|
A superstar real estate agent plots his comeback
2009-08-01
MIAMI - It's the perfect Miami morning at Carlos Justo's penthouse -- warm and bright, with luxury yachts powering through the sparkling blue Atlantic Ocean some 30 stories below. Muzi.com News 10092446-1 (muzi.com)Justo, a 53-year-old real estate agent, has been awake since 3:30 a.m. but he shows no sign of fatigue. His eyes scan back and forth, from the high rise condos, to the water, and back to the condos. Muzi.com News 10092446-2 (muzi.com) An assistant, sitting at a glass table with her back to the stunning view, is talking business. She wants to know whether he will receive any commissions or checks anytime soon. Muzi.com News 10092446-3 (muzi.com) "Right now, we don't have any money," Justo says. He continues talking. Fast. Pacing back and forth, he gazes out the window. Muzi.com News 10092446-4 (muzi.com) "There's money to be made," he says, grinning. "I'm creating the team. I'm creating the billion-dollar real estate team." Muzi.com News 10092446-5 (muzi.com) In fact, Justo is $20 million in debt. He is five months into a massive bankruptcy filing. The IRS is after him for $6 million. Muzi.com News 10092446-6 (muzi.com) And yet, he dreams. Muzi.com News 10092446-7 (muzi.com) A Cuban immigrant who came to the United States with nothing, Justo's is a rags-to-riches-to-rags story, a peculiarly American dream. Muzi.com News 10092446-8 (muzi.com) Once, he starred on the TLC network program "Million Dollar Agents." There was a time he appeared in social columns for brokering real estate deals for one-named celebrities like J-Lo, Shaq, Versace, and two-named notables like Gloria Estefan, Sylvester Stallone, Rosie O'Donnell. Muzi.com News 10092446-9 (muzi.com) Like so many of our modern titans -- think Donald Trump -- he inspires both admiration and contempt. Greed, he acknowledges, fueled his rise. Hubris ensured his fall. Muzi.com News 10092446-10 (muzi.com) Next time, he says, it will all be different. Muzi.com News 10092446-11 (muzi.com) ___ Muzi.com News 10092446-12 (muzi.com) Living among the wealthy didn't come naturally to Justo; he was born in Cuba, and as a child lived without electricity, running water or plumbing. Muzi.com News 10092446-13 (muzi.com) His family came to Miami in 1967 when Justo was 11. He got his GED at night school but by the time he was 19, Justo had learned English and bought his first home -- a modest, stucco triplex -- for $20,000 with money he made as a janitor. Muzi.com News 10092446-14 (muzi.com) For the man who grew up with so little, talking about homes came easily. So he got his real estate license. Early on, he targeted the top end of Miami's real estate market, the places most folks see on TV: mansions accessorized with palm trees, sugar-sand beaches and turquoise waters. Muzi.com News 10092446-15 (muzi.com) In 2000, he brokered the $19 million sale of the area's most famous home, the Ocean Drive mansion where fashion designer Gianni Versace was killed. Muzi.com News 10092446-16 (muzi.com) Justo's success was astronomical, the product of his aggressive enthusiasm, uncanny knowledge of the ultra-rich and a phenomenal real estate market. Muzi.com News 10092446-17 (muzi.com) In 2005, Justo was worth $20 million. He and the agents who worked for him sold $200 million in real estate in a single year. He was also the owner of 12 multimillion dollar estates in the county's most exclusive enclaves; he intended to eventually flip them and make a profit. Justo and his business partner, Irving Padron, were awarded a prestigious Sotheby's franchise and opened its offices in one of the few historic mansions in downtown Miami. Muzi.com News 10092446-18 (muzi.com) His strategy seemed like a sure thing in a city filled with speculation. Muzi.com News 10092446-19 (muzi.com) Unlike most other brokers in Miami at the time, Justo never dealt in new condominiums -- he thought they were too risky. In 2005, he was quoted in the Miami Herald as saying, "I refuse to sell condos; I think it's irresponsible. They will end up falling on their asses." Muzi.com News 10092446-20 (muzi.com) Those were the days when Americans were addicted to real estate. It seemed like on every