Repo Contractors Thriving On Multiplying Foreclosures

Posted on June 30, 2008
Filed Under Repo Homes |

In Sacramento repo homes numbers continue to increase. Thriving on multiplying foreclosures are the Repo contractors. Repo refers to the repossessed houses – units that have taken over by the bank after completion of the foreclosure process. These are also known as REO or real estate owned.

John Kukis handles about 15 to 20 Repo houses in a month on behalf of banks. He works with the help of 10 employees and sees to the repair work. There are many like him and surrounding their renovating work a new market has come up that specializes in work like replacing burnt out kitchens and damaged floors. A survey is made of stinking carpets and peeled walls as also of overgrown backyards. Vandals have left their signature on broken windows and damaged cabinets.

For banks it is a sorry reminder of what their loans have been reduced to. Such vandalized houses are very common. Lenders are knee deep in trying to bring back shape and order to more than 20,000 units in Sacramento for the past year and a half. Frustrated owners leaving the premises in a rage have done much of the damage. This scenario is presenting new opportunities to a group dubbed the Repo-contractors.

Don Shannon is not worried about unemployment. The banks are keeping him on his toes. He is owner of a firm dealing with repossessed houses. There are not exact figures about how much the banks are spending to bring back order to this chaos. The guess is that it cannot be short of some millions. Kukis claims that contractors like him are “hooked to the system buried with work’. They are painting, laying new carpets, fixing the plumbing and electricity lines and patching up the holes. On an average a bank puts in about $9,000 for a unit. Cleaning up bills hover around $200 to $350.

Apart from contractors, dealers in appliances are also feeding off this market meltdown. Loan specialists are running to and fro tailoring government supported financing for new loans and repairs. Unlicensed contractors too have pitched in although competition is stiff and regulations tough. Kukis has his own philosophy – making hay while the sun shines. He got his experience when he jumped into the fray in 1990 when a similar situation had risen. At that time he came to know the banks and agents. Today that relationship is paying dividends.