Asset Management & Recovery: September 2007

If you work in this business long enough you will see just about everything.  Unfortunately, today one of our agents saw the business end of an automatic pistol.  It occurred at about 11am on a fairly busy street in a neighborhood that is usually pretty safe.

Montry was checking on a property and trimming some branches that had fallen down.  While doing this, he was approached by 2 males who took his watch and ring, forced him into his car, drove to his house 20 miles away, took all the cash in the house and a new pair of sneakers and then had him drive them back to the neighborhood where they abducted him.  The brand new $300 chainsaw must have been too much to carry.  We still have that.

He took it pretty well, all things considered.  His attitude was pretty much that it was bound to happen eventually.  He didn't even want to call the police.  On that note, he was on to something.  They gave him a bunch of grief about coming back to the office and then calling.  Apparently the better plan would have been to hang around the neighborhood he was robbed in and wait for the police there !!!  As it was, it took them an hour to get to the office after we called.  GREAT !!!

I am not posting this to scare anyone or anything, but this is an example of how anything can happen to anyone, anytime. 

As a reminder, it is a good idea to let people know where you are going and when you plan to be back.  If you are not comfortable going somewhere or doing something, please don't do it. 

Montry is a former Army MP.  Most of our folks have military backgrounds and are comfortable doing things in places where others would be a little afraid.  This isn't the first bad situation any of us have been in, but it is the worst.  If it can happen to us, it can happen to anyone.

More and more auctioneers are joining AR and significantly more lenders and individuals are looking at the auction method of marketing as a way to dispose of property.  Our volume of offerings in Columbus Ohio is up significantly over last year and the calls come in just about every day.

There are a lot of strategies for optimally positioning the property for a positive sale and there are quite a few hurdles.

One thing that real estate auctioneers have no control over is a stale listing.  I suppose auctioneers can turn down transactions on property that has been on the market too long.  Some will and some won't. 

Stale listings are tougher to sell at auction just like they are tougher to sell through general brokerage.  The sooner you pull the trigger, the better.  The best results come when the property is never listed before auction.

Another thing that will impact results is the advertising.  One of the terms for most real estate auctions is that the seller pays for the ads.  This is usually paid up front based on a budget and profile created by the auctioneer. 

The profile the auctioneer designs and proposes to you takes into consideration hitting all ad venues such as print, mail, email and web and also specifically targets the buyer segments most likely to buy the property.  Cutting the budget or modifying the profile is usually detrimental to the sale.

In today's market more promotion needs to be done than ever before and positioning of the asset is extremely important. 

If you want information about offering your property at auction, the terms and conditions of typical sales or would like experienced representation as a buyer at an upcoming auction, please call us at 877-5-GRYPHON.

Ohio is currently listed as #5 in the foreclosure rankings with 1 in every 376 households in some stage of foreclosure.  If you follow RealtyTrac, that is a 138% increase over August of 2006. WOW !!!!

Our research shows us that there are currently 4,079 properties available in Franklin County, Ohio that are in distressed situations such as being part of a bankruptcy filing or foreclosure action.  Generally speaking, distressed sellers are willing to consider selling at lower prices to qualified and serious buyers.  There are many intricacies involved in buying distressed deals.  It is important to know the ins and outs of what the bank, trustee and court expect in order to get these deals pushed through. 

Gryphon specializes in these types of transactions.

Call us for information on distressed deals in areas you want to live.

Rich Kruse - rfk@gryphonusa.com  614-774-4118

As I posted before, I recently spent 5 days in Dallas at the 5 Star Default Conference learning and meeting with lenders and agents from around the US.  There was a full day of 30 minute sessions where agents could find out directly from the lender/servicer what they wanted and expected from an agent.  Some were vague and some were very specific.

Here are the TOP 8 we heard over and over:

•1.      Be Techno savvy.  Everything is web based.  Laptops with Go Anywhere Internet and PDA's a plus.  Must have a digital camera.

•2.      Teams are preferred.  If you have a team, you will likely get more deal flow.  If you are out in the field, have someone that can answer admin questions when the asset manager calls the office

•3.      Be able to advance funds.  One lender said up to $3500 per project.  One said up to $10,000 per project. WOW !!!

