As phones ring in the background and a busy receptionist fields calls that seems to be ringing every phone in the office.
This Prince William County couple finds time out of their busy day to share their story with me. It's a story of struggle and uncertainty, a story of loss, but most importantly renewal.
Eugene and Gigi Smith began investing in real estate in the fall of 2003 right after their wedding. They; like so many other green investors; began exploring the many loan options available to them. Property values were on the rise and people were making money hand over fist. Everyone they knew was investing in real estate. The couple decided that they were prepared to get in as deep as it took, to secure their share of the fortune all around them.
No sooner than they began their research Eugene was called to war for Operation Iraqi Freedom. This put their plans on hold for a couple of years, but the couple returned to the area with a new found since of urgency. Immediately they purchased a house for themselves and their first born baby girl Madison. The story is all too familiar, even down to the most popular baby name of 2005. Sound familiar, a couple purchases more houses than they could afford, and in the end stares foreclosure right in the face.
What happened to all the equity? Where did the market go? So many other homeowners are in a state of shock asking themselves these very same questions. Eugene and Gigi were both licensed real estate agents, and Eugene was even a seasoned loan consultant. He was instrumental in opening Virginia’s only schools for residential real estate finance. "I knew it was coming it was just a matter of when.” Explains Eugene. He tells me stories of loan officers who made their money by charging Spanish-speaking clients eight points or sometimes more.
He also revealed to me that there are some good lenders left as well. Lenders like his mentor Greg Kuhndiger, who gave him his start in the mortgage business. "Greg made it a point to never let anyone at HomeFirst Mortgage get away with charging more that three points. He just felt it was gouging, and he was right." Also he favored Tuan Tran, owner of the Falls Church juggernaut Dream Mortgage. "I loved watching Tuan work for people.....there is no person I know in any business that holds themselves more responsible to their client than Tuan."
It would seem that they were learning the business from the right people, so why the breakdown? Well the Smith's seem to think they were blessed to be able to narrowly escape foreclosure multiple times. With a growing family this type of loss could have been crippling. With the birth of their third child, and Gigi's unexpected health problems much stability was needed. So they left the real estate industry altogether.
The problem is that the draw of the market is still there for them. It may appear to friends and family that they have barely gotten out alive, but for them the knowledge gained along the way was priceless. As a matter of fact it's making the idea of punching a clock unbearable to Mr. Smith.
Eugene is struggling to stay committed to his "day job", because his passion still lies in real estate. So together, Eugene a property manager and real estate marketer, and his wife Gigi a Realtor and asset manager have begun a property management and consulting firm. The firm is called The Presidents Club, LLC.
The Presidents Club, LLC is a residential real estate management and consultation firm, dedicated to helping Prince William and Stafford county homeowners avoid potential disasters. Also they work closely with investigative sources to find the “right” renters or buyers for residential properties. The couple is joined by yet another mentor, longtime investor James Best.
Mr. Best is known for his down-home appeal to people, and his uncanny ability to think outside of the box. James Best, (Also a Prince William County resident) is a licensed real estate agent and CEO of Genesis Investment Group LLC which acquires and manages real estate properties.
Mr. Best is assisted by his wife, Mrs. Judy Best. She too is a military veteran with over 25 years of leadership and management experience. Together they have amassed a wealth of knowledge and experience in financing, purchasing, marketing, selling, leasing, and managing real estate.
Genesis would like to bring an educational component into the housing aspect by teaming up with local agencies, Social Services and local businesses. Mr. Best explains, “Genesis will provide on-site training for all tenants. Tenants who are educated and trained are less likely to default with mortgage programs. Unlike many other realty companies that are solely concerned with profits our primary objective at Genesis is to turn today’s renters into tomorrow buyers.”
Together with Keller-Williams real estate brokerage; Gigi, James and Eugene are poised to protect, strengthen and rebuild families through education. When asked how they planned on getting people out of the mess they're in, they all answered, "One at a time."
So what’s their next move? Well the team has been meeting with a P.W. County Non-Profit housing association and a P.W. County Class (A) Licensed home builder. The goal in mind is to turn ordinary neighborhoods here into organized investment groups. These investment groups could then buy up the abandoned and foreclosed homes in their areas before they get vandalized or boarded up. “These homes could be renovated, and rented or sold for the betterment of everyone in our community. Why should our community wait for the banks to do it, it was those same banks that helped us into this mess in the first place.” Mrs. Smith explains.
This approach would bolster property values within certain zip codes that desperately need it. For many their homes were an investment for retirement, and with sales prices in a huge slump the equity is all gone.
“Our win-win approach teaches people how to invest in leveraged property through their retirement accounts. This allows for community investor to skip out on bank loans and credit inquiries. For instance, if your IRA has $40,000 in cash and you're interested in investing in a property selling for $200,000, the IRA can assume the $160,000 mortgage to complete the purchase.
All earnings can still be rolled into a “like property” (investment property) tax-deferred with an IRS 1031 exchange filing at the time of sale.
“These techniques are common in advanced real estate investment deals, now we are just going to teach our community, and give our neighbors the tools to rebuild our county.” Mr. Eugene Smith
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