They'll buy your home - cheap

Sliding prices, ballooning payments, foreclosures ... and deals to be made by those who have cold cash for desperate homeowners.

Published May 27, 2007

The blue-tinted windows looked odd, not the facade of your typical Florida house.

As Shaun Carcary cracked the front door of the newly bought investment home in Town 'N Country, the stench knocked him back. Hundreds of cans of food stacked in the house by the former absentee owner had burst and oozed all over the floors.

The blue windows? The panes were teeming with a living, feasting colony of flies.

"It was so bad the rats had died," Carcary said.

Carcary tells the yarn from the safe distance of a couple years, behind the iron-barred windows of his real estate office in a raggedy section of Ybor City.

He runs the region's most successful HomeVestors franchise. You may have seen the company's "We Buy Ugly Houses" billboards and its caveman mascot named Ug.

The housing market has tanked. Banks threaten thousands of homes with repossession. Homes linger so long on the listings that some sellers dump properties for a song.

It's a great time to be Shaun Carcary. The 42-year-old South Africa native has built a business on paying 50 cents on the dollar for stressed houses. He gets plenty of takers.

"Yeah, you can call us bottom feeders," the burly former surfer and insurance agent says from his office converted from a defunct Spanish restaurant. "But it's savvy investment as far as I'm concerned."

It's 11 a.m. on Monday. Carcary has just returned from a fishing trip in the Florida Keys and has a tan to go with his goatee. While he was away leads have poured in from desperate home owners - 120 in the past week.

Right-hand-man Ryan Rickard pokes his head into Carcary's office.

"Hey listen: I've got five interesting leads that haven't been touched," Rickard says.

About 20 minutes later Carcary, Rickard and South African "cousin-in-law" Riaan Swart are rolling up Interstate 275 in their Ford Expedition, accompanied by a reporter. Polo shirts and shorts are their unofficial uniforms.

They've heading to the home of Sean and Mary Dean. They live in Wesley Chapel's Lexington Oaks golf course community. Their 2,550-square-foot stucco house isn't ugly. But their financial situation is.

Mary Dean complains they're two months behind on their $1,750 monthly payment. By early June the bank has threatened to get tough. Sean Dean was laid off from his metal working job. They have a For Sale sign out front, but no one's biting in the tepid market.

The HomeVestors team gives the house a once-over. Rickard conferences with the Deans at the dining table. He vouches for HomeVestors reputation, tells the couple he'll get them the best price he can, reminds them he's a no-hassle cash buyer.

After the 10-minute pitch, the team is back in the Expedition rocking down the highway to Tampa. Carcary's driving.

"What's the deal?" he asks.

"If it was up to her, she'd sign the contract right now," Rickard says.

"Uh huh," Carcary says.

"I'm telling you now, we can get this deal," Rickard says. "When I told them about the 80 other houses for sale in the neighborhood, they about spazzed."

Brutal logic

A model nearly identical to the Dean's sold on their street in November for $302, 000. Rickard does a quick calculation and comes up with his best price: $165,000.

The couple owes $140,000 on the house, so HomeVestors' offer would leave them about $15,000 to $20,000 after closing costs.

If the bank forecloses, they could lose every scrap of equity and ruin their credit for seven years.

"It just depends on how logical someone wants to be," Carcary says.

In 20 minutes, as the SUV turns south of Tampa's Hillsborough Avenue, golf courses are only a memory. The 50-year-old houses in the Eastern Heights neighborhood are showing their age. Sags. Cracks. Even the weeds look sick.

Carcary bought a concrete block house from an investor on Cayuga Street for $85,000. He's fixing it up and plans to resell it for $150,000.

The HomeVestors guys notice the For Sale sign out front is missing. Again.

"We've had a yard sign pulled out about 10 times," Carcary says. "So we just stopped putting them out."

Over the weekend, someone busted a back window and left seedy calling cards: Three empty Trojan condom wrappers, a splatter of orange soda, cigarette butts. Piles of tobacco, like little ant hills, litter the floors. The burglars had hollowed out cigars and stuffed them with marijuana. Something sinister stains the sink.

Carcary scratches his head and ponders the cleaning bill. "This place was spotless," he groans.

Cold, hard truth

Since the housing market turned south in 2006, Carcary has been in his element. A national study puts the number of problem properties in the Tampa Bay area - mostly "preforeclosures" - at about 18,000.

Typical HomeVestors sellers are housing speculators left holding the bag when the slump took hold, hard-up divorcees, foreclosure targets and owners of junkers who can't afford the repairs.

HomeVestors' head office in Dallas provides most leads via an 800-number plastered on billboards and mailers. Carcary dispatches a "digs and leads" man to scour neighborhoods for likely - and ugly - candidates.

Of the hundreds of leads a month, Carcary will make about 80 offers and get 10 to 15 takers. He usually pays about 50 cents on the dollar - 20 cents or 30 cents for sinkhole homes. He's mostly in the market for homes less than $150, 000. They're easier to resell or rent. Dallas provides a line of credit.

When it comes to negotiating with sellers, Carcary's method is to "get into their psyche" and "find their pain factor." If a house can't generate at least $15,000 in profit after rehab, he's not interested.

"People in a bad situation need to hear the hard, cold truth. They don't need the fluff and stuff," he says. "It's actually a business of helping people."

Carcary's staff of 14 includes his wife, Shona, who emigrated to Florida with him in 1997. In a back office, the couple has hung a big white plastic tally board listing properties in play.

His employees keep some finds for themselves. Among the buyers listed on the board is "007." It's Rickard's office nickname. Think James Bond: License to Kill.

Beside the wall board is a gold bell. They clang the ringer when they've made a killer deal.

The bell's been ringing a lot these days.

But not for the Dean family's house in Wesley Chapel.

A day later the Deans respond to HomeVestors' offer. Mary Dean was tempted to take the $165,000. Her husband won't part with the house for less than $240,000.

Carcary, preparing to fly to Dallas to address a HomeVestors conference, isn't rolling over.

"He's one of those guys, I'm telling you. Hard headed," Carcary says. "We'll just see when they get three payments behind. Maybe they'll come to their senses then."

James Thorner can be reached at thorner@sptimes.com or 813 226-3313.

Why it's a good time to be a bottom feeder

Sluggish sales and falling prices for Tampa Bay area homes provide a rich environment for investors, like Shaun Carcary, who runs an area HomeVestors franchise. Some numbers:

17,000: Estimated number of troubled properties approaching or engulfed in foreclosure.

2,488: Local home sales in April 2007

4,998: Local home sales in April 2006

36 percent: Share of area home loans that are adjustable rate.

22 percent: Share of home sales to investors in 2006.