Rehabbing Homes in Top Towns Boosts Overall Neighborhood Values
As foreclosures continue to increase in Michigan and home prices maintain a decline from a year ago, Woodward Asset Capital has decided to change its business strategy.
Instead of buying any portfolios that are in poor shape and upgrading these properties to improve their quality so people can live in them faster, Ronald Jasgur, Rodney Carey and Gerald Kazakov have invented a program to streamline the REO and short sale industries.
As it became increasingly difficult to buy distressed homes in bulk, the founders of the Southfield, Mich.-based company have decided to buy the worst homes in the best neighborhoods and get these properties back on track first.
“The most dated, the ugliest, the houses where kitchens and plumbing have been ripped out and where ceilings are collapsed, those are the houses we buy and rebuild to set a neighborhood standard,” Jasgur said. “We are boosting local market values.”
By improving homes in the top communities, the company that focuses on real estate acquisition and sales to rebuild the marketplace is also stimulating an increase in neighboring property values.
“Our track record speaks for itself, and although there can be challenges to valuation and appraisals, our business model works well,” Jasgur said. “We are consistently able to sell each property within our expected timeframe and price range.”
Wolfgang Von Mueller, president of the Whispering Meadows Association in White Lake, Mich., said WAC’s rebuilding efforts saved his community.
“These guys took a property that was fast becoming a nuisance and turned it into a beautiful home with residents living in it,” Von Mueller said. “The average sale a few years ago was over $400,000 and then we dropped to the low $200,000s. Thanks to WAC’s property, we are back to the $300,000s.”
Another property that was bought, remodeled, and then sold by the company was in West Bloomfield, Mich. Keith Kalish lives near this rehabilitated property and he said the estate was unlivable before it was renovated, which affected the entire community.
“It had mold, water all over the place, rust, it was terrible,” Kalish said. “Everything was corroded, a ceiling had been ripped down and everything was written over with markers. Woodward Asset Capital knew what they were doing by acquiring the vacant property and improving it to help the overall market value of all the other homes on the street.”
Bruce Eck, a building inspection supervisor for West Bloomfield Township, Mich., said the company has followed all state and local regulations when conducting their business.
“These guys over-improve and make houses marketable, keeping neighborhoods intact,” Eck said. “They strive to build houses that are to code and meet all local ordinances, which is a win for the new owner and a win for the township.”
The three partners are looking for other investors to contribute to this type of business model, which is a cash-only purchase of homes that don’t qualify for financing, in order to continue upgrading other community neighborhoods.
“In addition to portfolios of properties acquired directly from banks, we make offers on individual properties every day that fit our model.” Jasgur said. “More investors mean we can purchase, rehab and sell more houses and get more people living in quality homes. The best opportunities are the [worst] houses in the best neighborhoods, the ones that an owner-occupant typically would not consider today.”