The LMC Group continues to make headway in finding solutions for the real estate market. While not an immediate fix, finding solutions that work has to be done. While developers and banks are at each other for performance of each of their duties, The LMC Group has brought solutions to possibly wrestle away the blame and move into a new era of doing business in the construction and development industry. Part of what we do was recently featured in the business section of the local paper. See excerpt here: LMC Group works with key players to “refire” subdivisions. Or see below a reprint.
Published: Friday, October 22, 2010 at 5:33 p.m.
Last Modified: Friday, October 22, 2010 at 5:33 p.m.
The LMC Group of Wilmington is using a unique technique to “refire” stalled subdivisions, bringing together developer, lender and builders in a way the company hopes will also refire the area’s construction industry.
The lots are the collateral for banks’ loans, and when the value of their collateral fell, the lenders told developers to ante up cash to make up the difference. Many developers now have run out of cash to satisfy the banks, so they face foreclosure.
The solution from LMC: Act as a facilitator between the developer and the lender to arrive at a current price for the lots that allows houses to be built for today’s market – in the low to mid-$200,000s, said Roy R. Holdford III, owner, president and CEO of LMC, and Senior Vice President Charles Poindexter.
“Like many people, we found ourselves being squeezed by the financial meltdown, the subsequent credit freeze and the housing market collapse,” Chastiny Sizemore, development coordinator for Dogwood Lakes LLC, said in a statement.
“We were able to partner with The LMC Group for a workable solution. They have put together a winning formula by being able to successfully negotiate the correct fair market lot pricing that can sustain builder activity.”
Though the lender takes a loss, the reasoning is that the bank will get a higher payback this way than if it foreclosed and had to dump the property.
This satisfies the note and the developer retains title, Holdford and Poindexter said.
LMC acts as the developer’s broker for the lots, which are bought by builders because they can get financing for finished lots as opposed to raw land.
The builders start building, hiring tradespeople and subcontractors who might themselves be struggling to stay afloat.
LMC gets fees for its services, and the developer gets out of the project.
Holdford and Poindexter, however, foresee the process as building a fire under the local market that will spread, creating more construction, jobs, profit for all involved and tax revenue for counties and municipalities.
Think of it, Holdford said, as an economic stimulus.
Holdford and Poindexter are at work at two Surf City subdivisions – Dogwood Lakes, on U.S. 17 just south of Route 210, and the higher-end Saltwater Landing, on Route 210 east of U.S. 17.
Builders H&H of Fayetteville and Savvy of Raleigh have bought lots and are either building or planning to do so. The demand is sparked, in part, because of their proximity to Camp Lejeune.
Holdford and Poindexter said LMC has other deals in the works, in Pender and Brunswick counties.
In Dogwood Lakes, Wilmington’s Stevens Fine Homes has bought 60 lots and is building homes. He’s sold 16 so far.
“We try to save the developer, the bank, the community, the real estate agent on the street,” said Poindexter. “What we want people to know is we are creating revenue so everybody can stomach this recession.”
Among the subcontractors and suppliers employed at Dogwood Lakes are Markraft Cabinets, Provil Framing, Enhanced Heating and Air and Risley Padula Co. (carpentry), Holdford said.
The men are not new to real estate or finance.
Holdford worked for Bobby Harrelson and his son-in-law, Bert Exum, who developed Leland’s Magnolia Greens and Waterford, among other communities. “When Waterford was finished for the most part, Bert formed Land Marketing Co. (LMC) and placed me in the center of it to help other developers market their product until he had Compass Pointe ready for the marketplace. When Compass Pointe was ready for the marketplace, I chose to stick with Land Marketing.”
LMC’s efforts have stirred interest in Wilmington real estate circles, even though Holdford and Poindexter have until now pushed their business through word of mouth.
“I think it’s a win-win situation for the lender as well as the developer/builder,” said Grover Cauthen, founder of Eastern Mortgage in Wilmington. “It provides an opportunity for the bank to get rid of distressed assets and builders to pick up some lots – and there is financing.”
Hansen Matthews, partner in the Wilmington commercial real estate firm Maus Warwick Matthews was positive about LMC’s efforts.
“Anything that people are doing, that they are doing on these loans, that is thawing the market and moving the log jam of inventory” is welcomed, he said.
Matthews cautioned, however, that “no one thing is going to do it. It will be a lot of small movements that make it happen.”
Some firms are helping developers and builders restructure their debt, Poindexter said, but “that doesn’t help get (the developer) out of the project. We are providing the solutions. A full-blown exit strategy.”
Wayne Faulkner: 343-2329