good & Company appears to be the leading real estate auctioneer in the U.S.

Because auctions are use to sell unusual and/or difficult-to-sell property, his experiences are interesting and instructive. Extreme situations are better learning opportunities and this book is full of extreme situations.

I met Steven at the NAR Convention in San Francisco last month. He was autographing copies of his new book and gave me one. He also spent 15 or 20 minutes talking to me about it.

Childlike enthusiasm

Good has a childlike enthusiasm for much of his work. To read the account of his deal with Donald Trump, you would think he was a star-struck teenager who got to meet Eminem. The childlike enthusiasm makes the book more fun to read than most real estate books.

Show biz

The auction segment of real estate is show business to a large extent. After reading it, you'll feel like you're in Dullsville next time you buy or sell a property the non-auction way. That's also part of the fun of the book.

Good uses massive advertising and public relations (paid for in advance by the client). The actual auction is a performance in a room full of people—sometimes with live music, celebrity appearances, and simulcasts to multiple locations around the U.S.


He says his firm tries to assign executives who like a particular group—like lawyers—to specialize in soliciting business from and dealing with that group. I think that's very shrewd. You should do the same, which would generally mean specializing in a niche where you like the people. For example, I should not be a renovator because I think many subcontractors are incorrigible slobs about appointments, quality of work, etc.

But the need to assign execs who like the client type begs the question, what about the CEO? Wouldn't he have to like everybody—or claim to?

Is he Barney?

Just so. Good is a politician—which is probably a requirement given his firm's diverse customer base. Many of his customers are government or non-profit organizations. The book not only seeks business from such groups by bragging about Good's expertise, he also claims to like personally a great many different types of people.

He likes volunteer board members—a group I have found to be almost uniformly undisciplined and incompetent. He likes government bureaucrats and elected politicians—groups whose likability is so well known that I need add no comment.

Such Will Rogersesque behavior seems unlikely to me. I must note that the typical reader of this newsletter is very independent and may have gotten into the landlord business to get away from business where you have to pretend to like lots of powerful people.

But Good also reveals some cracks in his "I like everybody" facade. He describes how a 30-minute business meeting goes in various regions.

The book contains numerous biographical profiles of client executives, apparently for no purpose other than to flatter the executives in question—like the endless head shots in a controlled-circulation industry newspaper or house organ.

Business strategy

Good is surprisingly forthcoming about his business strategy.

1. He wants to avoid becoming a commodity because commodity status means you lose "…the ability to control market share, margin, and employee base" That's pretty good analysis considering that Good was trained in the law, not business. 2. He prefers niche marketing in disorganized markets because there is less competition and better margins. His niche is "not easily valued" property. Also smart. 3. He gives his employees part ownership of the firm to attract and retain top people.

Front-end fees

Although auctioning is a form of brokerage and Sheldon Good & Company started out as a conventional brokerage, auctioneers get paid differently. They require that clients pay a significant amount of front money. Good even requires "a minimal fee for inspecting and analyzing" the prospective client's property. In other words, you have to pay them to pitch their services to you.

I'm not complaining. It's a mark of how truly professional they are and contrasts starkly with the many agents who call themselves professionals, but who will mow your lawn if you prom ise to give them a listing.

Auctions require lots of advertising. That advertising must be paid before the auction and the auctioneer does not front that money the way conventional brokers do.

Bidders also have to put up front money—like a wire transfer or cashiers check for 5% of their bid—before they are allowed to bid.


Depending upon the property, Good advertises "locally, regionally, nationally, and internationally." Identifying the market for a particular property is a big part of what Good does for its clients.

Standard contracts

Unlike conventional deals, auctioneers cannot negotiate contracts line by line. Rather they must create a non-negotiable contract that all bidders must agree to in advance. Accordingly, they try to make the terms attractive rather than the usual lawyer approach of trying to make the contract as favorable as possible to their client then giving points away during the negotiation.

Many variations

Good uses many auction variations. In some cases, they seek to sell multiple properties in bulk to one or few buyers. In others, they conclude the client's best interests are served by selling the property to individual retail buyers.

In some cases, they let bidders alternative bids, e.g., "I bid this much for Property A. If I am not the highest bidder fro Property A, I bid this much for Property B," and so on.

Some auctions use sealed bids; other open outcry; again decided according to what best serves the particular client. If a sealed-bid auction results in multiple close bids, they generally convert to an open outcry so no one loses by $1 or some similar small amount.

Some auctions have minimum bids. Some are absolute, meaning the property will be sold to the highest bidder no matter how low the bid. In other cases, the seller has the right not to sell if the highest bid is too low. The latter type turns off buyers somewhat. The former scares sellers.

In many auctions, Good use many different variations—like no minimum bids or reserve price (minimum winning bid) on some properties being offered, but a reserve price on others at the same auction, bulk sale on some and individual on others, and so forth.

Multiple locations

If the market for the property(ies) has multiple locations, they have simultaneous auctions in several cities,. For example, when they auctioned Donald Trump condos in Florida, they figured the market was Floridians, Northeasterners, and Midwesterners. Accordingly, they held the auction simultaneously in Florida, New York City, and Chicago with all bids being heard in Florida by phone hookup.


Before the auctions, Good's employees must qualify then show the property(ies) to prospective bidders as well as their construction, architects, and other experts. Because these are often large scale deals, thousands of showings are sometimes required.

Providing complete information and opportunities to inspect about the properties are a must or bidders will drop out before the auction. To put it in conventional terms, Good wants all inspection contingencies removed before the auction.

Sometimes, inspections can be a real challenge, such as when Good sold 900,000 acres of Montana mineral rights.


