Phoenix area foreclosure info awaits investors

The surplus of foreclosure properties in Maricopa County has resulted in an increase in business for Kyle Brown, president of Sharp Equity, an auction firm that specializes in trustee sales.

Sharp's online-based system, which allows investors to search foreclosures and have access to real-time data, helps clients of Brown and business partner David Arnce navigate the constantly changing market. Video footage of properties is also part of the software.

And, in this fast-paced world where dollar figures can change in a matter of minutes, this system has proved handy and profitable.

Since opening in 2007, Sharp's Ahwatukee Foothills-based business has increased 1,000 percent.

"For your typical investor, it's difficult to track down data when there could be a hundred different companies acquiring properties," said Brown, who has several employees who are solely focused on information gathering. "If you're not working with a company like ours, then you're really limiting the possibilities for opportunities."

Ahwatukee Foothills real-estate agent Nate Randleman has negotiated purchases on 80 properties for his clients through Sharp. His investors have benefited from the ease and timeliness of getting up-to-date information on foreclosures. Often, banks make last-minute changes to the opening bid on a home, and Sharp's system allows him and his clients to act quickly.

"That's everything in this business, when you have to make decisions in an hour. Sometimes, you have to make a decision in five minutes. That's when you can find some of your best buys," Randleman said.

With financial backgrounds in hard-money lending, Brown and Arnce several years ago paid attention to the types of loans being done and the profile of borrowers that were getting financed. In 2006-07, they noticed the number of defaults and started an opportunistic fund to bid on and purchase failed properties.

Soon, they were accumulating so much data that they decided to shift their focus to investors and start their own firm.

"We've bought and sold hundreds of properties, but we had the ability to buy so much more than that. So, for us, it was a simple shift. There is so much demand for this," Brown said.

Brown's clients seek properties they can use as rentals, fix and flip, or use for commercial purposes. Sharp provides investors with assistance on budgets, improving the condition of properties and any in-depth analysis that is needed.

Current economic conditions have resulted in an increase in rental demand, Brown said. Typical three-bedroom, two-bathroom homes in newer developments are coveted because investors can purchase them for less than the cost to build and make a profit by renting them out.

It has also made it a little more difficult to sell property. A few years ago, Brown said, Sharp's average time that a house was on the market from initial listing to when it was sold was 60 days. Now, it's 100 days.

The large supply of foreclosure properties and the pool of potential investors looking for big returns have also yielded a wave of firms looking to cash in, some of which are not as credible or capable of providing accurate and complete data.

Brown said he and Arnce were determined not to be among them.

"When working with real-time data, we found it was too easy for people to manipulate the data," he said. "We made a commitment to be ethical and provide transparency for everyone out there. It's what every business should be."

by Georgann Yara Special for The Republic Dec. 9, 2010 12:00 AM





Phoenix area foreclosure info awaits investors