Mike's Blog

 Good Morning Andy...I saw your farewell post is continuing to gather comments. So, rather than talk about Real Estate, lets talk about ......birds, rain, and that old storm named Fay

Ahhhhhhhhhhhh 

I do love my mornings. Today was weird. There was a sound coming from outside that I faintly remembered.

Could that be birds?? Its been weeks since I heard birds. A thought crosses my  mind. Where do the birds go??

For over a week we have been extremely windy and raining. Before that we were very windy and raining. It gets old, all this raining.

I try to imagine what Noah would have felt like. Maybe he would have said…Hey Mike!! If you’re so worried, where is your boat?

Good point Noah, go feed a giraffe or something.

For days I have seen the television showing streets flooding, lakes overflowing, and non stop coverage of this rainmaker named Fay. Who names a storm Fay…Sounds more like a second cousin from your mothers side, the one who can’t get a good date. But Fay is certainly going to be remembered as the drought breaker, the rainmaker, the guest who came and really just would not leave.

I decide to take my coffee outside to the screened in porch. I hang the potted plants we had taken down during the days of wind and rain. Still waterlogged and soaked, they begin to leak almost in unison onto the floor. Oh well, deal with that later.

But this morning, at 6:48, the sky has a certain yellow pinkish haze that seems strangely surreal. The trees are looking cleaner, the yards are certainly greener, and the birds are singing after all. I still don’t know where they go, but I am glad they are back. My large oak trees full of finches are chirping more loudly now as the sun actually crests our horizon. I am momentarily blinded by the glare, I take a minute to look into my coffee cup to now see blazing spots swirling in the steam that rises from my cup.

The air is remarkably clean and fresh, and I think this will be a great time to open all the windows in the house, to let in that freshness. On second thought, maybe I will ask my wife what she thinks, when she gets up. Sometimes my good ideas aren’t always accepted, I decide to wait for her input.  

One of my cats comes walking, tip toeing across the indoor-outdoor carpet. He take a step or two and then shakes his paws, first the fronts, and then the backs. At  this pace it will take him a while to get over here to the relative safety of the chairs I have already wiped down this morning. He too is sniffing the air, seemingly pleased with the results. However, the opinion of someone who licks their own butt may be a bit suspect.

The finches are flittering between the trees, the activity is quite a complicated game of musical branches. I try to count the birds, but they are in a state of constant motion, there is no way to count them. I settle between 40 and 70, but realize I could be off by a few either way. The cat has made it to the chair, and is infatuated with the movement of the birds as well. He is a sissy cat, and has only been able to hunt lizards and bugs that may make it into the house or garage. That is the extent of his world. I let him out one time and my wife got so upset I thought it was going to be the end of mine. Lesson Learned. Check….

Well the laptop battery has had enough, and I think I will go inside to see what the morning TV has to say about the day. Me, I already know its going to be OK, the sun is shining, and life will get back to normal soon.

Oh by the way Andy, this is for you my friend. I see evidence of you lurking in the hallways of Active Rain from time to time, when you are ready, throw us a new post to let us know you are OK.

C-Ya

Mike Norvell Sr.

Developers Capital Realty, LLC

1029 West Magnolia Street

Leesburg, Fl  34748

Office (352) 365-6464

Fax       (352) 365-6556

Cell       (352) 408-7111

                                                                                                    assetsclearinghouse.com

Mikenorvell@earthlink.net

Mikendcr@gmail.com                                                    

The last few weeks have been a bit busy.

We have been meeting with a lot of people.

We are searching for Professionals in Fl to refer business to and feel a face to face meeting is a great way to get a better feel for how we might be able to work with someone. Makes sense to me.

Whats all the meetings for, you ask?? No problem...Developers Capital Realty MAY have a large REO package to split up here in FL very soon. There is no way our small company can handle hundreds of homes. So, using the power of Active Rain, and another site called Topix, we are moving to establish relationships in strategic areas in Central to South Fl.

Will we get this large REO package?? I don't know yet..But there are many deals coming, we will get our share because its all I am doing with my time. The worst thing I could do is wait until I had a huge pile of homes across the state and then try to find partners in a big rush.

We need Realtors who have great local contacts in their area. People who know contractors, Property Managers, painters, cleaners, lawn services, ect. People who have bank and mortgage connections, and have a strong overall sense of professional structure and integrity.

So imagine my amazement with some of the response to my emails with a general description of what we are looking to set up. One young guy has not waited for us, he has over 50 places he wants to add to the collection. Way to go, that's what we need. Another is setting up appointments with smaller bankers and private lenders in his area that have commercial inventory for sale at a great discount. Super Job!

So, in one blind meeting, I was to meet with a person that had been refferred. Not knowing what to expect, I arrive at a nice resturant a little early to try to pick the guy out as he arrived. I took a seat with a nice vantage point, and while waiting, noticed a nicely dressed middle aged gentleman who ordered juice with his breakfast.

