South Florida entrepreneurs take advantage of foreclosures
As the foreclosure crisis in South Florida continues, some area entrepreneurs are taking advantage of the collapsed housing markets to turn a profit.
The foreclosure crisis in South Florida began, as it did across the country, with the bottoming out of complicated subprime loans and real estate speculation. Now, the recession's high unemployment rates and falling housing prices continue to drive home foreclosures. In the second quarter, nearly one in every four Florida home loans is delinquent or in foreclosure, the highest rate of any state.
Some Florida businesses are capitalizing on the sorry state of the housing market.
Real estate entrepreneurs who found themselves in a position to weather the recession are able to buy up distressed mortgages at a deep discount from desperate homeowners. Some buyers are able to offer reduced mortgage payments to current homeowners, with the goal of refinancing the mortgage in the future, after the housing market improves. Other buyers line up investors looking to get a great deal on discounted mortgages.
Some of these entrepreneurs view their investments as acts of kindness, as the reduced mortgage payments allow homeowners to remain residences of foreclosed properties. According to the Miami Herald, Jeff Waters of Giving Tree Development, considers himself a "white angel" for offering a real solution to homeowners who might not otherwise be able to remain in their homes.
Other businesspeople are less sentimental about the situation, like Peter Zalewski of Condo Vultures, a real estate brokerage and consulting firm based in Florida that specializes in connecting individual and group investors with foreclosure mortgages. Zalewski, who was interviewed by Michael Moore for the documentary film "Capitalism," unapologetically told CNN Money that "this is pure capitalism. I am not trying to return anything to society. I am trying to make money."
Other nimble businesses are also thriving in the wake of the Florida foreclosure crisis. Law firms that once managed real estate transactions now handle real estate litigation as thousands of foreclosures move through the systems. Building contractors have shifted from new building to completing projects that were halted due to foreclosures. Interior designers are offering package design deals for foreclosed homes, to enable homeowners to more easily sell or rent out the properties.
Some real estate and financial advisors are also experiencing a higher volume of students in their classes. These students are hoping to sharpen their financial skills, or to learn more about the complex tax procedures and legal requirements of the foreclosure process. Lawyers may also be busy, as many people decide that filing bankruptcy may help them stay in their homes.
In an economic downturn, there are entrepreneurs who find ways to work against the current and turn a profit. Florida, where the foreclosure crisis runs deeper than anywhere in the nation, has its fair share.
