It was an eventful moment in the late 1990’s when Ron Rawson (a founding member of the WSU Fiji Chapter) approached the President of Pullman Bank to ask for a loan on the chapter’s fraternity house. One thing led to another, and the banker, Gary Schell ’70 – WSU, became the Purple Legionnaire (chapter advisor).
A good 15 years later Gary Schell continues in his role as chapter advisor and president of the House Corporation. And his story to our luncheon group kept everyone leaning forward and enjoying the presentation.
33 years a banker, 15 years a real estate broker, and survivor of open heart surgery in 2013; Gary is a colorful, seasoned, business guy. His message to the luncheon grads included a behind the scenes look at the long-term funding program he’s advanced for the Pullman chapter.
In the 1960’s the Cougar Fijis were able to purchase two houses located adjacent to their fraternity house. Building on this original portfolio, Gary has led an effort to acquire other properties located within blocks of the fraternity house. At the luncheon Gary reviewed the loan/payback programs that generate a positive cash flow to the benefit of the WSU Chapter. The current portfolio includes 7 properties plus the chapter house for a total valuation of $ 3+ million. The annual revenues exceed $ 200k per year. Every property generates cash flow exceeding the underlying loan expenses.
Several elements of note in this plan:
- To minimize any liability to the fraternity chapter, no fraternity members can be tenants.
- To keep operations at arms length, a professional management firm is used to manage and maintain the properties.
- Gary Schell is typically the listing agent for the properties purchased, and the real estate commission is his compensation for all time and work related to the properties.
- Properties are prime locations within blocks of the fraternity house and adjacent to the WSU campus,
These 8 properties anchor a long term plan to use a couple of the properties to build a new and larger fraternity house in 2028. The house is expected to be built from cash accumulated over the 20 years leading up to 2028.
Thanks to Gary Schell ’70, the WSU chapter has a very strong chapter of young men and a robust real estate portfolio that offers a bright future for Phi Gamma Delta at Washington State University.
It was a terrific luncheon presentation, and we thank Gary. It is food for thought on ways to approach sustainable financing for the Seattle chapter’s long-term success. If you have questions or comments, you can reach this interesting Fiji by email @ GESchell@pullman.com