For all the power and perquisites of the U.S. presidency, some of the problems of ordinary citizens necessarily follow a man into the White House. Like living within one's income, and keeping up the payments on the mortgage.
The latter can be troublesome, particularly when the President is Richard Nixon, for whom the White House is not entirely a home. He is, by his own testimony, a "saltwater man," and in a relatively short span of time has picked up two seaside abodes in Florida, another in California, as well as retaining his leasehold on the old family manse in Whittier, Calif. While none of the four dwellings is perhaps fit for a king, the three recent acquisitions are certainly suitable to the style of a First Family, with all that that entails. How in the world does Nixon meet those monthly mortgage bills on a salary of only $200,000 a year?
Slightly Surrealistic. Well, it helps to have been a Wall Street lawyer—in more ways than one. Consider the ledgerdemain of the San Clemente spread. The price for the estate of 21 acres, including the large, Spanish-style villa now known familiarly as White House West, was $1.4 million. The terms were $400,000 down and $100,000 per year, plus 7½% interest per year on the initial outstanding debt of $1,000,000. The sale called for the principal to be paid off within five years. Normally, such an undertaking would require prodigious amounts of cash: annual payments of $175,000 for five years and then a liquidating wallop payout of $500,000.
Nixon, however, elected to purchase with his own capital only the five seaside acres of the estate and the house. This gives him only one-fifth of the property, and only one-fifth of the down payment and maintenance charges to cope with personally. His portion of the down payment was $80,000, the principal is $20,000 annually and the interest is $15,000 per year. In addition, the President exercised an option to buy the remaining four-fifths of the surrounding grounds. This was done for him by a trustee, the Title Insurance and Trust Co. of Los Angeles. The trustee pays for the remaining four-fifths with $1,000,000 that Nixon borrowed from the Cotton Estate, previous owners of the spread. Out of this money comes the necessary $320,000 down payment, as well as the $80,000 for the principal payment and $60,000 in interest per year.
This arrangement seems slightly surrealistic, but it is cheaper than most available mortgages would be. In effect, the President is paying off the additional land at today's prices, holding it and gambling on a continuation of the upward trend in real estate prices in the San Clemente area. Within the five-year period, the President will sell all but his five acres and house. If his gamble pays off, he will retire the debt on the borrowed money and perhaps even make a profit. Just to whom the President will sell is not known. It could be a "compatible" buyer—perhaps Nixon's wealthy, longtime friend "Bebe" Rebozo—or it could be the Nixon Foundation, which might build a presidential library and museum on the land, though the President's California home town of Whittier would like that honor.