The house at 369 S. Pennsylvania St. sat empty, ensnared in a legal mess.
Its owner, Pauline Price, had died. Her heirs were fighting. One had induced her, late in life, to sign a document purportedly deeding her house to him.
The Denver probate court appointed a trusted attorney, Bob Steenrod, to manage the disputed estate and sell Price’s house.
Steenrod never listed her house for sale. Instead, his office took a call from an investor, Ridgemoor Realty, with a special offer. Ridgemoor would pay whatever Steenrod’s appraiser thought the house was worth, plus $2,000. In return, nobody else would get a chance to buy it.
Steenrod followed an expedient and well-worn path that cleared an estate sale but fell short of getting the maximum price a buyer was willing to pay. He sold the house to Steven Snyder, Ridgemoor’s owner, for $266,000.
Three days later, Snyder sold it for $315,000.
That was one of 25 residential properties in Denver that Steenrod and his partners, acting as court-appointed estate managers, have sold to the same buyer since 1999. Steenrod sold most as Denver’s public administrator, an estate manager appointed when no heir is willing or available. But Snyder also bought houses from him as a conservator for incapacitated Denver residents and as a manager of disputed estates.
Steenrod and Snyder broke no law. Colorado gives public administrators wide latitude to sell estate homes when heirs are not able to assume that role, and Steenrod said his office “has no personal, business or other relationship with Ridgemoor Realty or its owner other than normal real estate business.”
But the transactions raise questions about whether Colorado probate courts do all they can to maximize benefits to heirs who may be elderly themselves or live in distant places.
Legislator has his suspicions
Shown a list of Ridgemoor’s purchases, Colorado Senate Majority Leader John Morse, D-Colorado Springs, wondered how one person could buy so many houses from a court-appointed estate administrator.
“I’d want to know why we are selling these to real estate investors instead of private individuals,” he said. “This looks too much like a system to create profit here instead of benefiting the estate.”
Of the 25 homes Ridgemoor bought, it resold four within a week for gains of $15,000 to $49,000 and doubled its money on a fifth house in two weeks. Snyder sold two others to a real estate agent he employed. In another case, his bid was accepted even though it was not the highest.
In Colorado, a court-appointed public administrator manages a deceased person’s estate when no one else is able or willing to do so.
Public administrators find and notify heirs, protect any property owned by the deceased person, pay creditors, manage accounts or investments, save memorabilia and key documents, auction salable contents of homes, sell homes and distribute proceeds to heirs.
In Denver, Steenrod has been getting the public administrator cases for 27 years and charges $295 an hour for normal estate work.
Last month, at his request, Denver probate Judge Jean Stewart accepted his resignation, appointed his partner Melissa Schwartz as his successor and Steenrod as Schwartz’s deputy. In a letter, the judge wrote that she did so “only because I am entirely confident that your successor will serve the city and county of Denver with the dedication and professionalism that has marked your tenure.”
Schwartz said Steenrod had sold his law firm to his partners and “is looking to scale back his work and retire.”
Asked whether the Denver probate court sought applications from others interested in succeeding Steenrod, court administrator Lee Cole said Stewart “responded that no others have ever expressed an interest in becoming the public administrator.”
In an interview before the announcement of his resignation, Steenrod expressed confidence that heirs have received maximum benefits on the estate houses that he and his partners sold.
He said he usually gets an appraisal and a real estate broker’s evaluation before offering a house to investors, and he may reject all bids if none approaches its value.
In one case, his office sold a house appraised at $48,000 to the high bidder for $90,000.
Steenrod provided records showing that Ridgemoor consistently met or exceeded his appraiser’s estimated value of estate homes. He said he never checked Denver property records, though, to see who bought the houses Ridgemoor Realty acquired from him or what they paid.
“Once a property is sold, we have estates to administer,” he said.
His records show the first houses Ridgemoor bought from him were listed with a real estate agent, who regularly called investors interested in buying and repairing dilapidated estate homes. But about six years ago, Steenrod began developing his own list of fix-and-flip investors and selling a selected number of estate homes directly to them.
On those sales, he said, “we decided we could save the estates money by eliminating the Realtor in the process” and the 6 percent commission.
“The willingness of these companies to buy distressed properties that are otherwise unsalable in the normal real estate market is a very distinct benefit to these estates,” he said.
Snyder bought many public administrator houses because he submits high bids and meets all sale terms, Steenrod said. “He pays cash. He pays our appraised value. Steve is a good businessman.”
Another possible reason why Ridgemoor repeatedly won: Many real estate investors don’t know of the public administrator’s list.
“Very few people, I think, know about this,” said Charles Roberts, co-owner of Your Castle Real Estate, a company that employs 260 agents, 80 of whom also invest in real estate. “Actually, I don’t know much about it.”
