Asset Management & Recovery: November 2006

Unfortunately, this is something that I hear day in and day out.  In the auction business, people think we are the Magic Hat people.  Truth is, I can only sell a property for the fair market value.  Yesterday's value and next weeks value are not really a factor.

If you buy stock sometimes it goes up and somethimes it goes down.  Real estate FMV sales are kind of like the stock market.  The asset might not be worth what you paid for it.

Is this a very good blog?  I don't know.

I have, however, used this explaination with many sellers and it is something that they understand.  They are not real estate experts and can't understand the real estate market.  They are not stock experts either, but relating the value of property to the fluctuation of the stock market makes them understand for some reason.

Just a thought for people to try. 

I recevied this email from Business First yesterday.  The last line points out that the stats do not include new builds.  New builds seem to be doing OK, but I am getting more and more calls from builders wanting to talk about auctions.  So far we have only done one and that was in conjunction with the builders lender. 

Central Ohio home sales dip 10% in October

Business First of Columbus - 2:51 PM EST Monday

Central Ohio saw a nearly 10 percent drop in the number of houses sold last month, compared with October 2005.

The Columbus Board of Realtors said Monday that 1,982 residences were sold in the region last month, down from 2,196 sold a year ago.

The average sales price slipped 5.7 percent to $166,266, from $176,236 last year, with houses spending an average of 99 days on the market, compared with 86 days last year.

The number of new listings was down 6.9 percent to 3,844 added last month, from 4,131 a year earlier, while the total number of homes listed for sale was up 14.6 percent to 17,746, from 15,488 a year ago.

"The market is leveling off," Chris Reese, the Realtor group's president, said in a release. "This comes as no surprise as we've had such an active housing market for the last four years. But even with record inventory and a drop in sales, our numbers are still comfortably moderate compared to the fallout we're seeing in other parts of the country."

Year-to-date home sales are off 3.7 percent from 2005.

The Columbus Board of Realtors monitors sales in all of Franklin, Delaware, Fayette, Madison, Morrow and Union counties, and portions of Licking, Pickaway, Fairfield, Champaign, Clark, Knox, Logan and Marion counties. The report does not include sales of new houses by builders.

If you have not guessed, the TV in the family room went out today.  Lucky for me, the internet service is operational or I would need to read a book or something.  Below is the schedule of an auction company that specializes in selling building materials.  I have bought trim, toilets, flooring, kithcen cabinets, counter tops and tools from them.  Usually a pretty good deal.  They also have a lot of doors and windows at most sales. 

Paranzino Brothers Auctioneers
2006 Building Material Auction Schedule

KEEP CHECKING THIS PAGE FOR INVENTORY UPDATES!!

LANDSCAPING/NURSERY AUCTION
OPERATED BY DUTTON AUCTIONS
SUNDAY, NOVEMBER 19, 2006 @ 1:00PM
Located at Ever Green Acres Nursery in Navarre, OH
Over 800 Items to be Sold!
For More Info Call:
330-879-2365

2006 FALL SCHEDULE

http://www.pbauctions.com/washington.htm
Washington County Fairgrounds - Washington, Pennsylvania

OVER 700 SQ. OF VINYL SIDING
IN ALL COLORS DIRECT FROM THE MANUFACTURER!!

http://www.pbauctions.com/north%20lima.htm4pm
Paranzino Bros. Auction Facility - North Lima, Ohio

APPROX. 300 SQ. OF VINYL SIDING
IN ALL COLORS DIRECT FROM THE MANUFACTURER!!

http://www.pbauctions.com/prince%20william.htm
Prince William County Fairgrounds - Manassas, Virginia

APPROX. 300 SQ. OF VINYL SIDING
IN ALL COLORS DIRECT FROM THE MANUFACTURER!!

http://www.pbauctions.com/middlefield.htm
Middlefield Market - Middlefield, Ohio

APPROX. 300 SQ. OF VINYL SIDING
IN ALL COLORS DIRECT FROM THE MANUFACTURER!!

http://www.pbauctions.com/lima.htm
Allen County Fairgrounds - Lima, Ohio

APPROX. 300 SQ. OF VINYL SIDING
IN ALL COLORS DIRECT FROM THE MANUFACTURER!!

