State housing meltdown leads to 2009’s big Gorilla
Friday, July 24, 2009
Portland Business Journal – by Wendy Culverwell Business Journal staff writer
Gorilla Capital Inc., which formally launched in 2005, closed $2.3 million in sales in June and expects to close $24 million in sales in 2009.
When it started in Lane County, it bought and sold 20 to 30 houses a year. Now, it processes nearly that many each month.
The company operates on a simple model: Buy and renovate at a discount and sell quickly at below-market prices. It has been profitable since its start.
Instead of buying from banks or distressed sellers, it buys all its homes at foreclosure auctions, which cuts costs and ensures that deals close within minutes instead of weeks.
The company tracks every foreclosed property in its markets, from the initial notice of default through auction and bank repossession.
Gorilla is the brainchild of John Helmick, a tech entrepreneur who made his fortune as co-founder of eCollege.com, and Ben Bazer, a Eugene entrepreneur who had a modest business fixing up homes and selling them at a rate of about five per year. With Helmick’s financial backing, the company grew almost immediately. Today, it has 17 employees operating in 15 Oregon counties and one county in Arizona. It is weighing expansions to Boise, California’s Palm Desert, Carson City, Nev., Daytona Beach, Fla., and West Texas.
Helmick said his team knows in minutes if a property suits its needs. It buys one home in every 150 it reviews and chiefly operates with properties priced under $200,000, a level it finds appeals to investors and entry-level buyers. It spends up to $20,000 to clean up a house, then markets the home to its own e-mail list. Homes are usually priced about 10 percent below market value.
Most sell within three to 10 days and come with a warranty against unforeseen trouble.
The name Gorilla reflects the company’s goal to become an 800-pound gorilla in an industry populated by small operators who turn over fewer than five houses per year. Helmick saw an opportunity to grow by standardizing his approach to acquiring houses and expanding to new markets.
“It’s as if there’s hamburger stands everywhere,” Helmick said. “Why doesn’t someone have a hamburger stand and call it ‘McDonald’s’ and put
them everywhere?”
Gorilla plans to expand into markets with stable economies dominated by government or health care, and also cities with easy flight connections to Eugene.
Gorilla profits by keeping a laser-like focus on foreclosed homes it buys at auction, where its competition can include banks that hold the loans and other bargain hunters. It never buys foreclosed property from banks or from distressed sellers because it takes too long.
The Gorilla model is thriving in Oregon’s tattered residential real estate economy, which recorded a 90 percent increase in foreclosure-related activity in May. Foreclosure actions were taken against 3,067 Oregon residences that month, or one for every 525 in the state.
With the inventory of unsold homes still more than twice as high as it was two years ago, Gorilla sacrifices profit for time.
Andrea and Rob Briley paid $185,000 for a 2,474-square-foot home in their hometown of Toledo, where Rob Briley is a millworker. It was the first house that met the couple’s price and size requirements in five years of house hunting.
Andrea Briley said she’s still amazed at how quickly they were able to close the deal.
“They were fast at getting the paperwork ready,” she said.
Though Helmick is taking advantage of a distressed market, he insists the model will work when the market recovers because foreclosures happen even in the best of times.
“It’s just a fact of life,” he said.
Profiting from foreclosure
In February, Portland land developer Gordon Root launched Blu Dot Realty, a Portland company that arranges for investors to purchase bank-owned homes at a discount. Blu Dot earns money by acting as agent for both the acquisition and subsequent sale.
Like Gorilla, Blu Dot pays close attention to the foreclosure market. It is tracking about 575 foreclosed homes with a collective assessment of $161 million in the Portland area. The banks have them listed for sale at $114 million.
“There’s $40-some-odd million of equity sitting on the table for someone to have,” said Root.
Blu Dot may even create a real estate investment fund to fuel further projects and answer demand for a piece of the foreclosure market action. “This is where the market is. That’s the cold, hard reality,” he said.
wculverwell@bizjournals.com | 503-219-3415
Date: April 21, 2011
Event Contact: Andy Downin (541)345-2230
info@eugenemarathon.com
Eugene OR –
At this year’s fifth annual Eugene Marathon on May 1 runners will, once again, be seeing the 13 foot high mile markers with Gorillas on them. For the fifth year in a row Eugene-based Gorilla Capital is providing the mile markers that chart competitors’ progress along the 26.2 mile course. In all there will be 28 mile markers (26 in the marathon and 2 separate for the half marathon) adorned with the familiar Gorilla icon scattered throughout the 5K, half-marathon, marathon and kids’ marathon routes.
“The 2010 feather flag mile markers were one of the coolest additions to last year’s race,” says Eugene Marathon representative Andy Downin. “They never could have happened without Gorilla Capital and their staff. They have been with us since day 1 and every day over the five year history of the Eugene Marathon.”
A former collegiate distance runner with a 2:23 marathon PR, Gorilla Capital CEO John Helmick knows a thing or two about being in it for the long haul. His company buys, remodels and sells homes, prides itself on being methodical, efficient and tireless in its pursuit of high-value properties that appeal to the general public.
Known as one of the prettiest and fastest marathons in the country, the Eugene Marathon course winds its way through six different parks, borders the scenic Willamette River, skirts the Owens Rose Garden and runs past Skinners Butte, to finish on the track at historic Hayward Field.
About Gorilla Capital
Gorilla Capital is one of the nation’s leading purchasers of distressed bank-owned real estate. Operating in multiple states, currently Oregon, Washington, Florida, Arizona and Idaho – the company is based in Eugene, Ore. Gorilla Capital provides competitively priced homes to the public by offering carefully selected homes that have been fully remodeled and priced to sell. All homes come with a third-party, one-year warranty.
Gorilla Capital tracks, reviews, and assesses over 120,000 distressed properties annually in order to find and acquire exceptional properties to offer homebuyers. Gorilla Capital provides options for buyers seeking affordable, quality, move-in-ready homes.
For more information, visit www.GorillaCapital.com, or phone (541) 344-7867.
For more information on the Eugene Marathon, go to www.eugenemarathon.com.
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