Ridgemoor was not the high bidder on a recent purchase from Steenrod’s office. A higher bid “just flat-out got missed,” Melissa Schwartz said. She said the house was already under contract to Ridgemoor when the other bid was found, and the bidder was told of the mistake.
“When it didn’t come to us, we were obviously upset,” said Mike Hoff, the high bidder. But he said he appreciated the call.
Ridgemoor purchased that house in January for $112,750 and sold it 29 days later for $134,000, city records show. Hoff had bid $115,000.
A Denver Post review of estate sales by public administrators in the judicial districts in Arapahoe, Adams and Jefferson counties found no similar pattern of multiple purchases by a single buyer.
In Colorado, each judicial district appoints one public administrator. By law, that person can be anyone 21 or older who lives or maintains a business within the district. In practice, that appointment has gone to a private attorney who serves indefinitely, holding both the responsibility to maximize payments to heirs and an exclusive opportunity to make money managing the estates.
This week, a Colorado Senate committee is scheduled to hold a hearing on a bill that defines reasonable compensation for public administrators and other fiduciaries and could permit taking a percentage of an estate for their services.
Earning a decent living
In Denver, the administrator reports to Judge Stewart. Steenrod’s office, which employs two other partners, collected $453,689 in public administrator fees last year, $1.3 million in the past three years.
Stewart, who asked The Denver Post to submit written questions, wrote that “the court has no familiarity with Ridgemoor Realty or Steven Snyder” but that “the public administrator has advised the court that investors may be one method of liquidating hard to liquidate properties.”
Before a house sale, “a public administrator does not and need not seek court permission to liquidate estate assets,” she wrote.
In most cases, Steenrod publicly offered estate houses by listing them with a real estate agent. Those have been sold to hundreds of individual buyers.
But among investors buying estate houses in Denver, nobody else approached Ridgemoor Realty’s success.
Since 1999, Ridgemoor has acquired 25 single-family and multi-family homes in Denver from Steenrod’s office. No other investor acquired more than three Denver homes from Steenrod in that time, real estate records show.
A Post analysis of these sales shows that on average, Ridgemoor owned those homes for about one month and sold them for 18 percent more than it paid. Altogether, it gained $646,850, minus expenses, on 25 properties, or about $25,000 per house.
Stephen LaPorta, Steenrod’s appraiser, said he could not evaluate the resales without knowing all the conditions of those sales.
But in general, he said, he has to consider the competition when he values a house owned by a deceased person who stopped maintaining it, and the competition may be foreclosed houses that lenders are eager to sell.
“If the furnace doesn’t work and the appliances haven’t been changed since 1925, what is the market for that property?” he asked.
On sales to investors, the Denver public administrator sends out a letter advising them of an open-house date and requesting written bids on a standard real estate contract. The house is sold “as is.”
Snyder, who operates Ridgemoor Realty from his Greenwood Village home, characterized the Denver estate sales as a tiny part of his business, which consists mainly of buying homes for cash “as is” from their owners.
He attributed his success to his willingness to bid high, pay cash, close at any time and take small profits by buying and selling hundreds of houses.
“We’re good at acquiring and supplying to investors. Investors can’t buy the way we buy,” he said.
Snyder said he spent money to repair many of the houses he acquired from Denver’s public administrator before reselling them but cannot say how much because he has not kept expense records on old sales.
He suggested that when he resold estate homes in days for $15,000 to $49,000 gains, the deal probably included some “fix-up” money for the buyer. But three buyers contacted by The Post said they received no repair money.
When Melanye Phipps checked the real estate sales history of 369 S. Pennsylvania St., a house purchased from Snyder by her husband, “I thought, oh, my goodness, he made some dough,” she said. “He made a quick 50 grand when he sold it to us.”
Snyder sold two other houses he bought from Steenrod to Greg Geller, a real estate agent he employed. Geller rented them to tenants.
“I asked Steve, ‘Can I buy them from you as rentals?’ He said OK,” Geller said, and gave some repair money.
Geller, who no longer works for Snyder, said, “There really has been nobody else in town whose mission was trying to buy 100 houses a year. Because Steve was buying in volume, he could pay more.”
Jason Byrne, who runs Home Trust LLC with his wife, Hope, and buys 30 to 40 houses a year, has a different explanation: “I didn’t know they had an investors’ list.”
For years, “we’ve tried very hard to crack the code of estate sales. In my experience, it is not a transparent process. We’re pretty good at finding where opportunities lie, and we have struck out on this,” he said.
Steenrod provided his real estate records on the homes Ridgemoor resold within a week and the house where Snyder doubled his purchase price in two weeks.
