Asset Management & Recovery: May 2007

If you have never been to the Memorial Day Ride to the Wall, you are missing out.  I am sitting here thinking that it has been 6 years since I last did the ride.  The last time I rode in it was 2000 with my friend Jeff Koch, a former Naval Officer who drove fast boats for special ops guys in Gulf War I.  This is an incredible event and something that every veteran or motorcycle rider should experience.

Former Spec.- 4, Richard F. Kruse USAR

I have a 5 year old daughter, so I am always watching cartoons in the morning.  Many of them are the old Roadrunner ones from when I was young.  In many of these shows, Wiley Coyote ends up standing in front of a big red button and when he pushes it, something bad happens.

This is exactly what happened at my auction this week.

About 50% of the way through the auction of printing equipment, one of the attendees goes into a room that had no items in it.  The light switch is on the outside of the room.  So he goes in, closes the door behind him and, while standing in the dark, pushes the Emergency Button.  This releases a fire suppressant called HALON and sets off the fire alarm.  Building is evacuated and the fire department shows up.  Eventually the alarm is shut off and, unfortunately, the rest of the auction is cancelled.  We will re-offer the rest of the equipment online-only in the next week or so.

The moral of the story is this:

When walking around in someone else's property, don't go in rooms you have no reason to be in.  Don't play with things you don't understand.  Last, but certainly not least, don't push the big red "do not touch, nuclear launch" looking button and tell me that you thought it was a light switch.

Silly Coyote !!!

About 4 months ago I received a referral from one of my clients to two very nice guys who needed to sell 15 single family homes in Columbus, OH.  Overall the properties were nice.  They had tenants and the tenants were paying the rent.

The problem was that their loans were maturing.  Their payments were about to go up.  The rent would not cover the new payments.  On top of it, the market for their type of property is down about 30%.

Market Drop + Increased Payments = Screwed Seller

Why did the market drop so drastically?  I think it is because about 50% of the buyers dried up when the 0 Down loans took a dive and lending restrictions became tighter.  It used to be that anyone could get a loan.  It was the "anyones" that were buying this stuff.

Right now, the buyer is the professional investor.  The guys are paying cash.  These are about 50% of the deals that I am closing compared to about 10% 4-6 months ago.

Unfortunately, my sellers did not want to renew their listings with me.  At the expiration, they were already planning to come to the table with $100,000 in cash on their side to get out.  They cancelled their appointment to re-list and it has been about 3 weeks since expiration.  I have called them a couple of times and emailed.  Mostly I wanted to see about getting the lockboxes and keys.

Yesterday I found out that they are filing bankruptcy.  It is all due to their real estate portfolio.  These are good guys who really tried hard to do the right thing.

Who's to blame?  I don't know, but it's not them.

I think I have mentioned that I have an auction of equipment today.  That in itself is not all that interesting unless you are wanting to buy a printing press.  If you are, log on to http://www.gryphonusa.com/ and bid online !!

The online part is the interesting part.

A few months ago we started to investigate online bidding for not only our equipment sales, but also for real estate.  We tried one and it had moderate success.  Some bids, but this is still new to folks.  Online bidding for equipment is something that people are comfortable with.

Last night I went to sleep very comfortable that today was going to be a pretty good auction.  Our auction catalog had received over 15,000 downloads.  WOW.

Most of the action we have gotten is, believe it or not, coming from press releases, web postings and, your gonna hate me, blast emails.

So this morning when I wake up, I have about $15,000 in online pre-bids.  I expected one machine to sell for about $3,000.  I have a bid already for twice that.

I am almost done with the bidding platform and soon people will be able to work with us to have online only auctions of real estate.  The online bidding in conjunction with the live auction is already available.  Maybe, just maybe I can fall asleep and get bids on our real estate too.

It sure is nice to wake up and find our sellers items sold !!

Tomorrow we will be conducting an auction of printing equipment in Canal Winchester, OH.  Once the building is clear of the equipment, the building will be available for purchase. 

