- Wendy Culverwell
- Business Journal staff writer- Portland Business Journal
- Jan 15, 2013, 10:20am
Eugene businessman John Helmick began buying distressed homes with a partner in 2002.
In 2005, he formed Gorilla Capital to renovate damaged homes, usually foreclosures, and sell them at a profit.
The company is among Oregon’s fastest-growing private firms. It reported $65 million in 2012 revenue, 62.5 percent more than 2011’s $40 million.
The Portland Business Journal visited with Helmick about the state of the housing market this week.
PBJ: What is the most important factor in the housing market?
Helmick: The employment rate. There is a direct correlation between foreclosures and unemployment but there’s a 12-month lag. If you want to lower foreclosure rates in 2014, you have to lower the unemployment rate in 2013.
PBJ: You’re the most optimistic you’ve been in five years. Why is that?
Helmick: Unemployment rates are going down, fewer homes are falling into foreclosure and we have an easier time selling. There is a lot more confidence out there in the market. The market is healing itself.
PBJ: Your business depends on buying distressed properties, usually foreclosures. Isn’t it bad for you if there are fewer foreclosures?
Helmick: No. We started buying foreclosures in a strong economy. We’re used to buying distressed, damaged homes, repairing them and selling them. We’ve always been able to find houses to buy. Our model works in good markets and bad.
PBJ: What’s the difference between a distressed home during a hot market and a distressed home in a recession?
Helmick: During the recession, homes fell into foreclosure when people lost their jobs. The houses were in good condition, often immaculately maintained. When times were good, the homes that fell into foreclosure were the worst of the worst, the ones you couldn’t sell in a traditional way. The weeds are waist high, appliances are rotting in the yard, the roofs are caving in.
PBJ: What’s the best part about fixing up damaged homes and reselling them.
Helmick: You have neighbors coming over and saying, “Thank you so much. Now, would you do that one over there?” There is a joy for me in that transformation.
PBJ: Any other unusual observations?
Helmick: Anecdotally, the houses most likely to be foreclosed on in 2007 and 2008 were blue or light gray. We would drive down the street and it would always be the blue or light gray house.
PBJ: What color do you paint houses?
Helmick: Butter. It’s a shade of off white. We try to create homes that are fairly neutral, just like the home builders do.
PBJ: What does 2013 hold beyond Oregon?
Helmick: We are expanding in Idaho, Utah and California.
Wendy Culverwell covers real estate, retail and hospitality.
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