Tuesday, DECEMBER 19th @ 4pm
Paranzino Bros. Auction Facility - North Lima, Ohio

APPROX. 300 SQ. OF VINYL SIDING
IN ALL COLORS DIRECT FROM THE MANUFACTURER!!

2007 SCHEDULE

ANNUAL NEW YEAR'S DAY SALE
Monday, January 1st @ 11am
Middlefield Market - Middlefield, Ohio

Saturday, January 6th @ 9am
Richland Co. Fairgrounds - Mansfield, Ohio

Tuesday, January 16th @ 4pm
Paranzino Auction Facility - North Lima, Ohio

Saturday, January 27th @ 9am
Clark Co. Fairgrounds - Springfield, Ohio

Saturday, February 3rd @ 9am
Bloomsburg Co. Fairgrounds - Bloomsburg, Pennsylvania

Wednesday, February 7th @ 4pm
Middlefield Market - Middlefield, Ohio

Saturday, February 10th @ 9am
Washington Co. Fairgrounds - Washington, Pennsylvania

Tuesday, February 20th @ 4pm
Paranzino Auction Facility - North Lima, Ohio

Saturday, February 24th @ 9am
Muskingum Co. Fairgrounds - Zanesville, Ohio

Wednesday, March 7th @ 4pm
Middlefield Market - Middlefield, Ohio

Saturday, March 10th @ 9am
Lehigh Co. Fairgrounds- Allentown, Pennsylvania

Saturday, March 17th @ 9am
Clearfield Co. Fairgrounds - Clearfield, Pennsylvania

Tuesday, March 20th @ 4pm
Paranzino Auction Facility - North Lima, Ohio

Saturday, March 24th @ 9am
Washtenaw Farm Council - Ann Arbor, Michigan

Saturday, March 31st @ 9am
Augusta Expoland - Fishersville, Virginia

The National Auctioneers Association recently updated the License Law summary for the State of Ohio.  if you want to find more information on the rules and regulations of conducting a real estate auction in your state, go to www.auctioneers.org.  You can also use this website to find a qualified real estate auctioneer to assist you with the process.

Ohio Department of Agriculture
Division of Enforcement
8995 East Main Street, Building 1
Reynoldsburg, Ohio 43068
Phone: 614-728-6240
Fax: 614-728-6328
Email: auctioneer@mail.agri.state.oh.us
http://www.ohioagriculture.gov/auction

• An auctioneer's license is required for the state of Ohio. Biennual [every two years] license fee is $200 for an auctioneer or special auctioneer. Auction Firm license fee is $100.00 annually.
• Requirements for license applicants : (1) good reputation, (2) trustworthy character, (3) attained the age of at least 18 years, (4) done one of the following: met the apprenticeship requirements set forth in Section 4707.09 of the Revised Code, or met the requirements of Section 4707.12 of the Revised Code, (5) has a general knowledge of the following: the requirements of the Revised Code relative to auctioneers, the auction profession and the principles involved in conducting an auction. Before an apprentice may take the auctioneer's license, he/she must serve a licensed auctioneer apprenticeship of at least 12 months; successfully complete a course of study in auctioneering at an institution approved by the state auctioneers commission, and conduct, as a bid caller, at least 12 auctions under the direct supervision of the sponsoring licensed auctioneer. Applicants may also be licensed if they are licensed in a state that has a reciprocity agreement with Ohio.
• Exceptions to license requirements : Sales at auction conducted by or under the direction of any public authority, or sales required by law to be at auction other than sales pursuant to a judicial order or decree and the owner of any real or personal property desiring to sell the property at auction, provided that the property was not acquired for the purpose of resale. Auction mediation Co. are exempt and internet auctions are exempt. Sales that are a part of an approved course of study, fair auctions as long as a licensed auctioneer is used, licensed livestock dealers selling livestock exclusively as long as they use a licensed auctioneer, and licensed automobile auctions exclusively selling motor vehicles as long as they use a licensed auctioneer.
• An auctioneer must hold a real estate license if he/she will be calling bids and/or handling any aspect of a real estate auction, including the closing.
• The state of Ohio requires applicants to pass an examination . Exams are administered four times per year for an auctioneer and 12 times per year for apprentice. Examination fees are $25 for an auctioneer and $15 for an apprentice and firm managers..
• A person must be a licensed real estate broker or real estate salesperson and licensed auctioneer to enter into an auction contract to sell real property at auction. The bid caller must be a licensed auctioneer or apprentice licensed as a real estate broker or salesperson.
• A person must hold an auctioneer's license to call bids at a real estate auction. However, an auctioneer's license is not required to handle other aspects of a real estate auction, such as closing.
• Ohio has reciprocal agreements with Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.
• The required bond amount for Ohio is $25,000 for an auctioneer or an apprentice and $50,000 for a one-time auction.
• The state of Ohio does not require continuing education.
• New Licenses: Auctioneer; corporation, partnership, or association and auction firm.

