Kimberly Carrillo/AFN Staff Photographer

Mike Smith finds the sweet spot when the American Dream of owning a home goes sour.

After the housing market virtually collapsed around 2007, the Ahwatukee Realtor made a living rehabbing foreclosures for Wells Fargo Bank and finding buyers.

Then, some wealthy Canadian investors used him to buy and fix some more so they could be sold to other Canadians.

Now, Smith is onto an emerging trend involving Baby Boomers who just want out.

He’s making deals with two different kinds of newly or about-to-be retired homeowners who want to get out of their house.

He gives them a choice: they can either forego the hassles of putting their home up for sale the conventional way and sell it to him outright or they can sell for a price they never expected if they let his company, Phoenix Native Properties, spiff it up for $10,000 or $20,000.

Either way, he makes money – and makes his clients happy.

But the key to his success goes beyond what quick-flip artists do by buying a run-down property and selling it without doing much to it at all.

These days, Smith said, “people want turnkey.”

“They want everything done,” he explained. “They don’t want to paint, or do this or do that. They want to buy it, move the furniture in and be done with it. And they’ll pay top dollar for that.”

And Smith is all too happy to accommodate them.

An Ahwatukee native who graduated from Mountain Pointe High School in 1996, Smith got into real estate at the urging of his Realtor mother, Mary Ann Smith. He was still an underclassman at Arizona State University.

“Mom said, ‘You should get your license. You’ve got a good personality,’” he recalled. “Six months into it, I was making deals. One day I was in math class and thinking, ‘Should I go close this deal and make some money or stay here?’”

He went to make money.

From 1998 until around 2007, Smith was a conventional real estate agent.

But as the housing market went south, he started getting unconventional.

“We started getting a ton of Canadians coming down here,” he said.

At first, he sold foreclosed homes as-is for banks that wanted to unload them to Canadians who were looking for a deal.

Then Wells Fargo hired him as an REO – short for “real estate owned,” the banking term for foreclosures it owns.

“They would give me a dumpy house and say, ‘Here’s the house, get it ready in a month,’” he said.

So, he’d line up contractors to fix it up for sale, then find a buyer.

Then, some Canadians with deep pockets wanted him to do the same thing.

“We would buy them at an auction for $50,000 or $60,000, put $10,000 into them and sell them. It was Canadians selling to Canadians. That was a lot of fun,” he said.

By 2010, he decided to start his own business, Phoenix Native Properties LLC. He connected with a friend who has extensive experience in contracting handymen.

“I told him, ‘I have the investors. I’ll buy them and sell them and you make them look pretty,’” he said.

Today, his business is a three-person operation: Dave Tussingoversees the rehab work, hiring independent contractors and making sure they do the job right and on budget; his semi-retired mother handles the paperwork; and he makes deals.

“I’d die if I had to sit in an office or at keyboards all day,” said Smith, who makes daily trips to auctions to find the diamonds in the rough.

But his job isn’t like the flippers portrayed on “Flip and Flop” and other cable TV shows where people buy houses without inspecting them first – oftentimes discovering more problems than they bargained for.

He looks for location and then he looks for problems – a talent he developed while working with bank foreclosures.

Working with Tussing, he figures out what needs to be done – and how much it will cost, allotting $10,000 for every week the rehab will require.

As with an investment, he’s had deals go bad because of unexpected problems – like the historic home he bought in the Encanto neighborhood.

“I got a smoking deal on the house for $160,000, then $240,000 later … We should have just torn it down and started over. The pool had a leak and we had to dig up the backyard to find the pipes. The sewer line was bad and we had to dig up the front.”

Then there was a home in Mountain Park Ranch that he bought for $720,000 and put $120,000 of repairs into it, hoping to sell it for just under $1 million. It’s scheduled to close for $850,000.

“So, my investors are losing $30,000, but what they love about what I do is that if it’s a break-even or a loss, we get no commission. We work for free. On the ones we make money, we all make money,” he explained.

Smith says that of about 200 deals he’s made, “only 20 or 25 broke even or lost money. The others worked out well. Our percentages are really good.”

While the foreclosure market has substantially diminished these days, Smith is finding a new business among Baby Boomers who no longer want their house.

Some are like an owner in Cabrillo Canyon who told him “I just want out,” Smith said. “He didn’t want to put up with open houses and people tramping through the home, so he asked me what I’d give him for it.”

Smith figures he can buy bit for $400,000, fix it up a bit and sell it for $500,000.

Then there are the older owners who don’t mind the hassles of a sale – especially after Smith explains how a $10,000 or $20,000 investment in things like new cabinets, landscaping and other upgrades might get them close to $100,000 more than they expected the home to be worth.

“I try to maximize what they can sell it for in the shortest amount of time,” he said, adding that he stages all his properties to make them even more appealing to a prospective buyer. “There’s such a difference in what we can sell them for it they’re staged.”

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