John Rymer thrives on failures.
The president of Aberdeen Realty and Rymer Strategies, a Tampa real estate advisory and research company, specializes in relaunching sales programs in lender-owned housing developments and condominium projects after the original builders fail.
"I tell the builders who is buying," Rymer said.
In the past two decades, he has helped create sales and marketing strategies that produced more than $5 billion in sales for developers and builders. The fallout from the foreclosure crisis has kept the Tampa-based adviser busy recently with the sales of high-rise condo towers in Fort Myers and Cape Coral.
A Dutch lender hired him last year to sell the remaining condos at Tarpon Point in Cape Coral, part of a $340 million foreclosure case. After the lender seized the complex, 92 out of 210 condos remained unsold. The lender also set limits for Rymer: spend little on marketing and hire no large sales staff.
Rymer slashed prices from $700,000 to $400,000 on many units. Only about half of the units remain.
"There was a belief that if you build it bigger, you can get more money," Rymer said. "That isn't the case anymore."
After poring over consumer research from focus groups and exit interviews with buyers, Rymer tells builders who is buying properties and what draws them to the projects.
Even with distressed properties saturating the area, Rymer said, new construction offers warranties and energy-efficient homes — perks not found in foreclosures and short sales. Builders are giving away a plethora of upgrades in new construction and have an edge with first-time buyers.
"They're not selling as an investment," he said about builders. "They're selling the dream of home ownership. That plays very well to them."
Armed with an economics degree from Florida State University and an MBA from the University of Miami, Rymer headed the national sales and marketing for Morrison Homes and the marketing efforts for Jack Nicklaus Development Corp.
Rymer discussed his work with the Times.
What are the challenges to selling properties when the owners/lenders don't want to spend money on marketing?
In today's market, everyone is looking at ways to minimize overhead. Some owners and lenders confuse spending money with spending money wisely, though. We see successful marketing outreach as a three-legged stool — reaching out to new customers through heavy use of the Internet, while getting referrals from existing homeowners and having great relationships with Realtors. It can be done cost-effectively, but not for free. In selling new homes, a marketing budget allows you to differentiate yourself from used homes and distressed properties. There are smart ways to succeed with a smaller marketing budget.
The first question to ask when selecting a marketing firm is this: Tell me about a recent success story. What did it cost and what was the return on the investment? It will give you a lot of insight into how they think and work.
With the worst of the housing crisis behind us, why start a realty company that specializes in selling distressed properties?
At Rymer Strategies, we already had a nationally respected research arm and a sales training program that's been used successfully by more than 1,000 sales professionals. By adding sales staffing, we were able to offer the one-stop-shop that lenders and venture funds were looking for.
When we started our realty division, Aberdeen Realty LLC, our immediate opportunity was with owners of foreclosed properties. But going forward, we expect this model to be popular with traditional developers and builders who are looking to ramp up sales and marketing quickly as the market improves.
What's the biggest lesson you warn builders about from the housing bust?
You have to learn to create real value for the buyer. The developers and builders who are still in business understand the need for research to determine the target customers and what they are looking for. They also take the time and effort to understand what is under supplied and what's missing from the market.
How do you appeal to the buyer and how do you differentiate yourself? Having a laser focus on answering this question is a key to success.
What are the key factors for developers to successfully reposition failed housing developments in outlying areas?
They have to be able to create value that matches today's demand. The challenge is that there are a lot of communities in outlying communities that are overamenitized, meaning their recreational facilities and other features don't match what the new pricing of homes can support.
In this case, it's important for a developer to explain to the current homeowners that there won't be a fancy Phase 2. This certainly will be a disappointment to the existing homeowners, but the explanation is that those promises were made in a different time, and wouldn't they rather have new neighbors rather than vacant lots?
With a shortage of houses at some price points, what has to happen before more builders construct speculative homes?
There needs to be a longer trend of growth in new home activity. We've had three good months, but we need a record of six to nine months before banks will increase their lending to builders.
What does the near future look like for the housing industry?
With new home inventories at such low levels and affordability at an all-time high, the signs are there for continued improvement. You have seen the big publicly traded home-building companies buy major land positions, so the smart money is out there.
The winners in this new housing market will be those who are most attuned to the needs of today's buyer. Generation X and Y are much more likely to want a walkable community that's a 24/7 neighborhood. That, tied to rising gas prices, speaks to excellent prospects for quality in-town locations, in particular.
Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.