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Largo company builds profit machine from foreclosures

By Alan Snel, Times Correspondent
In print: Sunday, September 7, 2008

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LARGO — A spike in foreclosures has led to heartache for those who lose their homes, but it has translated into soaring revenue gains for one Largo company that was recently singled out among the fastest-growing revenue-generating companies in the country.

Inc. magazine's list of America's fastest-growing private companies ranked ForeclosuresDaily.com at No. 35 with a whopping 3,838.5 percent growth rate from 2004 to 2007. Its annual revenue: $366,000 in 2004, $2.9-million in 2005, $5.3-million in 2006 and a $14.1-million in 2007. It was the only bay area company to crack the top 100.

ForeclosuresDaily.com makes its money from selling one-stop-shopping training programs to clients that show them how to buy foreclosure properties and also by selling Web-based subscriptions that provide foreclosure information on a per-county basis in Florida. Its 38 employees at its headquarters at 12600 S Belcher Road, along with 30 contracted workers research foreclosure lawsuits in courthouses in the metro Tampa Bay, South Florida, Orlando and Jacksonville markets.

For $7,000, ForeclosuresDaily.com will train investors on buying properties from owners facing foreclosures while also negotiating with the banks that hold the loan. In a turn-key arrangement that is reminiscent of a franchisee buying business rights, investors with ForeclosuresDaily.com also receive software to help them market their business activities, a call center that handles phone calls for them and an intensive three-day, 10-hours-per-day crash course.

The company also makes money from selling foreclosure data to customers. The tab: $479 for a three-month subscription, $699 for six months and $1,299 for a year.

There's a ripe business environment for ForeclosuresDaily.com as foreclosures have increased from 1 percent to 2.5 percent among the 125-million residential properties in the United States, said Mike Kane, a South Tampa resident who is president and chief executive officer of ForeclosuresDaily.com.

"We're doing a service," Kane said. "Banks are not in the real estate business. They have to get these assets off their balance sheets."

There were nearly 4,000 foreclosure filings in the Tampa Bay market in March 2008 — about double from March 2007. There are 33,958 active foreclosures in Hillsborough County, 25,130 in Pinellas County and 15,030 in Pasco County, according to ForeclosuresDaily.com.

Kane said he hopes to grow revenue by partnering with other foreclosure companies to gain access to foreclosure filings in markets such as Detroit and Cleveland.