I guess today is the day to blog spill.  It is kind of like a brain dump, but different.

Back when I was living in Virginia my neighbor taught me how to cook a turkey on a charcoal grill.  Now it is a tradition for Thanksgiving and Christmas dinners at my house.  This Thanksgiving I am going to my parents house and am, again, doing the bird.

I do a  18-20 LB bird.

You need the following:

• Bird
• 2lbs. bacon
• 2 bottles of BBQ sauce
• 1 can chicken broth
• 1 stick of butter

1. Remove the neck, etc. from the cavity.
2. Clean bird with water
3. Put butter in cavity
4. Wrap bird in bacon
5. Set grill for indirect grilling
6. Put drip pan w/ chicken broth under the bird
7. Brush BBQ sauce all over bird
8. Add new coals every hour
9. Baste every 20-30 minutes

Bird cooks about 20 minutes per pound.

"Auctions for Dummies" - This is really kind of in the works.  Right now it is a stack of papers and binders about 24 inches thick. 

"Dirty Tricks for Clean People" - I am not sure that the world is ready for that or if I could afford all of the legal bills associated with the law suits levied against me when people actually try some of the stuff.

"Columbus, Ohio's guide to Chineese Buffets" - This one is my favorite works in progress.  This idea came to me a few years back when I was running a few construction crews on my rehab side.  I liked to pop in and see how things were going.  This usually happened around lunch time and next thing I knew, I had all of them out to lunch.

So far, my two favorites are Mark Pi's on W. Broad St., near 270 and Asian Garden Buffet on 23 near Polaris. Stay away from the iced tea there though.  My daughter says it's yucky.

I don't kow about where you are located, but here in Columbus OSU football is the King of all sports.  People don't plan events against home football games here because lots of people won't show up.  We know people that moved wedding dates and I just wont do an auction on game day.  Too much risk that nobody will come.

If that isn't enough, there are the tailgates.  Today is the OSU - Michigan game.  #1 vs #2.  The tailgate lots opened up YESTERDAY (Friday) at 6am.  Within 30 minutes, the first lot was full.

We have been cooking for two days in preparation for our tailgate.  It is about 5am right now and I am up, getting ready to go down to the parking lot.  So are most of my neighbors.  We are off to the races, one might say....

The stadium holds about 110,000 people and over 1,000,000 are projected to be there so I guess the tailgates are going to be over the top this weekend.  UHaul rentals are sold out, taxis will give you about a 1 hour window for pickup.

My partner and his brother own an old school bus that we party on.  It doesn't look like much here, but we jazz it up.  It has strobe lights inside and has been turned into a dance club.  Outside we put 3 tents, big screen, food tables and heaters.  2 beer taps have been drilled in the side, so you can obtain a frosty beverage by just walking up.  We need to make it easy, you know.  The bus was brought down an d parked last night.  It was a rough one.  It almost wouldn't start.  We figured that out after we loaded it with all the gear.  This wonderful occasion is what helped me find out that you can't geta UHaul in Columbus today.  Hope nobody is moving.  Well, maybe someone might move in from out of town, using out of town movers I suppose.

So, if you are anywhere near Columbus today, come on down to the game.  Pick a parking lot, drop a tent and enjoy.  You'd better get there soon though or you might not be able to get in.

