When David Farrell decided to conduct bus tours of foreclosed homes on Long Island, he figured that he had
hit upon a unique way to tap the public’s interest in benefiting from others’
misfortunes and to showcase his properties more efficiently.
Farrell, broker-owner of RE/MAX Village Properties in Mineola on Long Island and a former tour guide at the Museum of Natural History, was right about everything but the singularity of his brainstorming: a buddy told him that foreclosure
tours had become popular in California, New Mexico and Florida.
A 47-seat motorcoach dubbed the “Foreclosure Express” toured a dozen homes in Palm Beach, for instance, and in the spring, the Duluth, Minn., branch of mortgage giant Countrywide Financial held a “Parade of Foreclosures” tour.
Still, Farrell’s jaunt is a hit on Long Island, and he has also shuttled buyers and the curious to ogle foreclosed assets in Manhattan, which has been relatively immune from the snowballing crisis. He will have another one this month.
Farrell is the exclusive broker for a block of 12 foreclosed properties in Manhattan now owned by ABC Equities. His first tour visited seven apartments; one of them,
located in the 80s on the West Side, is in contract. He also sold a foreclosed 1/52 time share in the Manhattan Club, across the street from Carnegie Hall.
He expects his Manhattan tour roster to expand over the next six months to around 70 properties as foreclosures move through the legal process.
While Farrell shows many more properties on his Long Island tours (100 in Nassau County, 80 in Suffolk County), he has high standards.
“We’re not going to neighborhoods where half the homes on a block are in foreclosure,” he said. “We’re looking for homes that are in move-in condition and cost around $100,000 to $200,000 below comparable market value. For example, I had one in Garden City in an area of $600,000 houses selling for $439,000, and it was the only [foreclosed property] in the neighborhood.”
Farrell, who also auctions foreclosed homes on behalf of Nassau County, said he’s often asked to explain ways to capitalize on the foreclosure market. He always cautions against dabbling in the market because of its complications, especially when auctions are involved. But he admits the foreclosure market is alluring.
“There are people who work 70 hours a week doing this; it’s not a part-time thing,” he said. “You’re either all in or all out.”
Farrell has plans to expand the franchise to Hoboken, Stamford, Baltimore, Washington, D.C., and even Greensboro, N.C. And he plans to ditch the motorcoaches in favor of a convoy of Yukons
or Suburbans to shuttle customers more efficiently.
Though the tours ease his life as a broker and can net him a lot more in commissions, he still plans to charge for seats.
“That way, you weed out the tire-kickers,” he said. “The people on our tours have an average credit score of 770.”