Boom & Bust, Part 1
They peeked in the closets. They sniffed the kitchen and breezed through the Spanish-style three-bedroom on San Lorenzo Avenue in Coral Gables, which was going for $653,900. Minutes later, they retreated to the cool air of the black limousine minibus waiting at the curb.
The nine potential buyers were trailed and outnumbered by a gaggle of hungry real estate folks.
As the group settled into cushy seats and sipped bottled water, Luis Barrenechea, a dapper loan consultant in his late thirties sporting an Italian suit and a Bluetooth, asked, "What was the first impression when you saw the house?"
Silence followed. This was the fifth home they'd seen that Saturday in April. It was after noon. Some were hungry. The breakfast spread of Krispy Kremes, bagels, and champagne was wearing off.
"To me, it was cha-ching!" he continued enthusiastically. The foreclosed home last sold for $1.1 million in 2005. "That's easy money," said Barrenechea.
The unlikely day-trippers were part of the inaugural Miami Homes Tour, a new tactic for hawking foreclosed property. Its organizers are part of a burgeoning brood of businesspeople cleaning up after Miami's burst real estate bubble.
It's certainly no secret — foreclosures are climbing across the nation and particularly in South Florida. Lenders took possession of 1,143 properties in March, a 317 percent increase from last year and almost double the February total, according to a recent analysis by the South Florida firm Condo Vultures.
Those who haven't lost their homes have lost money. The median home sale price in Miami-Dade has dropped 12 percent and condos have plummeted 11 percent in the past year.
But that doesn't mean the wily among us can't make a few bucks. It's boom time for lawn guys, foreclosure specialists, and maids, says Kia Grant, who runs a Miami Beach property maintenance firm. "Everybody's getting in on it and trying to make a dollar."
Meet a few of the smart ones:
The Lawn Guy. Marshall Kaplan has run Green Thumb Lawn Service in Miami Gardens since 1985. Though his business never quite recovered after 1992's Hurricane Andrew, within the past month or so, slews of banks have hired his crew to tend to about 200 foreclosed homes.
Since mid-February, business has shot up 50 percent. "It's gotten us so busy that we're pulling our hair out. I hope it doubles or triples," the 44-year-old Kaplan says with a dry laugh. "I'm not starving."
The Maid Man. Six months ago, Victor Lazarus started Miami Maids with friend Caghan Bardakci. The Miami Beach-based company soon began working with eight banks to check on, clean, and change the locks of foreclosed properties. Bank-owned digs now bring in about $15,000 a month. One day last week, the company was assigned 11 new homes. "The last six months have been crazy," Lazarus says. The 34-year-old Miami native and hip-hop producer has had awkward confrontations with debtors. "I tell them: 'Look, I work for the bank. We're just here to check on it and then we're out of here.'"
The Listings Lady. In 2004, Kia Grant began Goldfish Holdings and Property Preservations to ready out-of-towners' homes for hurricanes. The company shifted gears after bank clients sought help with foreclosures.
Last December, the realtor in her forties began cleaning out and listing foreclosures for banks. A month later, the company had 20 listings.
The work can be emotionally draining. "It's sad sometimes," she says. "A lot of times it's elderly people who were just behind on the payments. There's just so much scam that went on. "
The Condo Vulture. Peter Zalewski, founder of Bal Harbour-based Condo Vultures consulting and real estate firms, jokes that you can detect his staffers by the dark circles under their eyes. He says company agents sell about four properties a week. Zalewski, a former journalist with a Chicago accent, began targeting foreclosure sales in July 2006 with three employees. The staff now approaches 30. Agents glean a three percent commission of the properties, which range in price from $400,000 to $700,000.
He estimates 80 percent of the clients hail from outside South Florida. Many are vacationing foreigners. "It's almost turning into a tourist type of activity," he says. "They're coming to Miami to see all the condos."
The Foreclosure Wünderkind. A year ago, family and friends thought Alejandro Diaz-Balan was crazy when he founded the real estate firm South Florida Foreclosure Group. The bilingual twentysomething had been working as a financial analyst and anticipated the plummet. He launched a website and e-mailed criticism to newspapers including the Wall Street Journal. They began quoting him, and his site drew more traffic. Now the firm has six employees who focus on peddling distressed real estate.
He doesn't believe in flashy techniques such as the foreclosure bus. "What a joke," snorts Diaz-Balan.
The Short-Sale Woman. Marcia Wilson, a native of the Dominican Republic, says the latest fad in Magic City real estate circles is helping people sell their homes for less than they owe the bank. Her experience began while working as a paralegal for a New York City real estate attorney in 2001. "I hated it back then, but now it's put me in a good position," she says.
She started Short Sale Authority six months ago but says she's been concentrating on it for two years. "Now it's in fashion," she says. "Anybody and everybody claims they do short sales, and most people don't even know what it is."
In the next week or so, Wilson is moving her Hallandale Beach office to bigger digs in Davie to make room for three new employees. She says she receives up to eight new short sales applications a day. The company charges $100 to the debtor and $2,500 to $7,500 to the lenders.
Those are just a few who feed off the foreclosure boom. Craigslist Miami is flooded with ads for foreclosure hotlines and offers to work as short sales consultants with pitches such as, "business is raging in your area." Ads also try to snag investors: "Buy when there is blood on the streets."
The Saturday bus tour wasn't nearly so gory. At nearly 1 p.m., Luis Barrenechea stood at the front of the bus after a look at a three-bedroom with a $699,000 tag on Alhambra Circle. Records mark its last sale in May 2007 at $1.4 million.
"Again, Luis here," he said. "With that home, you're looking at money in the bank." Then he headed back to his seat and told of his plan to strike it rich. "It just takes one deal like that," he said before his eyes wandered out the window to the sparkling, waterfront beacons of speculation on Brickell.
It seems fitting that in the Magic City, even as the market is tanking, a former electrician and nightclub doorman muses about his first million. There's a fortune in foolishness and failure.
Next week, desperate sellers get creative.
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