Please contact me is you or anyone you know are interested in 14,000 SF office/warehouse on the south side of Columbus, OH.  It is about 12,000 SF of warehouse and 2,000 SF of office.  2 drive in dock doors and about ½ mile from a main artery.

Also coming up in the next 3 weeks will be an Absolute Auction of a 24,000 +/- SF building in Youngstown, OH.  The building is currently configured as a 24 lane bowling alley.  Online and live bidding will be available at http://www.gryphonusa.com/.  

I have found a wonderful place to network with business professionals and to advertise.

It is the Business First Newspapaer and Business First Networking Breakfasts.  BF is the local business newspaper with the average subscriber having an annual income of in excess of $150,000.

I absolutely love advertising in the publication.  It is easy and not too expensive. A 2x2 ad costs me $105 for an insertion.  The publication comes out every Friday and targets the professional community.

All of our commercial and higher end residential properties get an ad here, usually more than one.  Believe me, the calls come in.

Back to the breakfasts....  They are attended by usually a minimum of 300 people and are totally free to the attendee.  You will find CEO's, corporate executives, politicians, bankers, philanthropists and business reporters in attendance.  Last week there were two recent college grads working the room to find jobs!  This is not only a great way to find clients or buyers of property, but a great way to meet people who are influential in business and the community.  Breakfasts are held about every 8 weeks in a different part of the Columbus, OH Metro area.

Business First is part of Business Journals, so there may be a similar publication in your area.  Click here.  For a link to Columbus Business First Website click here.  For classified ads, ask for Holly Caruso.  For display ads, Holly can probably help you, but might refer you to Donna.

If you want a free 4 week trial subscription to Columbus Business First, email me your name and contact info. to rfk@gryphonusa.com.    They have given me 100 free trial subscription cards for my friends and clients to enjoy.

Installing a new lock after you have removed the old one is fairly easy, unless you are Danny Smith apparently.

You have a couple of options.  First, you can follow the instructions that come with the lockset.  In the event you can't read detailed instructions in English, Spanish or French, please follow this idiots guide to installing a lockset.  This assumes that you have taken the old lock out and have a door with a hole in it.

1. Buy lockset.  Defiant and Kwikset are inexpensive and easy to drill out if the goober tenant leaves you in a lurch.
2. Remove from package.
3.  The first part to be installed is the bolt carrier.  It is long and thin and has a solid piece of steel inside a thin metal skin.  Push this through the small hole on the edge of the door.  This hole will be found on the side that DOES NOT have hinges on it.  There should be the word UP stamped on the frame.  The word UP goes at the top.  There are also two holes on the face stopper.  The stopper should be flush with the door and the holes will accept the two small, pointed, screws that are in the screw pack.
4. Depending of the location of the old lock in the door, the bolt carrier may need to be expanded.  This is done by simply unscrewing the carrier a half turn until it locks in place in the extended position.  You will know if you need to extend by inserting the carrier into the door edge and looking to see if the X or D looking hole in the carrier is in the middle of the large lock hole.
5. One this is inserted, you will take the lock face and insert it into the big hole that is on the front of the door.  There is a rod that will go through the X or D and come out the back of the door.  The tumbler face should be flush with the door. 
6. Take the knob and attach it to the tumbler face by inserting the rod that is now through the door into the hole on the back of the knob.
7. Line up the holes from the tumbler face, knob plate and bolt carrier.  Make sure the name of the lock (defiant, kwickset, etc.) is at the top of the tumbler face.  This will make it easier to line everything up.  On the knob, there may be a picture of a lock.  If so, this should also be at the top. 
8. Insert the long screws and tighten.
9. You should now be done.

If that doesn't get it done for you, then call a contractor or locksmith.  I would come and do it for you, Danny, but the flight to TX + my time would end up being an excessive expense.

Can't tell you how many times I have needed to do this in my lifetime.  I get a property turned over to me and there are no keys.

Knock, knock.  Who's there? Nobody.  Nobody who? Nobody to let you in you moron!!

Now what?

Try the windows?  Yep.  About a 50% chance to get in there, especially if you have a ladder to go up to the second floor.

All the windows locked?  I guess you are going to need to go through a door.

