Tampa 'Short Sale Kid' sees quick money in foreclosures

Nathan Jurewicz buys foreclosed homes from banks at a discount and then sells them.

ATOYIA DEANS | Times

Nathan Jurewicz buys foreclosed homes from banks at a discount and then sells them.

The video begins in the entryway of a 2,200-square-foot Channelside condo in Tampa and closes in on Nathan "The Short Sale Kid" Jurewicz. His T-shirt reads "Unemployable," his hair cut punky short.

Jurewicz is obliviously blasting away on a video game. A drum kit and electric guitar sit in the background of the bachelor pad.

"Oh? Hi. Welcome to shortsaleriches.com" Jurewicz says in mock surprise as he turns away from the screen carnage. "As you can see, I've had a very busy day at the office."

Jurewicz's YouTube sales pitch purports to show real estate professionals how to make rump roast from road kill in the foreclosure-wrecked housing market. As he tells acolytes: "You never have to do any work ever again."

The system involves buying short sale homes — those plucked from financially distressed owners for less than the mortgage owed the bank — and flipping them at a hefty markup to other investors.

Realtors and banking experts are arching skeptical eyebrows at his method. If a bank's already taking a bath on a short sale by forgiving $100,000 in mortgage debt, why is a middleman making a clean grab in the exchange?

The question transcends bank shareholders. With the federal government guaranteeing hundreds of billions of dollars in bad mortgage debt, taxpayers should care, too. They're the ones covering bank losses.

A churchgoing 28-year-old who was homeschooled through high school, Jurewicz delights in outrageous hair styles: orange with tiger stripes, a yellow and black bumblebee swirl, a black phoenix against an albino white background. Today his spiky top is kelly green. His eyebrows are striped the same color.

Jurewicz has devised a special purchase option contract that lets him simultaneously bid on a short sale house with the bank while marketing it to other buyers. A team of Realtors and negotiators does the dirty work of juggling buyers and banks for him.

He's outsourced the workload so much, he claims not to know the addresses of many of the homes he's buying and selling.

But is the bank aware that Jurewicz will buy a house for, say, $150,000 and immediately sell it for $175,000?

"I can put the kibosh on that one," he says, his green eyebrows rising in defense. "We disclose everything to the lender. I'm not misrepresenting myself to the bank."

Jurewicz is a Realtor with Keller Williams in Tampa. McLaughlin, his business partner, owns the franchise. But not everyone in the realty profession has climbed aboard. They consider it an ethical gray area.

St. Petersburg agent Steve Capen sells short sale homes the old-fashioned, stick-a-sign-in-the-yard way, and has rebuffed offers to use the Jurewicz method. He believes Realtors working for Jurewicz are conflicted: They're supposed to get the best price for the short seller — the homeowner behind on his mortgage. But if they do, then the price could be too high for Jurewicz to make a profit. In those cases, he won't buy the home, which means the Realtor loses out on a second commission if Jurewicz had flipped the house for profit.

"I just don't think it's representing the seller in the best possible way. But if it's legal he can knock himself out,'' Capen said.

Other Jurewicz techniques also rankle. When a bank weighs a short sale offer, it usually sends out an agent to do a rough appraisal of the property, known as a broker price opinion, or BPO.

Shortsaleriches.com suggests investors send out their own BPO agent to point out flaws with the home and suppress the appraised value. In sales seminars, Jurewicz proposes sending attractive women since most of the bank's agents are men.

He defends the practice. If banks are too confident of their price, there's less profit for investors in the end. Jurewicz generally clears $10,000 to $15,000 per flip after expenses.

"Most BPO agents are paid $65 and are sent here from other counties. They don't know our market," he said. "It pays for us to meet them out there and show them things they might not have seen."

The proliferation of short sale entrepreneurs reminds Florida economist and banking expert Ken Thomas of roofing contractors who spring up after every hurricane, some of them shady.

"We'll be doing a story two years from now about all these people ripped off in short sales,'' Thomas said. "As a home buyer you're always better off dealing with the bank. Why do we even need these third party guys?''

But the Short Sale Kid is unabashed. Since incorporating with partner Chris McLaughlin in June, Jurewicz has made his living flipping short sale homes and selling the system on CD for $497 a pop.

He even hired a public relations pro to spell out his case. Rosemary Goudreau says Jurewicz speeds up the foreclosure process and helps banks clean up their books. Banks accept short sale offers about 30 percent of the time. Jurewicz's success rate is 60 percent.

"Shortsaleriches is a business responding to a need in the market. It's getting houses moving again," Goudreau said. "This is a business that makes no apologies for being a business."

As long as foreclosures pour onto the market by the thousands, Jurewicz will remain a fixture on YouTube: promising easy money, juggling balls, doing TV spoofs, getting his hair dyed.

"Every time I see something on the news — the sky is falling … oh, no, this crisis — me and my partner Chris, we're like, 'Yes!' " Jurewicz says toward the end of one promo video.

He pumps his fist in the air. A cash register sound effect rings out, "Ka-ching!"

How to profit from the foreclosure market, according to The Short Sale Kid:

1. Investor hires Realtor to seek out homeowners being sued for foreclosure, preferably in lower income neighborhoods.

2. Homeowner signs exclusive contract that allows investor to buy the property at a discounted short sale price and simultaneously market the home for resale at a profit.

3. Investor's negotiator haggles with bank to accept the low price. Meanwhile Realtor seeks out buyer to purchase home at a markup

4. After typically 3 or 4 months, bank agrees to sell the house for less than the overdue mortgage and covers Realtor commissions. Investor buys the home with a line of credit and immediately flips it for a gain of about $15,000 to $20,000.

Tampa 'Short Sale Kid' sees quick money in foreclosures 05/02/09 [Last modified: Saturday, May 2, 2009 4:31am]

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