•4.      Have a contractor network and be able to GC a minor rehab (about 50% of lenders said this)

•5.      Have property tracking software

•6.      Have accounting software (huge deal for some lenders)

•7.      Have good insurance

•8.      A request for a 24 hour turnaround means 24 hours even if that puts you to work on Sunday of a holiday weekend.

One of the servicers we talked to said that he actually comes out and audits the agents that do volume for him.  He wants to see their operation in action and review their systems.

I went into the conference hoping to find a vendor that had REO specific tracking software as some of the programs I reviewed had too much stuff that didn't apply or needed to be changed to work for us.  I found one and will be trying it out.  I will post the results of my test drive once it is completed.  Give a call or shoot an email if you want info on it.  Right now I am not comfortable openly recommending the program.

Melissa I just got back to good old Columbus, OH from the DS News 5 Star Conference in Dallas.  The conference was 3 days of networking and smaller 1-2 hour educational sessions along with another 2 days of full day educational sessions at an added cost.  Melissa and I went to a marketing course and one called REO from A-Z the first 2 days and then spent the rest of the time in various break out sessions.

There must have been at least 1000 people there, probably, more and to put it in plain English, the word on the street is that the market is not good.  Surprise, surprise, surprise !!!!!!

We talked to agents from around the US, vendors specializing in software packages to track REO properties (REO Specific defaults), direct lenders, loan servicers and buyers.  Generally speaking, the comments were all the same:

            High inventory is getting higher

            No lenders available to fund

            Shortage (believe it or not) of qualified agents

            Market is spiraling downward

What Melissa and I learned and had reconfirmed by the experts at this conference was wonderful.  The great news was that we are on the right track, but got some great ideas about doing things faster and better.  I need to get my head around all of the data and put it to words, but I will over the next few days. 

Shoot a call or email if you have a specific question NOW and I will try to answer it. 

Rich

Every month we gear up for Eviction Day.  It is the anti-holiday that comes about every 30 days or so.  It is around the 6^th or 7^th of every month depending on the weekend schedule.

Just as the sun will rise, eviction day will be active.

Tomorrow I think we have over 40 notices to go out.  All are hand delivered and that costs us money.

A typical month will include anywhere between 25-40 notices handed out.  It takes at least one day for a full time employee and sometimes two days.  Typically, the driving mileage is about 120.  Then we need to spend all the time dealing with the excuses about why payment can't be made on time and requests for extensions.  If we extend, that means more than 1 trip down to eviction hearings for the month for both me and our attorney.  This costs money too.

Our clients ask us why we charge for eviction management.  Our tenants ask us why we charge them late fees.

40 notices at 2 pages each x $.10 per copy = $8.00

6 gallons of gas at $3.00 = $18.00

16 employee hours at $14.50 = $232.00

10 employee hours managing excuses = $140.00

15% SSI ++ general employee overhead costs = $27.00

Parking at the courthouse twice = $10.00

Attorneys fees for eviction figuring 15% of notices are evicted = $1512

My time at court x 2 = $500

$2250 +/- per month in costs just to deal with evictions ???

Tenants - You are going to be paying those late fees if you want to stay.  You are going to be paying on time or you are going to need to leave.

Some of these costs we get back, but not all.  First of all, we can't get back the time we spend.  We can't make money while dealing with these silly issues, so there is lost opportunity cost.

Please Mr. Tenant, don't ask me to be reasonable.  What do you think my bank is going to tell me when I am late?

I can't begin to tell you how much I hate eviction day !!

Gryphon Realty Advisors, Central Ohio's Leader in Asset Management and Recovery, is pleased to announce that they have been retained to list and manage 42 single family homes in the greater Columbus Ohio marketplace from an Arizona bankruptcy case. 

The portfolio can be purchased in its entirety, in smaller blocks or individually.  Prices start as low as $116,000 to $124,000 for an individual asset and the Trustee will consider a range of $5,769,000 to $6,219,000 for the entire portfolio with the higher amount being a full price offer.

Vacant properties are on lockbox and can be viewed any time.  Curb offers on occupied properties are preferred so not to disturb tenants in advance of coming to agreement.

All offers are subject to Bankruptcy Court approval and should be presented with evidence of financial ability.

Click here to view a list of all properties.

Please call Richard Kruse at 614-774-4118 with any questions.  Viewings may be scheduled starting Saturday, September 8, 2007.