Now, before taking any drastic measures, try turning the knob, OK Jimbo?  There is a 10-15% chance that it will open.

No on the easy ways all around?  Ok.  Now there is a choice to make.

1. Call the locksmith and pay about $100 for a call.  Maybe they will come right away, but probably not which means another trip to the property for you.
2. Drill the lock and open the door.

What you will need:

1. Electric Drill.  Battery powered is preferred, since if you are at the drill the lock point, there are probably not any powered up exterior outlet available.  Or you could carry your own generator like I do when I dun got a lot of these to do in a day.
2. Pry Bar.
3. Philips Screwdriver.  Preferably on another drill to make it go faster.
4. Drill Bits for Metal.
5. Cutting Oil.  This keeps the bit cool and helps it go through the metal.  It also helps keep the bit sharp and extends the useful life of the bit.
6. Court Order, Letter from Owner or printout showing you as the owner.  This helps when the cops show up.  Note that sometimes they will drive by, look at you, waive and drive away.  When this happens, they are thinking that you must be a landlord or working on a foreclosure.  You should probably be thinking that if the cops see you breaking into a house and assume you are just getting into your own foreclosure home, you are not a landlord in a quality neighborhood.

Things not to do:

1. Do not drill locks or slide in windows at night.  This creates calls to the Police from neighbors and makes the cops actually stop and hassle you, even in the high problem neighborhoods.
2. Do NOT, under any circumstances, do this while wearing a ski mask.  I do not care how cold it is outside.

How to Drill:

If you have your drill and bit all ready to go, there are screws on each side of the deadbolt.  All you need to do is drill through them with a bit that is bigger than the screw.  Place your bit about 50% of the way between the tumbler and the outside of the lock housing in line with the middle of the tumbler and drill in.  You should have hit the screw dead center.  Do this again on the other side.  If done right, the housing will fall right off, exposing the deadbolt carrier.  Insert a screwdriver into the hole at the center of the carrier.  It might look like an X or like a big, oblong, D.  Turn the screwdriver and the deadbolt will recess.  You might have not gotten all of it, so try to give it a little massage with the prybar.  The balance of the screw should just break right off.

If you are drilling a knob, the same measurements and locations of the screws apply.

Have fun.  This is the beginning of your adventure.

Note : Don't go try this on your neighbors house or use it as a vehicle to get yourself a new, used, flat-screen.  You may end up in the chrome bracelets.

I received a call yesterday from a very successful REMAX agent here in Columbus.  He usually carries between 75-100 listings and has a very successful team.  His listings go from about $400,000 up to $2,000,000.

The call was out of the blue, but on my cell.  I don't post my cell online, so he had to have gotten it from someone else.  Regardless the conversation was interesting.  He asked for a meeting as soon as possible.  Ok.  No problem there.  So I asked him what topic he would like to discuss?  "Real Estate Auctions" was the answer.  Is there any particular property that I should look at to prepare?  The answer here was interesting.  He said no, that about 20% of his clients were in need to sell situations and that he wanted to put together a co-marketing effort to reach out to affluent consumers who would embrace selling at auction.

I don't know how many other auctioneers are getting these calls, but I suspect it is just going to increase.  NAA auctioneers have been saying for a long time that auctions are vehicles for selling property at market rates in a short period of time.  It is not just for distressed assets (although we do a lot of those).

I look forward to seeing everyone at the auction.  Happy bidding.

I have been talking to people about this for over a year.  Running the foreclosure auction through a private firm or individual to streamline it.  There is already law on the books that allows for this possibility.  It looks like someone has had the same idea.  This email went out to members of the Columbus Bar Association yesterday.......

The United States District Court for the Southern District of Ohio will be appointing Special Masters in foreclosure cases on a case-by-case basis. Compensation is $500 per foreclosure case. If interested in this opportunity, please see the Special Masters Appointment (pdf) opportunity on the Job Announcement page of the Court's web site.

Unfortunately, you need to be an attorney with at least 5 years experience, but what this means is that the Courts can appoint individuals to manage the process instead of the sheriff.