Those records showed Steenrod was appointed to manage Pauline Price’s estate and sell her home at 369 S. Pennsylvania after a legal dispute erupted among her heirs. Ridgemoor then called with an offer to buy the house before anyone else could.
“On occasion, Ridgemoor has been willing to pay $2,000 over the appraisal in order for us to give them the right to purchase particular properties prior to our placing the property on the open market,” Melissa Schwartz wrote in a letter to the heirs’ lawyers.
She asked them if she could sell the house to Ridgemoor for $266,000. They consented, and Ridgemoor resold it for $49,000 more in three days.
Pauline Price had named Rose Segura, a lifelong friend, as an heir and the personal representative of her estate, a role Segura relinquished during the legal fight among heirs.
Segura, who lives in Pueblo, said she never knew that the person who bought her friend’s house from the estate administrator flipped it for $49,000 more.
“That doesn’t seem quite fair, does it?” she asked. “Surely, the public administrator knew what they were doing.”
Judith Obermeier and fellow broker Michael Carroll listed the other houses that Snyder quickly resold for $15,000 to $58,000 more than he paid.
The house at 4253 Mariposa St., which Snyder bought for $48,000 and sold for $106,000, was valued “as is to be approximately $100,000” by Obermeier. But she never saw the inside of the house, which Steenrod’s appraiser deemed unlivable, and later concurred with the appraiser that it should be sold for land value alone.
The house was renovated, not demolished. Seven years later, Denver property records list its value at $271,800.
Carroll and Obermeier are married now and have retired to California. Obermeier said she served as Steenrod’s listing agent from the late 1980s until she retired in 2004, and that Denver estate sales grew to about half of her overall work.
She and Carroll also bought five houses from Steenrod between 1992 and 1997.
The public administrator inherited a lot of dilapidated houses, and “they were offered for cash only,” Carroll said. “Often the rooftop was no good, the heat was no good, the plumbing was no good.”
“It’s like big car dealers”
In cash-only cases, Carroll contacted Ridgemoor and several other large real estate investors. “It’s like your big car dealers. They can do everything in volume,” he said. “The estates got, in my opinion, more money than the houses were worth.”
The Denver public administrator’s investor list is substantial, but few may bid on any one house. In a check of 46 investors on its current list, The Post found one who had bought two properties in Denver from its public administrator and three who had bought one. Most have bought none, according to property records.
Steenrod, who became the Denver probate court’s public administrator in 1983, charges $295 an hour for normal estate work. Partners Melissa Schwartz and Marcie McMinimee charge $240 an hour for legal work on estates worth $50,000 or more, $195 an hour for work on smaller estates.
Steenrod said he strived in various ways to reduce charges to estates, from assigning non-legal work to others to showing up late at real estate closings to minimize his billing time.
“We’re trying to save the estates money by all these little tricks,” he said.
Steenrod believes the Colorado legislature appropriately decided that one public administrator should handle estate cases in each judicial district.
That puts the administrator “under the direct and constant supervision of the district or probate judge,” he said. And given the losses sustained in managing many small estates, “it would be economically unfeasible to have more than one public administrator in any given judicial district.”
Steenrod and his partners said their firm often advances money to protect estate homes, paying for everything from utilities and insurance to home mortgages. For one home with bad plumbing, the firm borrowed $7,389 from its own credit line for repairs.
When Hisashi Takimoto, the owner of a popular Japanese restaurant, died last year, there were “heirs in Japan, payroll in two days,” Steenrod said, and a large outstanding loan secured after a damaging kitchen fire.
Serving as public administrator meant “three months of me managing a restaurant.”
He said he managed to renegotiate the loan, keep the restaurant open and save 15 jobs — and that he will get about $15,000 for $50,000 to $60,000 worth of legal work.
“I’m going to lose $40,000 in unpaid fees,” he said, but “it’s my job to do this.”
While Steenrod served as Denver’s public administrator for 27 years, its probate judge could have dismissed him at any time, he said.
“I serve at the pleasure of the court,” he said.
Steenrod confirmed that he invited Denver probate court employees to Christmas parties at his home. But he said Judge Stewart never attended.
“Very little oversight”
Public administrator laws vary across the United States, experts say, but minimal oversight is common.
“Very little reporting, very little oversight, very little accountability,” said Bob Alexander, secretary of the National Association of Estate Planners and Councils. “It’s free rein to do what they want.”
Some states hire public employees who manage estates and distribute assets to heirs. California counties, for example, pay county employees to serve as public administrators.
If the deceased person owned a home, “we hire a real estate agent to go in and sell it,” said Mary Ann Warren, the deputy public administrator in San Francisco. “We always do it through an agent, and we always get court approval.”
Denver Post staff writer Burt Hubbard and research librarian Barbara Hudson contributed to this report.