Go Bucks !!!!!!!!!!!!!!!

This morning I was putting together a document to approve a sale in the Franklin County Courts.    Below outlines what an auction marketing effort for a small commercial building might look like here in Columbus.  This profile brought over 50 groups through 2 property inspection periods.  3 bidders registered and about 15 other individuals attended the sale.  This profile is for local marketing only.

The Receiver conducted considerable marketing efforts to bring about the sale including:

1. Display advertising in the Daily Reporter for 15 days (in addition to legal ads)
2. Legal Notices in Daily Reporter for 5 consecutive weeks.
3. Display advertising in Business First on Oct. 27^th, Nov. 3^rd and Nov. 10^th. The ads on the 27^th and 10^th were in the classified section and the ad on Nov. 3^rd was upgraded to a display ad in the main body of the paper.
4. Classified advertising in the Columbus Dispatch auction section on Oct. 29^th, Nov. 5^th and Nov. 12^th.   Additional advertising ran in commercial real estate section of Dispatch on same dates directing readers to the auction ads.
5. Display Advertising in the Suburban Newspaper (Worthington Addition) on October 25^th, Nov. 1^st and Nov. 8^th.
6. Full color direct mail piece sent to approximately 2000 Worthington area businesses.
7. Online listings on Gryphonusa.com, the Columbus Multiple Listing Service (MLS) and Loopnet.com (commercial real estate listing service).
8. 4 x 4 full color sign on High St.
9. Email blasts advertisement sent to approximately 40,000 real estate agents/brokers, real estate attorneys, title agents, mortgage brokers, real estate investors and bankers on October 30, 2006 with copy again on November 13, 2006.
10. Press release about the property and the auction sent via emailwire.com (circulation of over 70,000 journalists). Press release also sent to approximately 25 specific local business and real estate reporters.
11. Two property inspection dates: Oct. 31^st and Nov. 9^th.  In addition, the property was open for inspection one hour before the auction.
12. One on one conversations with representatives of Worthington Chamber of Commerce to identify specific user prospects.

I had a new one yesterday.  It is the distressed real estate trifecta (did I spell that right?)

My New Properties - I was approached to take on management of 60 units of townhomes.  They are all 2 unit structures.  All are on separate parcels.  All are on residential mortgages.  There are at least 5 banks.  Each bank has sold some paper to another and is only servicing the loans, so there are probably 15 underlying lenders here.  Each strucutre is about 30k under water.  Within the "development" there are 5 owners.  My "client", his father, his friend, some guy that nobody can find and the last "owner" is some REO Department.

My New Employees - There is also an unlicensed leasing agent who was on payroll as an employee of the owner and her husband the maintenance guy, also as an employee of the owner.  Yesterday was their last day on his payroll.  We are looking into having them work for me, but only on this property.  Wife is tough due to no license.  There is a little that she can do in our office.  The office is about 20 minutes from the complex.  We offer wife a job and she asks to be paid from the time she leaves her house until the time she gets home.  She is not going to last long.

My New Tenants - One called yesterday while I was in the office with the owner.  She wanted her gutters cleaned and there was a little squeek in the ceiling fan.  No fixy, No payee says she.  Now she is in a $550/mo unit and only pays $380.  Nuff said on tenants.

The Overall Situation - In addition to just managing the properties, the owner wants to list them for short sale.  Not bad.  $80,000 each x 26 (the units belongto dad).  Sounds like a good month.  Here is the catch. CH 7 is coming.  There will be a trustee involved for a little while until she'he determines that there is no equity.  She/he might sieze all of my cash, so that could be bad.  Then there will be an abandonment and it will be just me, myself and I until either short sale completion or foreclosure completion.  Good news is that I sell REO for some of the banks involved.

I just realized that this blog could be about three times the length if I were to add in all of the details.

It is going to be a mess.  There are so many ways for it to go wrong I could not possibly list all of them.  This is going to be such an adventure that I can't possibly turn it down.

They are not "CALLING" races anymore, but CNN projects that the House will go back to the Democrats.  I wonder what Rumsfeld is doing right now?

CNN Headline - "Dems Win House"