Just as they do not want any inspection contingencies, they do not want any financing contingencies. To avoid them, they often arrange with lenders to offer a standard financing package at the auction. This is especially true when they sell to consumers or small investors.

Complex laws

Good's auctions often involve properties owned or controlled by the government, heavily regulated sellers like banks, and multiple states or even countries. As a result, his company must identify and comply with myriad laws and regulations. For example, they must be licensed in the pertinent states or countries. Some properties are certified historic. And so forth. And the sales must be conducted in accordance with the many local, state, and federal laws pertaining to sales of property involving government.

Same use or new use

Sometimes, Good's clients are selling a property that will continue to be used as currently used. Other times—for example, when he sold the Porter County (IN) Jail—the property use will most likely be changed by the new buyer.

Must sell idea of auction

Unlike conventional Realtors(r), Good often has to sell the prospective client on the whole idea of using an auction to sell real estate, as well as educating the client on how such auctions work.

Educational seminars

At times, Good has to hold educational seminars to educate prospective bidders on the particular property and on pre-auction and bidding procedures.

Bad publicity

With such large properties, Good and his clients often get attacked by environmentalists, preservationists, or other political factions who feel they have the right to tell others how to use their properties. When they offered mineral rights to individuals who owned the surface property over them, local press accused them of extortion.

Wide variety of sellers

One of the most instructive aspects of the book is the wide variety of sellers Good represented. He explains their unique aspects and how they dealt with them. Very impressive.

Readers of this newsletter will probably encounter a variety, albeit much more limited, of sellers during their careers. Good's explanations will sensitize you to the need for different approaches with different sellers.

The first deal he describes is a huge, troubled housing development. The seller was the savings & loan that had foreclosed on the developer. Contrary to widespread belief in get rich-quick seminars, the executives in charge of selling OREOs (real estate owned by lenders as a result of foreclosures) try to get as much for the properties as possible.

Trust seller

Good's book quotes a guy who held a similar job—Mark Hale of Northern Trust. "…my phone rang a lot. I was the person charged with selling real property owned by trusts and estates.

It was the siren song of a potential bargain that kept my phone ringing. People are convinced that the representative of a trust or estate is either desperate to sell assets, unconcerned about the price, or just plain ignorant about the real estate market."

Bass brothers, gold mines, Michael Jordan

The book's second deal involved Miami beach hotels that were owned by a Southern California bank owned by one of the Texas Bass brothers.

The third was the mineral rights owned by a publicly-traded, gold-mining company.

The fourth seller was the lender who had made a loan to the owners of Michael Jordan's Restaurant. Actually, there were still owners and the tenant who operated the restaurant. Good had to "cat herd" the various parties and lawyers with the help of the judge who was presiding over the various lawsuits.

Here come da judge

One interesting trick: every time one of the litigators threatened some new litigation stunt, Good went to the judge and got an order prohibiting it. Indeed, there was litigation between the restaurant operator and the landlord at the start of Good's involvement. He told the judge that it would prevent selling the property for the best price. The judge got the parties to settle before the auction.

The fifth seller was the all-volunteer board of the United in Faith Lutheran Church, which was selling eight of its churches in Chicago.

The sixth client was a joint venture with the National Association of Realtors(r) and the Urban Land Institute.

The seventh "seller" was a group of creditors, lawyers, and a bankruptcy judge of a home development corporation with several hundred properties to sell. The corporation was minimally cooperative and Good's staff had to recreate or dig up the paperwork a seller would normally provide to the auctioneer.

The eighth seller was an elected County Board of Commissioners.

Why loans go bad

The book contains an interesting observation from Alan Kravets, a workout attorney: "…none…of the billion dollars worth of problem real estate that I worked on as a lawyer was caused by fraud…Rather, most of the problems…result[ed from] one or more of the following:

That third item apparently refers to the Tax Reform Act of 1986. The fourth refers to something I have warned against for twenty years: adjustable rate or balloon mortgages.

Good's elementary school

The ninth was the school district where Good went to elementary school and was a crossing guard. (This deal offers another example of Good's easily-triggered childlike enthusiasm. He was thrilled to work for them and requested a crossing guard belt when the auction ended. I wouldn't go around the corner to visit my old elementary schools, let alone work for them. I have no particular bad memories. I'm just not interested.)

'The Donald'

The last client in the book was "The Donald." Good was really, really excited about working for Trump. He and Trump agreed on his fee, but then Trump's lawyer demanded that he cut the fee, threatening to hire one of Good's competitors. Good told them to go ahead.

Trump did and the ensuing auction went so bad that he sued the auctioneer. Then he called Good again. Seems to me Good should have hung up on Trump because of the prior attempt to renegotiate the fee.

I reviewed Trump's autobiographical Art of the Deal some years ago,so I am not surprised by this renegotiation stunt. Very New York City. Very Donald.

"Fool me once, shame on you…," and, "Once burned, twice shy," come to mind. But Good was still star-struck and agreed to sell Trump's condos.

Reading about the use of Trump's celebrity to sell the condos is fun, but probably not usable information for real estate investors.

Good allowed Trump to write an "afterword" for this book. I expected that to be Trump's perspective on the auction Good did for him. No. It is just Donald bragging about one of his deals that has absolutely nothing to do with Good. ??

Good is the real thing

Bad real estate gurus falsely claim they do a lot of real estate deals. Steve Good really does a lot of real estate deals. Would you believe $4 billion? Furthermore, the variety of his deals is mind boggling and includes virtually every imaginable niche and a few that you would not imagine. As a result, his book tells you how real estate deals are actually done in the real world. There are darned few such books published anymore.