He received the juice, and with a quick a practiced move, pulled a silver flask from his coat pocket, and quickly poured himself a double. I suddenly had a fear that this might be my appointment, as he too was positioned to watch the entrance...Thankfully, my wait was over very quickly as a gentleman walked in and looked straight at me and waved. As he approached, he said "hello Mike, you look just like your picture" 

He had looked me up on Active Rain and came anyway!!  It was a nice meeting, but I could not help but to watch the guy with the breakfast double shot a few tables away. He did have a companion a few minutes later, and I couldn't help but notice every time he took a big drink from the "Juice".

I would hate to think that that man would be representing me, or my clients with that kind of a problem...I wonder how addicted someone must be to alcohol to have to carry it with them and have it for breakfast...Really, that's sad.

But, anyway, we look forward to coming to SW Fl next week. I hope we can continue to find a great group of professionals to assist/partner with us to move these properties.. I will keep us posted.

Today I had the pleasure of trying to break a bulk REO package deal down into an investment structure rather than a complicated series of hundreds of houses. The guests' name was David, a professional marketing consultant who was trying to understand the process of Buying bulk REO packages and then carving them down into smaller pieces.

The process of dealing in a volume of properties that are scattered across the country can be a bit overwhelming. Developers Capital Realty, LLC, has a plan to bridge this process, and will work with selected Realtors, Property managers, contractors, Title Agents, Mortgage Brokers and Rehabbers.

It would be more daunting execpt for a a little social networking Professional Networking group called Active Rain.

After our lunch today in South Fl, at the trendy Nickys On the Beach,  I took the time to start working on creating a different view towards the process.

Yes, this is a very complex puzzle. However, nothing is impossible if it can be broken down into basic tasks, and  executed in an order that achieves the expected results.  The biggest problem I have seen in the REO Bulk business was that NO ONE was taking it down to the process of getting to the street level. Buying, cleaning, renting , selling, leasing, managing 3000 houses..... How can this be done?? 

On my way back from South Fl today, I wrote this reply on my blackberry...

Here is my start to the puzzle...

David

  I will send a few links over later that will save some searching as you spend your time in due dilligence.

The key in my opinion is in possessing an exit strategy for our partners (investors).

Our bottoms up approach to this puzzle created a view of an unrealized revenue stream that is not being structured in any other scenario I have seen. Our goal is to capture a very sizeable price of this huge market before its gone.

If you were to imagine our product were widgets of any sort that you feel familiar with, then it may make you feel more comfortable with this deal. Try this....

Lets imagine a truckload of pencils. Imagine there has been a steady drop in the value of pencils and the pencils are piling up in the stores. So someone sends a truck around and picks up thousands of pencils and they are now just sitting.

Everyone in the news talks every day about the price of pencils falling and the impact its having on the whole economy. Its common knowledge that the market for pencils will recover at some point but right now the big pencil pencil clearing house is willing to sell them at less than half price if you can buy a truckload at at time

Now no one needs that many pencils, but a group was formed to find a number of buyers that could purchase in bulk and sell off in smaller lots of boxes at a time and still retain sufficient margins to sell later when the market recovered at less than retail even in this market

Those who could afford to wait could rent the pencils for a while to create cash flow and then sell at full price later. The ones who could buy half a truckload or more could afford to make a nice profit by selling off for a ten percent quick return and still have quite enough profit left for down the line smaller lot sales.

The group who set up this whole process ( Developers Capital Realty) is able to make fees and commissions at every level and share in the margin spreads at each level.

Of course, as the lots of pencils get smaller the prices are closer to the retail price and therefore the turn time will be longer. However, It's forecast that pencils can be sold for 85 percent of current value even in this slower market. But in any event, there are commissions and fees plus over 30 percent of margin spreads to be split up from truckload to box pricing.

David, it only seems more complicated because our REO situation involves houses and properties. But our job is to establish the players and set up the needed established professionals to facilitate the process from soup to nuts, from large bulk packages down to small groups of homes, down to the end user finally moving in and calling a property a home.....

Our plan will show that we can assemble the packages, purchase them in bulk at reduced rates, and then sell them off thu carving it down into smaller packages until it reaches street level.

Its really a matter of logistics to handle the flow, set up property management, and arrange for end user financing or rent to own scenarios.

Our goal is to present this as a total investment package rather than as an episode of Flip This House.

I will follow thru with appropriate material to assist your ramped up learning curve.  And maybe in my next example I will use something better than pencils, but after days on the road setting up the vendors that will be involved, its the best I can do today.

David, It was great meeting with you today, I hope this will help with explaining this concept to your contacts in the financial markets...I don't want them to envision that they have to get involved beyond expecting a decent return on thier investments.

Respectfully,

Mike Norvell Sr 

Developers Capital Realty, LLC