cable channel, there was a different program featuring the nation's collective obsession. Justo was in the middle of it all; a promo for "Million Dollar Agents" described him as "the biggest fish in Miami's shark-infested pool of real estate." Muzi.com News 10092446-21 (muzi.com) Crews filmed him racing maniacally around Miami, showing luxury homes by day (from a helicopter) and going to parties at night (in a chauffeured Rolls Royce). Cameras captured his unorthodox methods of doing business: using a lunar calendar to plan deals, going barefoot during meetings, meditating with his sales team. Muzi.com News 10092446-22 (muzi.com) Justo was a natural on TV, with his amber eyes, bald head and perpetual tan. His custom-made, silk suits -- white or black or occasionally red -- looked suspiciously like pajamas, which he wore to closings and clubs alike. Muzi.com News 10092446-23 (muzi.com) "We get paid for having fun!" Justo roared in one episode. Muzi.com News 10092446-24 (muzi.com) Justo spent $1,000 on sushi lunches, $3,000 a month on life coaching. He didn't accumulate many things -- he enjoyed sparsely decorated, all-white furniture and rooms -- and freely let his friends stay in the various homes he owned. Muzi.com News 10092446-25 (muzi.com) Justo says that during those years, he "wasn't operating out of integrity" -- and that many of the people surrounding him weren't, either. Greed and ego were his motivation. He took advice, he says, from the wrong people and didn't pay attention to details. Muzi.com News 10092446-26 (muzi.com) He also didn't make many friends, says Kevin Tomlinson, a real estate blogger and Miami Beach agent who says Justo stole one of his clients in the late '90s. Muzi.com News 10092446-27 (muzi.com) "When I got into the business, he was the king. He was the legend that everybody looked and aspired to be," Tomlinson said. "But over the years, his reputation within the broker industry is a mixture of people being afraid or intimidated by him and his success or downright loathing." Muzi.com News 10092446-28 (muzi.com) Justo took out mortgages he couldn't afford, tapped into equity, splurged with credit cards. He didn't diversify his portfolio and didn't save a penny. Muzi.com News 10092446-29 (muzi.com) "I knew the market was going to crash," he said. "It was irresponsible what we did, what all of us did in the United States. We took out huge loans, we bought things that people had no business buying." Muzi.com News 10092446-30 (muzi.com) ___ Muzi.com News 10092446-31 (muzi.com) Friday, Feb. 13, 2009. A clerk at the federal court in Miami stamped "RECEIVED" on Justo's bankruptcy filing. Muzi.com News 10092446-32 (muzi.com) For three years, Justo had tried to avoid filing Chapter 7, even borrowing $15,000 from his 85-year-old mother and $75,000 from his 83-year-old aunt to pay his monthly debts. But he was underwater on too many mortgages. There were other creditors, too, including the IRS, which claimed that he should have filed his taxes in the United States, not in the U.S. Virgin Islands, which Justo says is his principal residence. Muzi.com News 10092446-33 (muzi.com) He was named in two lawsuits, one filed by a former real estate agent who worked for his team, and another by Padron, his former business partner. Both sought hundreds of thousands of dollars, alleging that Justo didn't pay commissions on various deals. Muzi.com News 10092446-34 (muzi.com) Justo had no savings, no stocks, no bonds. Muzi.com News 10092446-35 (muzi.com) His checking account hit bottom at $49.73. His financial picture was summed up in one dry sentence in the bankruptcy filing: "At the current time, the debtor has no income due to the state of the real estate market." Muzi.com News 10092446-36 (muzi.com) That week, at the urging of a friend, Justo had offered his penthouse as a crash pad to a group of traveling Buddhist monks from Tibet. As the monks chanted in an even baritone, Justo's mind reeled in turmoil. Muzi.com News 10092446-37 (muzi.com) "What happens if everything is gone?" he thought. Muzi.com News 10092446-38 (muzi.com) He wrote a $3,000 check as a donation to the Buddhist monks. It bounced. Muzi.com News 10092446-39 (muzi.com)
| 
